Is it time to put an electric car in your garage? It's a question many people have asked WhichCar journalists, with a steadily-increasing frequency as more and more models start flowing into showrooms and the public's understanding of electric vehicles increases. So, what's the answer?
Well, it's probably "no" for now ... with caveats.
“Range anxiety” might be the dominant buzzword when it comes to explaining why the take-up of electric vehicles has been so glacial in Australia, but a quick glance at new car price guides provides a more convincing reason as to why battery-electrics are still so rare on our roads: they are expensive.
By October 2020 1225 electric vehicles in total were sold in this country. While that represents a 16 percent increase over the same period in 2019, it's still small bikkies in a total annual new car market of a million-plus.
That official sales data doesn’t include sales by Tesla (the notoriously secretive company refuses to release country-specific sales figures), which will arguably see a significant bump in EV deliveries this year thanks to the arrival of the Tesla Model 3, but even with Tesla's volume, the market share of electric cars is still minuscule.
And none of this is especially surprising, given there’s still no such thing as an EV that could be considered “affordable”.
But EVs have the critical advantage of low running costs. Maintenance is simple and sourcing power from a household outlet isn’t just more convenient if you adopt a charge-overnight regimen – it’s substantially cheaper on a per-kilometre basis than petrol and diesel.
Does that compensate for the high showroom sticker price? What about depreciation? Does the second-hand value of an electric car plummet any faster than a comparable combustion-engined vehicle? All good questions.
For now, the cheapest battery-electric you can buy is the Hyundai Ioniq Electric Elite, priced at $48,970. Rather conveniently, Hyundai also offers a similarly-sized, similarly-equipped combustion-powered equivalent in the i30 Elite, that’s priced at $28,320.
Both are five-door hatchbacks, both are intended for mainly urban duty, and both wear the same badge on their snout. The similarities end there, but which one makes more sense in the long term, petrol, or electric? We’ve crunched the numbers in an attempt to settle the argument.
Purchase price and depreciation
Right from the get-go, the combustion-engined car grabs an early advantage with its $27,790 price tag. That’s a $17,200 saving before you’ve even rolled into your driveway.
Why the big price discrepancy? All of those fancy rare earth metals in the Ioniq’s electric motor and the lithium, nickel and cobalt in its battery pack are quite expensive, and a purely electric vehicle needs lots of them.
However, purchase price is just part of the story – the biggest cost associated with owning a car from new is often depreciation.
In the case of the Ioniq Electric Elite and the i30 Elite, their three-year industry residual value comes in at an identical 54 percent. However, with the electric car costing more to begin with, the depreciation hit is far more substantial: $20,695 versus the i30’s $12,783.
READ MORE: How bad is electric car depreciation?
It’s worth noting, however, that retained value projections sometimes have to be taken with a grain of salt.
The Ioniq hasn’t been in the Australian market for long so Glass' Data has had to apply a complex algorithm to estimate its retained value performance over a longer period.
It takes into account the brand’s historical performance, the early performance of the model after it hits the market, and how other vehicles of a similar type have fared. It’s also a guideline figure for car dealerships assess reasonable values on traded-in vehicles, so if you’re selling a car on the private market you may fare better.
With a claimed average fuel consumption of 7.4L/100km from its 2.0-litre petrol engine, the i30 Elite is far from a fuel guzzler. At today’s national average fuel price of $1.421 per litre, it’ll cost you about $10.50 to keep it going for 100km.
And that’s fairly reasonable. However, it pales in comparison to just how little it costs to run the electric Ioniq.
Let’s say you live in the state with the priciest energy – South Australia.
The average cost of a kilowatt-hour is 37.62 cents, which, given the Ioniq’s average consumption of 12.31kWh/100km, means it’ll cost just $4.63 to travel 100km.
However, cross the border to Victoria, where the average energy cost is 23.27 cents per kWh, and that cost plummets to $2.86 per 100km.
Got access to dirt-cheap off-peak energy rates? The cost will come down even further.
With the average Australian driving 15,530km per year according to the Australian Bureau of Statistics, that sees the annual fuel cost of the i30 come to $1633.75, or $4901.26 over three years.
Drive the electric Ioniq the same distance on SA energy and those numbers are $719.04 and $2157.12 respectively, but do so on Victorian energy and it’s a scant $444.16 annually, and $1332.47 for three years.
READ MORE: The cheapest ways to charge your EV
But putting petrol or electrons in your car isn’t the only thing you need to do to stay on the road – there’s maintenance to factor in as well.
Over three years of ownership, the Ioniq Electric will need to be serviced three times. Under Hyundai’s fixed price servicing scheme, each visit to the service department will cost $160. That actually makes the Ioniq Electric the cheapest variant to maintain in its range – both the Ioniq Hybrid and Ioniq Plug-in Hybrid cost $265 per visit.
The i30 also requires annual scheduled services, with each one priced at $259. At a three-yearly cost of $777, maintaining the i30 costs significantly more than the Ioniq’s $480 bill.
Let’s not forget insurance. After fuel and finance, insuring your car is a big impost – and one that’s ignored at your peril. Assuming all other things are equal, such as driver age, gender, garaged address, etc. it costs $911 per year to insure an i30 Elite petrol automatic under a fully-comprehensive policy.
As for the Ioniq Electric Elite… that’ll require $1324 per year to insure. That’s not because of anything related to its all-electric nature, but rather something that’s simply a byproduct of its higher purchase cost. Try and insure a Hyundai Sonata of the same price, and the premium will be roughly the same.
We’ve focused largely on the financial rationale behind whether an electric car makes sense, but there are other ancillary issues that will dictate whether an EV is the right choice for you. These things will largely depend on your personal situation – for some they won’t be a problem, but for others they may be a deal-breaker.
- Where to charge if you live in an apartment? For those without the luxury of a garage, carport or even a driveway in which to park their car and run a charge cable to it, juicing up the battery every night would be a great challenge indeed.
- Charging time. The Ioniq takes 17.5 hours to fully charge on ordinary household voltage. Fast chargers can drop that to just under an hour while more home-friendly wallboxes can make it a seven-to-eight hour charge, but if you get in the habit of letting the battery run close to flat on a regular basis, you may find yourself stranded by long recharge times.
- Additional impact on infrastructure. This is more something for energy companies and state governments to concern themselves with, but it has a flow-on effect to consumers via the additional cost of infrastructure. If electric vehicles are adopted in significant numbers, things like transmission lines, transformers and power generation will all need to be upgraded to deal with the surge in electricity demand.
- EVs may be the target of new taxes. To pay for these upgrades – and to compensate for lost tax income through reduced consumption of fuels – future governments may apply taxes to electric cars based on their battery size. There are no current proposals to introduce such taxes, but as EV adoption increases it seems like a likely scenario.
- Resources issue. The raw materials needed to make a high-voltage vehicle battery aren’t just costly, they come with an environmental, social and geo-political impact depending on where they come from. Just as with drilling for oil, extracting precious and rare earth metals out of the ground isn’t the simplest – or cleanest – process.
For the first three years of ownership, the Hyundai i30 Elite auto will cost at least $19,372 in depreciation, insurance, fuel and servicing.
By comparison, the similarly-sized Hyundai Ioniq Electric Elite will cost $24,656 according to our most conservative energy cost model, or $23,831 if you have access to cheap power.
For some, that circa-$5K gap might be easy enough to stomach if it means they can put an electric car in their driveway. What’s more, the longer you hang onto it the more economic sense the electric car makes. Thanks to dirt-cheap running costs, eventually its total cost to the consumer becomes less than an equivalent combustion-powered car – and that crossover point could occur as soon as five or six years after purchase.
The silver lining is this – as the cost of EVs come down (and they are), the economics of ownership tips further in their favour. Are we at the tipping point where EVs are more financially feasible than combustion-powered cars yet? No, but as the numbers show it’s not as far away as you’d think.