Electric Cars vs. Petrol Cars: Costs and Savings

Thanks to government subsidies, rising petrol prices and consumers looking to go green, electric cars are making headline news. So when it comes to buying an electric car, what are the costs involved, and how much money do you save in comparison to buying a petrol car, if any?

Canstar compares electric cars vs. petrol cars, to see which is right for you.

In this article we cover:

What are your options?
Purchasing costs
Running costs
Maintenance and servicing costs
How much can you save and is an electric car worth it?

Electric cars vs. petrol cars: what are your options?

For the most part, there’s now an electric car to match almost every petrol option. Whether hatchback or sedan, crossover or large SUV, there’s an electric car option. However, the choice of different makes and models is still limited.

Here in NZ, the only type of popular car type not covered by an electric model is the ute. However, the first electric ute is due to hit our shores later this year, in the form of the LDV EV T60.

Electric cars vs. petrol cars: purchasing costs

How do electric cars compare to petrol ones when it comes to sticker price? In short, they cost more. Sometimes, a lot more.

According to Motor Trade Association Advocacy and Strategy Manager Greig Epps, the average cost of a new electric car is about $68,000. By comparison, Epps says consumers “can get a really good new petrol car for under $30,000”.

Currently, the cheapest new EV in the country is the MG ZS EV, which comes in at around $49,000 (or around $40,000 after the Clean Car Discount). Not only is that well beyond a significant number of excellent petrol vehicles, but it’s the only EV in the country below $60,000. So it’s not just the cheapest, but the cheapest by a lot.

To provide further insight into these costs, we’ve run the numbers on the top three selling EVs and petrol vehicles in New Zealand for the full-year 2021.

Top three selling EVs

Top three selling cars

As you can see, the top three electric cars are around twice the price of the top three selling petrol cars. Which is a significant cost. Even when you factor in the Clean Car Discount.

What’s the Clean Car Discount?

The Clean Car Discount is a government initiative that provides discounts for low emission vehicles. Calculated on a sliding scale, the lower the emissions, the bigger discount. As electric cars are zer0-emission, they receive the full rebate, $8625 for new EVs.

In addition to the rebates, high-emission vehicles can be hit with a feebate, which is an extra tax bill up to $5175.

You can read more information about the Clean Car Discount here.

What if you can’t afford $40,000 for a new car?

While a high-end EV costs no more than a high-end petrol car, the issue lies in that there isn’t currently a cheap EV market. So if you can’t afford $40,000 for the MG ZS EV, then you can’t afford a new EV.

But there are some other alternatives, such as shopping second-hand. Though be mindful that older EVs don’t have the range or features of modern electric cars. And, on top of that, as an EV’s battery ages, its range diminishes.

But, saying that, a second-hand EV from 2018 will be a lot better than one from 2012. So if you can get your hands on a youthful second-hand EV, you could get yourself a great car.

Alternatively, hybrids and plug-in hybrids may be a cheaper option, and one that can still reduce your fuel costs, even if not providing the full benefits of an EV. Again, you may need to look second-hand, but as these vehicles still have petrol motors, any aging of their batteries will be less detrimental to their functionality.

Electric cars vs. petrol cars: running costs

This is where electric cars make a name for themselves. Particularly as it looks like petrol costs are only set to rise. Just think, in five years’ time, we might all be reminiscing on the good old days of $3 a litre

Below we’ve crunched the numbers for running costs on last year’s most popular petrol and electric cars.

*Based on national average electricity price

As you can see, the cost difference can be significant. Based on a fairly average travel distance of 14,000 km per year, the above works out to total yearly costs of $683.20 for EVs and $3066 for petrol vehicles. Over the course of the year, this is a difference of $2382.80!

And that’s not all. If you choose a power plan with off-peak power rates, your kWh cost could be significantly lower. For my own address, one provider quoted me off-peak rates half the price of peak rates.

Or, even better, charge your EV during your free power hours (such as those offered by Electric Kiwi and Contact Energy) and you could wind up paying nearly nothing at all. That’s like having a free petrol pump in your own driveway!

Another way to score yourself free kilowatts could be to install solar at your house. That way your car will be running on nothing but sunshine!

→Related article: EV Power Plans: The Best Power Plans for Electric Vehicles

Compare electricity providers with Canstar Blue

If you have an EV, or are thinking about getting one, the right power plan is paramount. But finding the right provider can be a real challenge.

If you are looking to change electricity providers, or are unsure if you are getting the best deal, Canstar Blue can help. We rate NZ power companies for customer satisfaction and value for money, see the table below for some of the results, or you can click on the button below for the full results of our survey.

Canstar Blue’s latest review of NZ power companies compares them on customer satisfaction. The table below is an abridged version of our full results, available here.

Compare electricity providers for free with Canstar Blue!

Electric Cars vs. Petrol Cars: Maintenance & Servicing Costs

The average EV only has around 20 moving parts, compared to over 2000 in an internal combustion engine vehicle. So you should expect less maintenance is required to keep your car on the road.

As a result, EVs should cost less in service and maintenance than petrol cars.

However, there is still some level of servicing needed, and the actual cost of that maintenance isn’t always clear, as many mechanics don’t advertise EV service pricing. Furthermore, not all mechanics even offer EV servicing.

In the short term, that means you may not see the full benefits of cheaper servicing costs. For example, Pit Stop does advertise EV servicing starting from $189. But that’s only $10 cheaper than its extensive service.

As time goes on and more mechanics become familiar with EV servicing, the time taken on service and maintenance of EVs should decrease, while the level of competition and number of EV servicing options should increase. That should bring down your maintenance costs.

→Related article: New Zealand’s Best Car Servicing Provider Revealed

What about the battery?

Battery replacements have long been the boogieman for EVs. And while it’s true that, currently, a battery replacement could set you back well over $10,000, there’s no need to panic just yet.

For starters, it’s rare for EV batteries to just die. Most replacements occur due to the range decreasing over time. Furthermore, EV batteries come with a significant warranty (often eight years), which covers not only the rare instances of batteries malfunctioning but covers your battery for a certain percentage of its capacity.

So if range becomes an issue, it could be covered.

However, a 2019 study by Geotab found EVs lose, on average, just 2.3% capacity annually. Assuming this, after eight years, your battery would still be operating at 81.6%. On a Tesla Model 3 with a staggering 491km range, that’s still a range of about 400km after eight years.

Not only that, but if in 10 years you do need to replace your battery, you can expect the cost to be significantly lower than at present, due to the EV industry’s constant growth and evolution.

How much can you save with an electric car?

We all want to get the best deal possible when buying a new car, whether that’s a discount on the price tag or cheaper servicing if you take it back to the dealership. But if you opt for an electric car over a new petrol model, how much are you actually saving?

Put simply, that depends on how long it takes you to recoup the upfront costs.

If you budget for a $30,000 petrol car, but opt for a $40,000 electric car instead, then you’re instantly $10,000 in the red. It could take a few years before you make that back in cheaper running costs, and then a few years more before you see actual savings. Especially if you took out a personal loan for the purchase.

On the other hand, if you have a $70,000 budget for your next car, opting for an EV won’t cost you any more in upfront costs. Leaving you to reap nothing but benefits.

Is an electric car worth it?

Cars are a depreciating asset, electric or not. So whether a shiny new EV is ‘worth it’ is hard to say. If you don’t need a new car, it’s probably not a good idea to buy one.

But if it is time for an upgrade, and your budget allows it, an electric car could be worth it. It’ll certainly help future proof you against rising fuel costs, while helping reduce your carbon emissions. Because it’s not all about money, the chance to do something better for the planet is always nice, too.

Key benefits of electric cars include:

• Lower operating costs – electricity costs on charging an electric car are significantly cheaper than petrol prices
• Environmentally friendly –  the total emissions per kilometer for battery-powered cars are lower than comparable cars with internal combustion engines. Especially in NZ, where much of our energy comes from renewable sources
• Clean Car Discount – EVs and plug-in hybrids qualify for a government rebate
• They’re smooth and quiet – there’s no engine noise and, with no gears to work through, an EV is able to apply full power as soon as you touch the accelerator
• Exempt from road user charges – until March 2024
• Added safety – the weighty battery pack gives your EV a lower centre of gravity, so it’s less likely to roll. The lack of petrol or diesel also reduces the likelihood of it catching fire in a crash
• NZ’s climate is ideal for electric cars – extreme heat and cold can impact an electric car’s battery life. Thankfully, many parts of NZ has an ideal temperate climate

Compare electricity providers for free with Canstar Blue!

About the author of this page

This report was written by Canstar Content Producer, Andrew Broadley. Andrew is an experienced writer with a wide range of industry experience. Starting out, he cut his teeth working as a writer for print and online magazines, and he has worked in both journalism and editorial roles. His content has covered lifestyle and culture, marketing and, more recently, finance for Canstar.