It wasn’t long ago that electric cars were the darlings of the showroom.
Buyers were queueing to own vehicles that, at the time, were hard to get hold of and held the promise of lower running costs.
But in 2024 the new car sales tables turned.
Sales of EVs have largely plateaued – they finished the year up 4.7% – while hybrids are booming, up 75% over the same period.
For every EV sold Australians snapped up 2.1 hybrids, some of them plug-in hybrids that can be recharged externally (most hybrids, including Toyotas, run purely on petrol).
A numbers game
Much of it comes down to price and choice.
Many desirable EVs are priced about $60,000 and above, keeping them out of reach of many.
The bulk of the hybrid activity has occurred below that threshold, making them more attainable to average families.
That’s in part because EVs are still expensive.
Batteries cost a lot to manufacture and EVs typically have battery packs 50 to 100 times bigger than what you get in a hybrid.
Those prices, along with charging infrastructure, are what the corporate affairs manager at Cox Automotive, Mike Costello, labels “two of the impediments” to people adopting EVs.
EVs cost less to run
Despite their upfront cost, EVs generally cost less to own than a hybrid.
Take the Tesla Model Y and Toyota RAV4 Hybrid as an example.
The RAV4 uses a claimed average 4.7 litres of fuel per 100km. The Australian Institute of Petroleum reports average unleaded prices of $1.72 for the past 12 months.
For a RAV4 that covers 13,500km it would cost $1,115 in fuel, about half that of many rival SUVs.
The Tesla uses 14.6kWh of electricity per 100km.
Electricity prices vary but tend to hover around 30-35 cents a kilowatt hour, depending on where you live.
That would mean something like $680 to take the Tesla the same distance.
However, many EV owners charge during off-peak times or use EV electricity plans to take advantage of lower rates.
That could lower your EV electricity bill to something like $250 – or less.
It’s the opposite if you go on a road trip. EV fast charging is expensive – it can top 80c/kWh.
That’s more than you’d pay for a hybrid on the same road trip – but it’s only for that road trip.
So even if you do 2,000km a year relying on ultra-rapid charging and pay that 80c/kWh – then utilise cheaper charging rates at home – your car’s annual electricity bill would still be less than $500.
Costello says getting that message to those considering an EV is invaluable.
“If people are hearing from friends or loved ones or colleagues that they’re saving so much money, that’s a really powerful message.”
There’s also the convenience of charging at home rather than having to visit petrol stations.
Tax benefits
Those running costs are before you take into account potential tax benefits.
Electric cars priced below $91,387 can take advantage of a fringe benefits tax exemption that allows salaried employees to lease them out of their pre-tax income. The lease can also incorporate running costs, including registration, servicing and insurance.
The same FBT exemption applies to plug-in hybrid vehicles until April 2025.
It means an EV or plug-in hybrid electric vehicle can be cheaper to lease than a hybrid costing $15,000 or $20,000 more.
And the benefits continue throughout the lease period.
Regular hybrids – the popular ones that run purely on petrol – aren’t entitled to the same tax break.
According to LeasePlan’s online calculator, a person earning $100,000 and leasing a Toyota Camry Ascent ($44,348 drive-away in NSW) to drive 15,000km annually over three years would take home $62,037 after tax and leasing costs.
That same person could buy a Tesla Model 3 Rear-Wheel Drive ($59,845 drive-away in NSW) and take home $63,629.
That’s a $1,592 annual benefit to buy a car that retails for about $15,000 more.
We mostly don’t drive too far from home
Some argue against an EV because they’re worried it won’t be able to take them across the Nullarbor.
Despite having never driven across the Nullarbor, they conjure up worst-case scenarios … just in case.
The average distance driven by Australians each day is about 33km, so an average EV may need to be charged every 10 days or so.
While Costello acknowledges that those without off-street parking face bigger hurdles to EV adoption, the millions with freestanding houses and a home charger are “particularly well placed to get the best from [an EV]”.
And when you do go on that road trip, new and improving infrastructure – particularly on major routes – means you can now add a few hundred kilometres of range in less than 20 minutes.
Perfect for a coffee and rest stop!
The middle ground
When the product – and price – is right, buyers respond.
In October MG sold its MG4 hatch for $30,990 drive-away (it’s since risen to $34,990), the cheapest a new EV has been in Australia to date.
It was the top selling EV for that month – it was also the second-bestselling small car, outsold only by the Toyota Corolla.
There’s EV success elsewhere, too, especially in the medium car market.
For the first time EVs accounted for more than half of all medium car sales. Of the 46,146 medium cars sold last year 27,382 of them – 59% – were powered solely by electricity.
Given only five of the 20-plus models are electric, it shows the strength when the product is compelling.
Toby Hagon is a motoring journalist and the editor of EV Central
