Electric Cars vs Petrol Cars: Costs and Savings

Thanks to former government subsidies, high petrol prices and consumers looking to go green, electric cars have become a popular option. 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?

There’s now an electric car to match almost every petrol vehicle. Whether you’re after a hatchback or sedan, crossover or large SUV, there’s an electric car option. However, every electric car option does come with more than just a range restriction: its price!

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 around $30,000”.

Currently, the cheapest new EV in the country is the GWM Ora, which comes in at around $42,000. However, “affordable” EVs are becoming more and more common, with popular models like the MG ZS, BYD Dolphin and BYD Atto available for under $50,000.

To provide further insight into these costs, we’ve run the numbers on the top three selling EVs and petrol vehicles in New Zealand to the end of November:

Top three selling EVs

Top three selling cars

As you can see, the top three electric cars are much more expensive than the top three petrol cars.

What if you can’t afford even the cheapest new EV?

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 $42,000 for the GWM Ora, 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 2020 will be a lot better than one from 2015. 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: their running costs, due to the high price of petrol. Below we’ve crunched the numbers on the running costs for last year’s most popular petrol and electric cars.

*Based on national average electricity price. Correct as of 26/10/2023

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 $763 for EVs and $2842 for petrol vehicles. Over the course of the year, this is a difference of $2079!

However, once a road user tax for EVs is introduced in April 2024, these savings will decrease significantly. Currently, diesel vehicles pay a Road User Charge (RUC) of $76 per 1000km, and it is expected that EVs will pay a similar rate. This means that EVs will incur an additional cost of $1064 per year (based on an average travel distance of 14,000 km per year). As a result, the annual cost of running an EV will be $1827, reducing the savings for EV drivers to only $1015 per year compared to a petrol vehicle.

However, there are still ways of lowering the running costs of an EV. If you choose a power plan with off-peak power rates, your EV running costs could be significantly lower.

Or, even better, if you opt for a power plan with free power hours, you could wind up paying nearly nothing at all.

Another way to score yourself free EV power is to install solar at your house. That way your car could run on nothing but sunshine!

→Related article: What is the Road User Charge?

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, just click on the button below for the full results of our survey.

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. But, if you can overlook the inconvenience of finding an EV technician, you’ll be saving some big bucks! For example, Pit Stop does advertise EV servicing starting from $129, which is $70 cheaper than the next cheapest service option.

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 2020 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.

Compare Outstanding Value Car Insurance with Canstar

Looking for great value car insurance for you and your family? Each year, we release our car insurance awards, including winners for Insurer of the Year, Outstanding Value, and Most Satisfied Customers. As part of our award results, we also publish our Outstanding Value Star Ratings, covering car insurance for different age groups. Below are our top-rated providers in the drivers aged 30-49 category. Click here to view our complete car insurance Star Ratings for all age groups.

Comprehensive Cover: Drivers 30-49:

Provider	Star Rating

See here for our ratings methodology. The table above is an abridged version of our research. For the full results of our latest Car Insurance Ratings and Award, click here.

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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. However, remember that once RUCs are introduced for EVs, you won’t be saving a huge amount of cash each year. Although, having an EV can help future proof you against rising fuel costs, while helping reduce your carbon emissions. 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
• 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

About the author of this page

This report was written by Canstar Content Producer, Caitlin Bingham. Caitlin is an experienced writer whose passion for creativity led her to study communication and journalism. She began her career freelancing as a content writer, before joining the Canstar team.