Aug 14, 2023 / News

Financial Planning / Help Saving / Smart Savings

The automotive industry sparking up with electric vehicles

With electric vehicles fast overtaking petrol driven cars in sales in Australia, what are the considerations for the industry, the environment, and consumers?

The popularity of electric vehicles has been a long time coming. While electric vehicles may just be giving petrol driven cars a run for their money now, the technology has been around for centuries. The first electric cars appeared on roads as early as the 19th century, however internal combustion engines, fuelled by petrol, took off shortly after this in the 1920s and quickly became the power source of choice for cars.

Growing in popularity

While at present internal combustion engines still dominate passenger vehicle sales in most categories, that’s changing – mainly in the medium car space. In fact, three out of five new medium-sized cars sold in Australia in the first quarter of the year were powered by electric batteries, according to new figures from the Australian Automobile Association.

In general, the popularity of electric vehicles is surging, with year-to-date sales totalling 32,050 – increasing in 12 months by a staggering 778.3%.

Market share is likely to continue to grow. The main barrier to entry has to date been primarily cost but with new more cost-effective models flooding the market, electric vehicles are becoming even more accessible. One other concern for consumers was that electric vehicles were perceived as being less powerful than gas guzzlers, but new models are providing greater grunt. The latest edition to the Queensland police force’s fleet is electric and is being hailed as their most powerful car yet.

Easy on the hip pocket

So, what are the considerations if you are thinking of making your next car an electric vehicle? Electric vehicles are significantly cheaper to run, offering fuel savings of up to 70% and maintenance savings of around 40% compared to a standard petrol or diesel vehicle. For an average car travelling 13,700 km per year, this could amount to an annual fuel saving of $1000, or $1200 if the EV is able to charge overnight on an off-peak tariff.

Electric vehicles are also much cheaper to maintain, with less moving parts than a petrol or diesel car. There is relatively little servicing and no expensive exhaust systems, starter motors, fuel injection systems, radiators and many other parts that are not needed in an electric vehicle.

The benefit to the environment, health and the economy

The benefits of electric vehicles are broad-ranging and have the potential to impact our personal health, the health of our environment and the economy. Breathing in the contaminants from motor vehicles is implicated in a range of health problems and transport is a significant contributor to Australia’s greenhouse gas emissions. The potential benefits for our economy in terms of reduced greenhouse gas emissions, less air and water pollution, and less vehicle noise are estimated to equate to almost $500 billion over the next 30 years.

What are the considerations?

While there are a lot of benefits to electric vehicles, both at a personal level and at a more macro level, there are also some considerations you need to think about if buying an electric vehicle is on your radar.

One of the biggest issues with electric vehicles is the fact that they need charging quite regularly, generally having a charging range of around 80-100kms. This limitation may mean an electric car is great as a runabout but might not be so suitable if you are regularly travelling longer distances.

Then there are the practicalities of charging your vehicle. New electric vehicles come with a dedicated charger which is usually mounted on the garage wall. You also need to make sure you have access to charging infrastructure while you are out and about so it’s a good idea to check what is available close to you and be aware of likely charging times.

There are a few factors that you need to consider, but electric cars are certainly here to stay and becoming ever more popular so it’s worth thinking about going electric for your next vehicle purchase.

Speak to your local Nexia Edwards Marshall adviser if you would like to know more money-saving ideas to see what is suitable for you.

 

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