The True Cost of EVs vs Petrol Cars in New Zealand

Switching to an electric vehicle (EV) might seem like a no-brainer because of its eco-friendly perks, but how does it compare financially to the trusty petrol cars we’ve relied on for decades? Many Kiwis ask, “Is the upfront cost worth the savings in the long run?”

In this article, we break down the costs of purchasing an EV or petrol car to help you decide which is best for your wallet.

Upfront Cost of Running Electric Cars vs Petrol Cars

The sticker price is often the first thing we consider when buying a car. And while there's plenty more to the story, every story needs to start somewhere.

Average Starting Price of the Three Most Popular EV Modes in 2024

EVs are typically more expensive up front, thanks to their advanced battery technology. Here’s what you’ll pay to get behind the wheel of three popular EV models this year:

Average Starting Price of the Three Most Popular ICE Vehicles in 2024

In comparison, petrol cars are easier on the wallet when it comes to the initial purchase:

Why Are EVs More Expensive?

The higher upfront cost of EVs is largely due to their batteries, which account for 30-40% of the total vehicle cost. While prices have dropped over the past decade, EVs are still considered premium purchases compared to their petrol-powered counterparts.

Adjusting to a Post-Rebate EV Landscape

Until the start of 2024, the New Zealand government provided rebates under the Clean Car Discount to encourage EV adoption, making the upfront cost of EVs a bit easier to swallow. However, with the scheme no longer in place, buying an EV in 2024 is now entirely up to market forces and your wallet. The absence of these incentives means EVs remain a higher-cost investment upfront than petrol cars.

On the flip side, petrol cars continue to face penalties for high emissions, which can add extra costs to their already shrinking appeal in a world moving toward cleaner energy. While the rebate may be gone, the push for greener transport is far from over.

Running Cost of EVs vs ICE Vehicles Once you’ve got the keys, it’s time to think about day-to-day expenses:

Running Costs of the Three Most Popular ICE Vehicles

At $3 per litre, petrol costs can quickly add up. Here’s what it costs to drive 100km in three popular ICE models:

Running Costs of the Three Most Popular EV Models

EVs are far more efficient when it comes to energy use. Using the national average electricity price of 33.5c per kWh, here’s the cost to travel 100km:

How Much Can You Save on Petrol?

If you’re clocking 15,000km a year, driving an EV like the BYD Atto 3 will cost around $804 annually, compared to $3,825 for the Toyota RAV4. Over five years, that’s about $15,000 in fuel savings, which could fund your next road trip or upgrade your home charging setup.

Maintenance and Servicing Cost of EVs Petrol Cars

EVs and ICE vehicles have very different needs for staying road-ready. Let’s compare.

Petrol Car Maintenance Costs

Petrol cars have many moving parts, which means more things can go wrong. Regular oil changes, brake replacements, engine tune-ups, and filter replacements add up to around $1,000 to $1,500 annually for maintenance.

EV Maintenance Costs

EVs, on the other hand, are simpler machines. They don’t need oil changes, and regenerative braking reduces wear on brake pads. Most owners spend between $300 and $500 a year on maintenance, roughly a third of what ICE drivers pay.

What About Batteries?

The big wildcard for EVs is battery replacement. While most EV batteries come with an 8-year/160,000km warranty, replacing one can cost between $10,000 and $20,000. Thankfully, battery technology is improving, and prices are expected to drop as production scales up.

Resale Value - What Happens Down the Line?

Depreciation hits every car, but EVs are feeling it more than petrol vehicles right now. Research from Driven Car Guide shows EVs can lose up to 40% of their value in the first year—meaning a $100,000 EV could drop to $60,000 in 12 months. In comparison, a typical petrol car loses around 30-35% over the same period.

Why the bigger hit for EVs? The introduction of Road User Charges (RUC) has added to ownership costs, and with a growing supply of EVs on the market, resale prices are taking a knock.

That said, petrol cars aren’t off the hook. As greener transport becomes the norm, emissions penalties and changing buyer preferences could cause ICE vehicles to struggle to hold their value in the long run. Either way, understanding depreciation is key to weighing up the true cost of ownership.

Factors You Can't Put a Price on

Choosing an EV isn’t just about cost savings; it’s about reducing your carbon footprint. While EVs produce zero tailpipe emissions, making them much cleaner in use, their manufacturing does come with a higher carbon cost. Research cited by the US Environmental Protection Agency shows that producing an EV, particularly its battery, generates about 60% more emissions than manufacturing a petrol car. This initial “carbon debt” comes from energy-intensive processes like heating electrode materials and preparing the battery for use.

However, that debt is quickly repaid. Analysis suggests it takes just two years of driving an EV to offset its manufacturing emissions. From there, EVs have a significant advantage, as petrol cars continue to spew carbon dioxide with every kilometre driven, an estimated 27 tonnes over 100,000km. By choosing an EV, especially when powered by renewable energy, you’re driving toward a cleaner, carbon-neutral future for Aotearoa.

So What’s Cheaper, EV or Petrol?

So, what's the verdict? The choice between an EV and a petrol car comes down to your priorities:

• Upfront Costs: Petrol cars are cheaper than EVs, but the gap is closing and will continue to close in the coming years.
• Running Costs: EVs dominate, with fuel and maintenance savings increasing.
• Long-Term Value: Although EVs depreciate faster at the moment, improving battery technology could flip this on its head very soon. Coupled with cheaper running costs and eco-friendliness, EVs are a strong choice for long-term value.

Whichever you choose, understanding the true costs ensures you're making a smarter decision for your wallet and the world around you.

For more in-depth analysis of the automotive industry in New Zealand, check more blogs from AutoFlip:

• How Power Trip is Driving Change with Fleet Data
• Was the New Zealand Clean Car Discount Policy Effective?
• The State of the NZ Used Car Market in 2024 - A Decade in Decline