Buying an Electric Car

Should you buy an electric car now or wait? While electric cars are no longer a novelty, there is still a long road until they represent the majority. To help Australians move from fossil fuel vehicles to electric cars, various governments offer different incentives, rebates and grants.

Electric Car Benefits

Every year, increasingly more people are buying electric cars. According to data from the Federal Chamber of Automotive Industries (FCAI), electric vehicle sales have increased significantly over the past 10 years, from a market share of just 0.03 per cent in 2013 to 9.6 per cent in 2024, that’s one in 10 cars.

Three reasons behind the growing market trend and adoption rate of electric cars include:

• Positive Environmental Impact

Electric cars offer various environmental benefits. Even the most carbon-intensive powered hybrid models produce substantially fewer emissions than normal vehicles. In fact, a Belgium VUB University study found that on average, electric vehicles will emit half the CO2 emissions of a diesel car by 2030.

• Supportive Government Legislation

Federal, state and local governments continue to enact new laws promoting electric cars, with one such recent law being the New Vehicle Efficiency Standard (NVES). Similar to those in the United Kingdom, United States, China and Japan, the NVES puts an emissions cap across automakers' fleets to encourage them to balance sales of high-polluting vehicles with low-emission models like EVs.

• Growing EV Charge Infrastructure

As of Q4 2023, there are 840 fast charging locations in Australia. This is expected to be 1,600 in 2024. With charge stations installed in more sites than traditional gasoline and diesel stations, the potential distribution is expected to exceed traditional fuel distribution. Thanks to strong uptake of solar panels and batteries, carpark EV charging is also expected to increase.

On average, Australians travel 33km a day. With charge stations becoming more available, electric cars are becoming increasingly viable in both cities and towns. Growing government incentives also help to make electric cars increasingly accessible.

There are a range of benefits to driving electric, including:

• Reduced fuel costs and higher efficiency

• Less maintenance

• Fuel security

• Reduced traffic noise

• Improved air quality

• Positive environmental impact

Types of Electric Car Models

Electric vehicle models in the Australian market can be classified into four categories:

• Battery Electric Vehicles (BEV) only use a rechargeable battery, which is charged from an external source, to power at least one electric motor with no secondary source of propulsion

• Plug-in Hybrid Electric Vehicles (PHEV) are powered by internal combustion engine and at least one electric motor powered by a rechargeable battery, which can be recharged from an external source

• Hybrid Electric Vehicles are powered by both an internal combustion engine and at least one electric motor powered by a rechargeable battery, which is unable to be recharged by an electric source but instead recharged by the internal combustion engine and any other onboard energy recovery systems

• Hydrogen Fuel Cell Electric Vehicles (HFCEV) use electricity from a fuel cell, which is powered by hydrogen, rather than electricity from batteries

According to the Electric Vehicle Index, the majority of electric cars sold in Australia were Hybrids, followed by BEVs, PHEVs and HFCEVs in decreasing order. Popular hybrid cars include:

• Parallel hybrids - these cars are the most common type of hybrid (the Toyota Prius is this type). They work when the car's wheels are powered by electricity, by petrol or by both working together

• Range extender hybrids - these cars use the conventional engine to produce electricity to recharge the electric batteries, but the engine never drives the car. Models (such as the BMW i3) can drive further on an electric motor than parallel hybrids most of the time, and

• Plug-in hybrids - these cars can be plugged into an electric outlet to charge its batteries. They are basically a halfway point between full electric vehicles and conventional hybrids

How to Buy an Electric Car

Not sure how to start? Understanding electric car pros and cons will help you choose the best electric car, as will knowing about different electric car batteries. A good car buying guide, even a list of top 10 electric cars, can also help you pick the best model. Then a specialist electric car buyer can help you find a deal.

Two key considerations when buying an electric car are:

• EV Purchase Price

Much has changed in the last 5 years. As of 2023, there are now around 50 electric vehicle models on the Australian market. This has resulted in significantly more competition and regular price drops. In the next 12 months we can expect to see more new models, and even more price drops.

• EV Cost of Ownership

The cost of owning an electric car is increasingly less than owning a petrol or diesel car. This is largely because electric motors are more efficient at converting energy to motion than combustion engines. Lower running costs and less environmental impact make electric cars increasingly more attractive.

Federal EV Incentives

Since 2012, the Clean Energy Finance Corporation (CEFC) has been supporting Australia’s transition to net zero emissions by pursuing innovation in the areas of technology, renewable energy and knowledge sharing, including investing over A$12 billion since its inception.

This includes its continued support of EV ownership in Australia through a new $40 million investment to provide discounted finance for the retail Green Car Loan offered by Australian non-bank lender, Firstmac. The discounted loan can save customers between an estimated $1,400 and $2,500¹, depending on the size and length of the loan.

The collaboration between CEFC and Firstmac helps eligible Firstmac customer to enjoy a discounted green car loan. To encourage manufacturers to make more EV models available to the market, Firstmac is extending the discount to EVs priced under $90,000, provided strong emissions standards are met.

¹ Calculation based on loans of $50,000 and $90,000 respectively, over five years.

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