Need to know
- EV sales are on the up. Is 2025 the right time to get on board?
- EV infrastructure in Australia has improved, but still lags behind Europe
- Prices are still high here in Australia, but not as high as you might think
If you've been paying attention to the roads while driving (and you absolutely should) you'll probably have noticed an increase in electric vehicles on the road.
According to data from the EV Council, EVs (both battery-electric and plug-in hybrid combined) accounted for 9.5% of all new car sales in Australia throughout 2024. That's an incredible 150% increase compared to 2022. These numbers are expected to grow significantly over the next five years.
But regardless of this growth, we're still lagging behind Europe. In the UK EV sales represented 19.6% of all new car sales last year. And in Norway EVs make up an astonishing 89% of new car sales.
So, is it time for Australians to make the switch? And – more crucially – is 2025 a good year to finally buy an EV?
Why are EVs not as popular in Australia?
According to a report published by the Australian Automotive Dealer Association, cost was the biggest barrier to entry for Australians when it comes to purchasing EVs. Despite the fact that most of us understand that EVs have lower running costs than traditional petrol vehicles, for many consumers the initial outlay is still too much.
But the second biggest concern for consumers is a lack of charging infrastructure – it's no good having an electric car if you can't take it on a road trip. Australia is a big country, with a relatively small population density, so it makes sense we have fewer charging stations compared to folks in Europe and the US. Despite a huge surge in charging stations being installed over the past few years, we're still lagging behind.
Regardless of these issues, more and more Australians are interested in buying EVs.
Despite a surge in charging station installation, we're still lagging behind.
Are there enough charging stations here in Australia?
While we don't have the infrastructure of some other jurisdictions, the situation is improving.
NSW is arguably the most EV-friendly state in terms of sheer volume of chargers. But across Australia as a whole, the infrastructure is arguably growing faster than the EV market itself, and it shows no signs of slowing.
"There still aren't enough EV chargers in most areas, but that's changing," says CHOICE EV expert Chris Barnes.
"As people see the chargers around and EV charging becomes an everyday sight, they'll get more comfortable with the idea of owning an EV.
"Also, technology is developing so fast. In a few years' time I expect there'll be EVs that can charge in a few minutes, nearly as fast as a petrol top-up. And battery prices and capacity keep improving."
Why are EVs so expensive in Australia?
In Australia cars in general tend to be more expensive, especially compared to other bigger markets like the US and Europe, and they also cost more to insure. Factors like inflation, the relative value of the Aussie dollar and the cost of shipping to a relatively remote country with a small population all undoubtedly play a part in the cost of cars here in Australia.
Compounding these issues is a supply and demand problem. In Australia, EVs made up only 9.5% of cars sold in Australia last year. That's a big improvement, but way behind most European countries, where EV sales account for up to 89% of all cars sold. Our small population and lower demand means that cars can't be shipped and sold at scale, which contributes to the increased price.
Come EVs are now actually cheaper here than in the UK. As an example, the base model MG4 EV in the UK costs £26,995 (about $53,000). Here, it costs $34,990
CHOICE EV expert Chris Barnes
That being said, prices are coming down. And the EVs being sold in Australia are cheaper than you might think.
"I think EVs are actually not always that much more expensive in Australia than in most other Western countries," says Chris. "Probably they are a bit cheaper in some other countries like the USA. Certainly they are generally much cheaper in China, as you'd expect.
"But some EVs are now actually cheaper here than in the UK. As an example, the base model MG4 EV in the UK costs £26,995 (about $53,000). Here, it costs $34,990."
EVs made up 89% of new car sales in Norway last year.
What about EV running costs?
There's definitely good news here. You absolutely will save money on running costs if you purchase an EV over a petrol car. You just need to check whether those savings are significant enough to justify the higher initial outlay.
According to Transport for NSW, you can save up to 70% on fuel costs and 40% on maintenance costs. According to their numbers, that amounts to a saving of $1000 on fuel costs per year for an average car driving 13,700 kilometres per year.
This, of course, all depends on where and when you charge your EV, solar charging, and whether or not you take advantage of off-peak energy tariffs.
Regardless, you will save money on running costs if you use an EV.
Are there incentives for buying EVs in Australia?
If you're buying an EV as part of a fleet of company cars, or under salary sacrifice arrangements, you could be eligible for a fringe benefit tax exemption that could potentially save you thousands of dollars. Eligibility is dependent on a number of factors, however, and only applies to a select group of EV models. Additionally, the deal expires for plug-in hybrids in April.
There are additional benefits you may be able to access depending on which state you live in. For example, there's a $3500 rebate in Western Australia when you purchase a new full battery-powered EV under $70k (you can apply for the rebate up until May 2025). These incentives change frequently and there are a number of restrictions, so triple check what you're eligible for before buying.
What about EV resale value?
Despite the fact that EVs have fewer moving parts and are easier to service over long periods of time, data shows that EVs don't hold their resale value compared to equivalent petrol vehicles.
That's partly due to the fact they're more expensive to begin with, but also due to (often inaccurate) perceptions about EVs among folks perusing the second-hand market.
But, on the flip side, this means it could be worth picking up a relatively cheap secondhand EV on the used car market.
Is now a good time to buy an EV?
With prices coming down and a host of new models to choose from, 2025 could potentially be a pretty good year to jump on board the EV bandwagon according to Chris.
"If you are thinking of buying a new car and considering an EV, I'd say there'll be a lot of good options this year," he says."This year we've got multiple Chinese brands launching soon, or already here. They see Australia as a fertile market, with no import tariffs to worry about, and they know there is a lot of interest here in cars that are well-priced."
My only real concern with these brands is not the quality of the cars, but the quality of the local service and dealerships
CHOCIE EV expert Chris Barnes
But there are a few caveats.
"Personally, my only real concern with these brands is not the quality of the cars, but the quality of the local service and dealerships. Many of those brands don't have a presence here, so they are partnering with established car dealer networks, who might not know the cars that well, and who might not offer the best service."
There are some environmental and human rights concerns over the materials used in manufacturing EVs.
What about ethical concerns?
One of the key reasons people invest in EVs over petrol-fuelled cars is concern for the environment. Despite the fact that Australia is still mainly powered by fossil fuels (in 2023 it was reported that 65% of our energy came from coal, gas and oil), it's still better to use grid-powered electricity to run an EV than driving a petrol car. Coal-fired power plants are more efficient than a car's engine and EVs are more efficient than petrol cars. All these energy savings add up.
But there's also the issue of the materials required to build EVs. A recent CHOICE investigation looked into human rights concerns at nickel smelters in Indonesia where Tesla, Ford and Volkswagen source minerals to help build their EVs. It makes for grim reading.
It shouldn't necessarily dissuade you from buying an EV over a petrol car, but it's an issue worth being aware of.
Which EV should you buy?
That's a trickier question to answer and it depends on a number of factors, not least of which is how much you're willing to spend, and what kind of range you'll require for everyday use.
We've reviewed a whole host of EVs currently available in Australia. You can head there for more info.
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