Rising fuel costs make switching to an EV more appealing than ever

If you’ve filled up your tank recently, you’ve probably noticed it: fuel prices in Australia have surged past $2 per litre, and many experts warn that volatility may continue for some time.

According to some national news reports, fuel retailers across the country have been selling petrol above the $2 mark, with some regions experiencing even sharper spikes as demand and supply pressures collide.

For many Australians, these fluctuations  aren’t just a mild inconvenience. They’re a growing budget concern.

The cost of keeping a petrol vehicle on the road is rising, and for the average driver, that means more money disappearing into the bowser every year.

Fortunately, as fuel becomes more expensive, the alternative - electric vehicles (EVs) - is becoming increasingly accessible.

In this article we break down the real numbers behind petrol versus EV running costs, explain why EV ownership is becoming more accessible, and show how a novated lease can make the switch simpler and potentially more affordable.

The costs of a petrol car

Fuel costs have always been one of the biggest components of car ownership, but with petrol prices on the rise, the total annual spend adds up quickly. 

According to the Electric Vehicle Council, the average Australian drives about 12,000 km per year and spends around $2,500 annually on petrol, which works out to approximately 20 cents per km. 

That’s $2,500 spent every year just to keep your car moving - and that figure only grows when fuel prices spike, commute distances increase, or family driving habits shift.

The EV advantage

Electric vehicles don’t rely on fluctuating petrol or diesel markets; instead, they run on electricity. 

The same Electric Vehicle Council analysis shows that an EV travelling the same annual distance costs about:

• $500 per year to charge - around 4 cents per km, and 
• As little as $200 per year if you have access to home solar or off-peak tariffs.  

Even without solar, many EV drivers see a dramatic drop in the day-to-day running costs of their vehicles when compared with petrol vehicles.

For some households, that’s a significant savings that can be redirected to savings, holidays, childcare, or anything else that matters.

EVs offer more than just fuel savings

Beyond the day-to-day running costs, EVs come with several other meaningful advantages.   

1. Lower maintenance costs: EVs have far fewer moving parts than petrol cars. There’s no engine oil, no spark plugs, no exhaust system, and fewer mechanical components to wear out. This could lead to fewer service visits and lower repair costs over the life of the vehicle. 

2. A more sustainable option: EVs offer a cleaner, more sustainable way to drive. They generate significantly fewer emissions than petrol vehicles, helping reduce air pollution and greenhouse gases. And when charged using renewable energy, they can operate as a true zero-emission option. 

3. Convenience of home charging: Enjoy the ease of charging at home. Simply plug-in your EV before bed and you could wake up to a full battery, depending on your charger and remaining range.  

The savings add up over time

Let's break it down over a typical five-year ownership period using the figures provided by the Electric Vehicle Council: 

• Petrol costs: $2,500 per year × 5 years = $12,500 
• EV charging costs: $500 per year × 5 years = $2,500 
• EV with home solar/off-peak: $200 per year × 5 years = $1,000 

That’s a potential saving of up to $11,500 over just five years - before even considering spiking fuel prices, maintenance savings or government incentives. 

For many Australians, those savings alone make the decision to switch feel far more straightforward. 

How a novated lease makes switching even easier

While buying an EV outright can be expensive upfront, a novated lease through Smart unlocks tax savings and removes the need for big, upfront payments. 

With a novated lease, your EV and running costs are bundled into one regular payment, deducted from your salary each payday.

And thanks to the Australian Government’s Electric Car Discount policy^, people with an eligible EV can have 100% of their lease repayments and running costs taken from their pre-tax salary.

This could lead to tax savings that aren’t available for petrol or diesel cars. 

Choosing a novated lease for an EV typically means: 

• Lower income tax 
• Smoother budgeting 
• No large upfront payment 
• Access to brand new EV models with modern features