For Australian drivers in 2026, switching from a petrol car to an electric vehicle (EV) can yield significant savings on running costs, typically between 6 and 12 cents per kilometre. This substantial difference is driven primarily by cheaper ‘fuel’ (electricity) and markedly lower maintenance requirements, translating to thousands of dollars in annual savings for the average motorist. While upfront purchase prices for EVs are still generally higher, the total cost of ownership (TCO) is rapidly shifting in favour of electric.
This guide breaks down the real-world costs of owning and running an EV versus a comparable petrol vehicle in Australia for 2026, providing clear figures and state-specific details to help you make an informed decision.
Fuel/Energy Costs: The Biggest Saving
The most immediate and impactful saving for EV owners comes from energy costs. Unlike volatile petrol prices, electricity for charging an EV, especially at home during off-peak hours, is considerably cheaper.
As of June 2026, the national average for Unleaded 91 petrol is around 170.0 cents per litre (c/L), though this is projected to rise to approximately 199 c/L in Sydney by July due to the end of the federal fuel excise cut. Diesel averages around 207.1 c/L nationally. For our calculations, we’ll use a conservative average of $1.90/L for petrol and $2.10/L for diesel to reflect expected prices post-excise.
For electricity, home charging during off-peak periods can cost as low as 8-15 cents per kilowatt-hour (kWh). Peak-hour home charging typically ranges from 30-45 cents/kWh, while public fast chargers generally cost 40-60 cents/kWh. Most EV owners (80-90%) predominantly charge at home.
Let’s compare the ‘fuel’ costs for a typical 15,000 kilometres driven annually, using popular models:
| Vehicle Type | Model (Example) | Fuel/Energy Consumption | Cost per 100km (Approx.) | Annual Fuel/Energy Cost (15,000km) |
|---|---|---|---|---|
| Petrol SUV | Mazda CX-5 (2.5L AWD) | 7.4 L/100km | $14.06 ($1.90/L petrol) | $2,109 |
| Hybrid Hatch | Toyota Corolla Hybrid | 4.0 L/100km | $7.60 ($1.90/L petrol) | $1,140 |
| EV (Home Off-Peak) | BYD Atto 3 / Tesla Model 3 | 15 kWh/100km (average) | $1.80 ($0.12/kWh electricity) | $270 |
| EV (Home Mixed) | BYD Atto 3 / Tesla Model 3 | 15 kWh/100km (average) | $4.50 ($0.30/kWh electricity) | $675 |
| EV (Public Fast) | BYD Atto 3 / Tesla Model 3 | 15 kWh/100km (average) | $7.50 ($0.50/kWh electricity) | $1,125 |
“70% of EV owners surveyed by the Electric Vehicle Council in 2025 reported spending less than $300 per year on maintenance.”
As the table illustrates, an EV charging predominantly at home during off-peak times can reduce your annual fuel bill by over $1,800 compared to a mid-sized petrol SUV. Even relying solely on public fast charging, EV ‘fuel’ costs are competitive with efficient hybrids and still offer savings over traditional petrol SUVs. For more on optimising your home charging setup, see our guide on Best EV Home Chargers in Australia 2026: A Buyer’s Guide to Costs and Installation.
Maintenance Costs: Fewer Moving Parts, Lower Bills
Electric vehicles have significantly fewer moving parts than internal combustion engine (ICE) cars. This inherent simplicity translates directly into lower maintenance costs. EVs don’t require oil changes, spark plug replacements, exhaust system checks, or fuel filter changes. Regenerative braking also reduces wear on brake pads, extending their lifespan.
- Petrol Cars: Typically incur $700-$1,200 per year for routine servicing and maintenance.
- Electric Vehicles: Many EV owners report spending less than $300 per year on maintenance. Industry research suggests EVs cost 50-70% less to service than equivalent petrol vehicles over their lifespan.
This difference alone can save EV owners another $400-$900 annually.
Upfront Purchase Price & Incentives
The initial purchase price of an EV remains a key consideration, though the gap with petrol cars is narrowing rapidly. In 2026, several entry-level EVs are priced competitively with, or even below, comparable petrol models.
Example Entry-Level Prices (June 2026, approximate drive-away):
| Vehicle Type | Model (Example) | Price (Drive-Away) |
|---|---|---|
| EV | MG ZS EV Excite Standard Range | ~$34,990 |
| EV | BYD Atto 3 Essential | ~$44,092 |
| Petrol | Toyota Corolla Ascent Sport Hybrid | ~$35,563 |
| Petrol | Mazda CX-5 G25 Pure AWD | ~$43,000 (after ORCs) |
Australian EV Rebates and Incentives (2026)
Government incentives significantly impact the effective purchase price and running costs of an EV. While many direct purchase rebates have phased out, other valuable benefits remain:
- Federal FBT Exemption: The most substantial incentive is the Fringe Benefits Tax (FBT) exemption for eligible Battery Electric Vehicles (BEVs) and Hydrogen Fuel Cell Electric Vehicles (FCEVs) provided through a novated lease or employer arrangement. This can save employees up to $18,000 per year in tax, making salary packaging an EV highly attractive. Note that Plug-in Hybrid Electric Vehicles (PHEVs) are generally no longer eligible for this exemption for new arrangements from April 1, 2025.
- Luxury Car Tax (LCT) Threshold: EVs have a higher LCT threshold of $91,387 (for 2025/26), compared to $80,567 for non-EVs, allowing for the purchase of more expensive EVs without incurring the LCT.
- Import Tariff Waiver: A 5% customs duty waiver applies to eligible EVs valued below the LCT threshold, reducing upfront costs.
State-Specific Incentives (as of June 2026):
- New South Wales: Emissions-based registration discounts apply to EVs and low-emission vehicles. Direct purchase rebates and stamp duty exemptions concluded in 2023.
- Victoria: Reduced stamp duty for Zero and Low Emission Vehicles. A distance-based Road User Charge (RUC) of 2.8 cents per kilometre applies to EVs.
- Queensland: While the $6,000 rebate ended in 2024, lower registration and stamp duty rates for ZEVs are still active.
- ACT: Offers reduced stamp duty (minimum 2.5%), the lowest-tier registration fee (around $382 per year), and 3% low-interest loans of $2,000 to $15,000 for new or used EVs.
- South Australia: Provides a reduced stamp duty rate for EVs.
- Western Australia: No active EV-specific purchase incentives or registration discounts as of 2026. A distance-based Road User Charge (RUC) of 2.5 cents per kilometre applies to EVs.
- Northern Territory: Offers free registration and stamp duty concessions (up to $1,500) until June 30, 2027. A $1,000 home charger rebate is available until June 30, 2026.
- Tasmania: Direct rebates and stamp duty waivers have concluded.
These incentives, particularly the federal FBT exemption, can dramatically reduce the total cost of ownership, making an EV more affordable than many comparable petrol cars over the long term. For a deeper dive into making the switch, consider reading From Petrol to Plug: The Ultimate First-Time Buyer’s Guide to Switching to an EV in Australia 2026.
Other Running Costs & Considerations
Beyond fuel and maintenance, other costs contribute to the running expenses:
- Registration & CTP: Generally similar between EVs and petrol cars, though some states offer minor discounts for EVs. However, Victoria and Western Australia, and potentially New South Wales, have introduced Road User Charges (RUC) for EVs, adding 2.5 to 2.8 cents per kilometre to running costs, which can amount to $300-$500 annually for average drivers.
- Insurance: EV insurance premiums can vary. While some insurers might price them higher due to repair costs or newer technology, competition is increasing, and many EVs fall within similar price brackets to equivalent petrol vehicles.
- Tyres: EVs, particularly heavier models with high torque, can experience faster tyre wear. This is a minor but notable ongoing cost.
- Charging Infrastructure: While a home wallbox charger costs around $1,500-$2,000 installed, this is a one-off investment that enables significant long-term fuel savings.
- Public Charging Networks: Australia’s public charging infrastructure is expanding rapidly. Understanding the costs and reliability of different networks is crucial for longer trips. Refer to our guide on Best Public EV Charging Networks in Australia 2026: Costs, Reliability & How to Plan Your Trips for more information.
Bottom Line
In 2026, the financial case for owning an electric vehicle in Australia is stronger than ever. While the upfront purchase price may still be a hurdle for some, the ongoing running cost savings are undeniable. For an average Australian driving 15,000 kilometres annually, choosing an EV can save between $900 and $1,800 or more per year in fuel and maintenance costs alone, depending on charging habits and the petrol vehicle comparison. When coupled with federal incentives like the FBT exemption, the total cost of ownership for an EV can significantly undercut a comparable petrol car over its lifespan. The most substantial savings are realised by those who can primarily charge at home using off-peak electricity tariffs. With increasing model availability and competitive pricing, 2026 marks a pivotal year where the long-term financial benefits of electric vehicles firmly outweigh those of traditional petrol cars for a growing number of Australian motorists.