The marketing of electric vehicles (EVs) often promotes them as cost-effective, environmentally friendly alternatives to traditional internal combustion engine (ICE) vehicles. Many Australians are switching to EVs because of reduced emissions, lower running costs, and government incentives.
However, the impact of several hidden costs – ranging from inadequate EV infrastructure to the uncertainty of future tax liabilities, affects EV ownership in ways that are not immediately obvious. This article examines some of those costs and presenting a fairly strong argument for why one might never drive an electric vehicle.
High Initial Purchase Price
The high upfront cost is one of the biggest barriers to EV adoption in Australia. Prices have been decreasing globally, but EVs are still significantly more expensive than the petrol or diesel substitutes. Even when the EVs do come down in price, they’re still not anywhere near what one would call affordable.
Government rebates and incentives help, but they don’t bridge the price gap that much. Many of the popular EV models in Australia have a starting price well above $60,000.
Limited Public Charging Infrastructure
Although Australia is spreading the public charging network for electric vehicles, these facilities are still very thin on the ground in a lot of places, particularly outside the big cities. This makes it impossible to power up an electric vehicle for a road trip across the outback, for instance. Or even to travel from one city to another along the relatively well-traveled eastern or southern coastal routes.
A Pricey Home Charging Infrastructure
Another daunting expense presents itself when it comes to installing a home charging station. A standard Level 2 home charger can cost between $1,500 and $2,500, plus installation. And this is the standard version; if your house requires an electrical system upgrade, or if your situation is particularly unique (like not having a garage or driveway), you can count on the costs reaching $5,000 or even more.
Electricity Costs and Peak Time Pricing
Even though it costs less to fuel EVs compared with petrol vehicles, electricity prices can be high, especially during peak demand hours. In some regions of Australia, electricity pricing is very volatile. Thus, charging an EV during peak times can become a significant outlay.
As with any type of cost, careful planning can help mitigate some of the price increases associated with charging during peak hours. Off-peak strategies like overnight charging could help alleviate this concern.
Battery Replacement and Degradation
Advancing battery tech notwithstanding, EV batteries lose their juice over time, which means the range and performance we expect from them can also decline. Most manufacturers seem to have a pretty good handle on how to warranty an EV battery against degradation, as they typically cover it for 8 years or 160,000 km of driving.
But if you are out of this warranty and your battery is on the fritz, be prepared to spend a small fortune, depending on the make and model of your car.
Higher Insurance Premiums
EVs usually carry higher insurance costs than conventional cars. This stems from several factors:
- High-Cost Repairs: Electric vehicles have intricate electrical systems, and fixing them usually calls for specialized technicians and parts, which sends repair costs soaring.
- Small Repair Network: Many conventional repair shops are not capable of working on EVs. Oftentimes, that means repairs are done only at dealership service centers, which tend to charge premium rates.
- Battery-Related Risks: EV batteries present unique fire risks that necessitate specialized handling if there’s an accident, and that is now factored into the premium. It’s one reason your EV insurance may be higher than for a gas-powered car.
Registration and Road User Charges
Some Australian states reduce registration fees for EVs, but others have started to implement road user charges to make up for lost revenue from fuel excise, which can amount to hundreds of dollars per year for heavy drivers.
Other states, like New South Wales and South Australia, have also announced plans to bring in similar fees as part of a switch to road user charges.
Depreciation and Resale Value
Despite the fact that EV technology is rapidly evolving, older models could be losing value faster than conventional vehicles. Certain technological advances (like improved batteries), along with a growing selection of new EV models, can make older EVs seem less desirable on the used market.
And with noticeable depreciation comes the likelihood that resale values on used EVs will dip below those of ICE vehicles, which seem to retain their resale value much better. This reason alone is good enough to never drive an electric vehicle.
Longer Repair Times and Parts Availability
Because Australia has a comparatively low number of electric vehicles (EVs) relative to conventional cars, finding replacement parts can be tough and slow, especially when the part needed is special and requires it be made to fit just one model of EV.
That problem can come close to derailing an EV owner’s entire experience of going electric; especially when the part needed is central to the operation of the vehicle.
Government Policy Uncertainty
Australian government policies concerning EV incentives, taxes, and infrastructure funding are still taking shape. Some states offer direct rebates and tax incentives, but it’s unclear how stable these benefits will be over the long term.
Meanwhile, federal policy changes could result in new costs for EV owners, such as increased road usage charges or decreased subsidies.
There Are Many Reasons to Never Drive an Electric Vehicle
Even though electric vehicles offer numerous advantages, potential buyers in Australia need to look closely at some cost factors that aren’t immediately apparent. Yes, they are less expensive to run and maintain. And when you throw in some government incentives, they start to look even more attractive.
But you have to pay a pretty penny upfront to get an EV. And these cars tend not to be covered as comprehensively by insurers. Between that, a lack of charging infrastructure, and the significant lack of resale value these vehicles are showing, you start to see that buying an EV in Australia is not as cut and dried as it might seem.