Electric car sales are rising in Australia but the uptake is behind other markets. When will they be more affordable?

Kobus Terblanche’s long daily commute becomes almost enjoyable when he calculates he is saving $25 a day on petrol.

He made the switch to an electric Nissan Leaf in September when he realized the cost of running it would outweigh the steep up-front price.

He has saved about $3,000 in fuel on his 200-kilometre round trip between Brisbane and the Sunshine Coast in the six months since.

“It costs me $7.20 to charge the car, in electricity costs, in a similar-sized 2-litre petrol car that drive would be costing me $32,” he said.

“I sort of dreamed about the day that they would create a car where we don’t hear that engine noise all the time, or feel the vibrations, and this is it.

“You feel like you’re in new technology.”

Kobus Terblanche smiling in his electric car in April 2022
Kobus Terblanche is saving on running costs with his new car.(Supplied)

Only 0.16 per cent, or 6,000, of all cars registered in Queensland are electric, according to state government data.

Despite the slow uptake, the industry is about to undergo a significant shift, which could sway some consumers.

The total cost of ownership (TCO), which takes in up-front and running costs, will reach parity with the most affordable traditional cars for the first time in Australia within the next 12 to 24 months, Origin Energy’s general manager for corporate strategy and e-mobility Chau Le said.

She said the tipping point has been brought forward because of the recent high petrol prices.

Mrs Le said consumers who rack-up more than 25,000km per year are expected to reach that parity point first.

The Queensland government estimates a lower-end zero emission car costs as low as $3 per 100km to operate, compared to $14.25 for a four-cylinder internal combustion engine one.

The Electric Vehicle Council estimated service and repair costs to be 70 per cent cheaper per kilometer than traditional cars.

A woman plugs into an electric vehicle.A woman plugs into an electric vehicle.
Ms Le says the total cost of ownership (TCO) will reach parity with the most affordable traditional cars within the next 12 to 24 months.(Supplied)

That was factored in by Mr. Terblanche, who now only has to service his car every 30,000 kilometres.

“The only thing can go wrong, is that you forget to switch it on to charge,” he said.

“I reckon you could do a million kilometers in the car and it wouldn’t wear out, there’s very few parts that will wear out.”

The Boston Consulting Group (BCG), which analyzes market trends, has identified that some luxury electric cars have already reached parity for TCO with similar traditional cars.

Headshot of James Tilbury from the Boston Consulting GroupHeadshot of James Tilbury from the Boston Consulting Group
James Tilbury from the Boston Consulting Group.(Supplied: BCG)

Smaller SUVs would also reach parity point soon, BCG’s climate specialist James Tilbury said.

When will up-front prices come down?

Despite long-term gains, the initial, up-front cost of an electric car has been hard to get past for many.

That is not about to change in the short term.

James Tilbury in an electric car.James Tilbury in an electric car.
James Tilbury in an electric car.(Supplied)

There are about 38 options available in Australia, compared to 400 worldwide, and just five of those are under $60,000, data from the BCG showed.

A small electric car was estimated to cost an extra $12,000 compared to petrol and diesel cars, and $25,000 more for SUVs, Mr Tilbury said.

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