Standing at the petrol pump, watching the numbers climb, most Australian drivers are doing the same quick maths:
What does this cost me in a week? A month? A year?
And increasingly, a different question follows: What if I didn’t have to fill up at all?
That’s no longer an abstract thought.
A market that has genuinely transformed
The speed of change in Australia’s EV market is easy to understate.
In 2019, electric vehicles accounted for roughly 1% of new car sales. By 2024, that figure had risen to around 11.2%, representing more than 114,000 new EVs sold in that year alone, and over 410,000 EVs now registered nationally (based on Federal Chamber of Automotive Industries and state registration data available at the time of writing).
This growth isn’t primarily ideological. It’s practical. The cars have simply become competitive.
Early EVs suffered from constrained range, sparse charging infrastructure and a limited model line-up dominated by Tesla. That market no longer exists.
- BYD has emerged as a serious volume challenger.
- Hyundai, Kia, Polestar, BMW and Mercedes-Benz have each introduced compelling electric models.
The choice now spans from sub-$40,000 hatchbacks through to luxury sedans and SUVs, with real-world ranges typically between 400 and 600 kilometres on a charge for many mainstream models.
That range figure matters because of a single data point that reframes the entire conversation.
The 40-kilometre problem that isn’t a problem
The average Australian drives around 40–50 kilometres per day. Against a 400-kilometre range, “range anxiety” – the dominant psychological barrier to EV adoption for the better part of a decade – becomes largely irrelevant for most urban and suburban drivers.
The more significant shift is behavioural.
Most EV owners charge overnight at home, effectively starting every day with a full “tank”. The petrol station disappears from the weekly routine. The car charge becomes as routine as the nightly phone charge.
For longer trips, Australia’s public charging network has expanded considerably, with fast chargers now concentrated along major highway corridors and in metropolitan centres. Infrastructure is strong and growing in metropolitan Australia, though it’s still thinner in regional and remote areas. That remains a genuine constraint for regional drivers but is largely irrelevant to the average metro commuter whose daily travel sits well within home-charging range.
The real cost question
The purchase premium is real; entry-level EVs typically cost $5,000 to $15,000 more than comparable internal combustion engine (ICE) vehicles – but total cost of ownership tells a different story.
- Electricity costs per kilometre are roughly one-third to one-quarter of petrol costs at current prices, especially for off-peak home charging or where solar is available.
- EVs have dramatically fewer moving parts: no oil changes, no timing belts, no exhaust components, no traditional automatic transmission and less wear on brakes due to regenerative braking.
The Federal Department of Infrastructure and other industry analysts suggest EV servicing and maintenance costs run around 30–40% lower than for equivalent petrol vehicles over a five-year period.
Battery longevity, once a major concern, has also proven more durable than early critics predicted. Most manufacturers now offer 8-year or 160,000-kilometre battery warranties, and real-world data from high-mileage fleets suggests degradation is generally slower than many early lab-based estimates implied.
Where the Australian tax system changes everything
The most under-appreciated factor in Australia’s EV economics is the federal government’s Electric Car Discount, introduced in 2022 and expanded in 2024.
Under current legislation, eligible EVs accessed through a novated lease are exempt from Fringe Benefits Tax (FBT), provided they meet criteria such as:
- Being a zero or low-emission vehicle (battery EV, hydrogen fuel cell or eligible plug-in hybrid)
- Being first held and used after 1 July 2022
- Falling under the luxury car tax threshold for fuel-efficient vehicles for the relevant FBT year
(These rules are subject to change, and plug-in hybrids have specific sunset dates and conditions, so employees should seek current advice or modelling.)
For employees with access to salary packaging – a large slice of the healthcare, education, government and corporate workforce – this fundamentally alters the financial equation.
A novated lease bundles the vehicle plus running costs (registration, insurance, servicing, tyres and charging electricity) into a single pre-tax salary deduction. Because those costs are paid before income tax is applied, the effective saving scales with the employee’s marginal tax rate.
For someone on the average full-time wage of approximately $98,000 (2024 ABS figures), the combined tax benefit can amount to around $5,000 to $8,000 per year compared with purchasing and running a comparable petrol vehicle privately, though the actual figure depends heavily on:
- Vehicle choice and purchase price
- Individual salary and tax position
- Exact packaging arrangement
- Employer policies and participation
The commonly cited example is that a $50,000 EV can cost roughly the same weekly out-of-pocket as a $30,000 petrol car under a novated lease, is directionally accurate in many scenarios. It’s not universal, and the comparison requires careful modelling for individual circumstances.
But the principle holds: for eligible employees, the tax treatment of EVs creates a structural cost advantage that doesn’t exist for petrol vehicles.
Drivers without access to salary packaging face a different calculation, where the higher purchase price typically requires a longer horizon to recover through savings on fuel and maintenance.
The decision is still individual
Electric vehicles won’t suit every driver.
- Rural and remote Australians
- Those without home (or reliable workplace) charging
- High-mileage tow-vehicle operators
- Buyers on tight budgets without access to salary packaging
may find the economics don’t yet quite stack up, or that convenience factors still favour a conventional vehicle today.
But for a large and growing segment of Australian drivers – suburban commuters with home charging, employees with novated lease access, and households with solar – the question is no longer whether EVs are viable.
It’s whether the timing makes sense now, or in two or three years when prices fall further and model choice expands again.
That shift in the baseline question is significant.
It’s no longer simply, “Should I switch to an EV?”
It’s “Does switching to an EV make the most sense for me?”
Want to see the numbers for your situation?
If your employer offers salary packaging, a novated lease on an EV might be far more affordable than you expect.
Paywise can model:
- How a specific EV compares to your current petrol car
- The impact on your take-home pay
- How much you could save each year with FBT-exempt EV salary packaging
If you’re ready to explore it, get in touch with the Paywise team or request an EV novated lease quote through your employer portal. A tailored cost comparison will show you whether the right time to switch might be now.