"EVs are cheaper to run" is one of those lines everyone repeats. Sometimes it's true. Sometimes the sticker price, the depreciation, and how you actually charge quietly wipe out the fuel savings. DriveTruth doesn't sell cars, loans, or leases, so here's the honest version: whether an EV saves you money depends on your numbers, not the headline.
Where EVs genuinely win
The running-cost gap is real. Electricity per kilometre is usually far cheaper than petrol, especially if you charge at home overnight on a low tariff or off your own solar. EVs also have fewer moving parts, so there's no oil to change, and servicing tends to be lighter.
Plug your own kilometres, fuel price, and electricity rate into the EV vs petrol calculator and you'll often see hundreds to a few thousand dollars a year in running-cost difference. The exact gap depends entirely on your driving and your tariff, so treat any headline number with suspicion and run your own. That's the part that's mostly working in an EV's favour.
Where the savings quietly leak away
Running cost is only one line in the budget. The full picture, the one that actually decides whether you're better off, has three parts:
- Purchase price and depreciation. EVs often cost more up front, and how well a given model holds its value varies a lot. Depreciation is usually the biggest single cost of owning any car.
- Charging reality. Home charging is cheap. Relying on public fast-chargers is a different story and can narrow the gap toward petrol prices.
- Finance. If you're borrowing more to buy the EV, the extra interest eats into the fuel savings.
This is why running cost alone can mislead. To compare fairly, look at total cost of ownership, purchase plus depreciation plus running plus finance, side by side. The total cost of ownership calculator lets you do exactly that across two cars so you're comparing the whole cost, not just the petrol pump.
EV vs Petrol Calculator
See the per-kilometre and annual difference for your own driving.
The novated lease angle
For EVs bought through salary packaging, there's a genuine tax concession that can change the maths, sometimes dramatically. Eligible battery EVs can be exempt from Fringe Benefits Tax (FBT), which is what lets you pay for the car and its running costs largely from pre-tax salary. This is often where an EV genuinely pulls ahead for people on the right income and the right car.
The catch is the conditions. The FBT exemption only applies while the car's value sits under the Luxury Car Tax threshold for fuel-efficient vehicles, and plug-in hybrids stopped qualifying for new arrangements from 1 April 2025. These rules and thresholds are set by policy and can shift, so don't treat any of it as permanent. Check whether your car sits under the cap with the Luxury Car Tax calculator, confirm the current EV concession rules with the ATO and your employer's packaging provider before you count on them, and run your true net position through the novated lease calculator so you're comparing it honestly against a plain car loan rather than against nothing.
A quick sanity checklist
- Can you charge at home most of the time? If not, recalculate at public-charging rates.
- How many kilometres a year do you really drive? Low mileage shrinks fuel savings.
- How long will you keep the car? Depreciation and any lease concession both depend on this.
- Are you borrowing more for the EV? Add that interest to the comparison.
- Is the car under the fuel-efficient LCT threshold? Above it, the FBT exemption doesn't apply.
Running Costs (TCO) Calculator
Purchase, depreciation, running and finance for two cars, side by side.
So, will you actually save?
Often yes, if you drive a fair bit, charge at home, keep the car for a while, and especially if an eligible EV novated lease applies. Often no, or barely, if you drive little, lean on public charging, borrow heavily, or pick a model that depreciates hard. There's no universal answer, only your answer. Run your real numbers through the calculators above before you decide.
Frequently asked questions
Are EVs always cheaper to run than petrol cars?
Per kilometre, usually yes, especially if you charge at home on a low tariff or solar. But running cost isn't the whole story. A higher purchase price, faster depreciation, or heavier finance can offset those savings. Compare total cost of ownership, not just fuel, before deciding.
Does a novated lease make an EV cheaper?
It can, sometimes significantly, because eligible battery EVs can be exempt from Fringe Benefits Tax when salary-packaged. But the exemption only applies while the car sits under the Luxury Car Tax threshold for fuel-efficient vehicles, and plug-in hybrids stopped qualifying for new arrangements from 1 April 2025. Confirm the current position with the ATO and your packaging provider, and run your true net saving against a normal car loan rather than assuming.
What's the biggest hidden cost when switching to an EV?
Depreciation. It's usually the largest cost of owning any car, and it's easy to focus on fuel savings while a pricier EV quietly loses more value. If you rely on public fast-charging instead of home charging, that also narrows the running-cost gap considerably.
How do I work out if an EV saves me money?
Start with the EV vs petrol calculator for running costs, then put both cars through the total cost of ownership calculator so purchase, depreciation, running and finance are all included. If you're considering salary packaging, check the car against the Luxury Car Tax threshold and use the novated lease calculator to compare the true net position.
General information only — not financial, tax or legal advice. Figures change; confirm with the ATO, your state revenue office and a licensed adviser, and use the calculators for your own numbers.