For a country our size, we have a lot of cars on the road. Te Manatū | Ministry of Transport reported that in 2020, there were around 4 million registered light vehicles(external link) in Aotearoa New Zealand – that includes cars, vans, utes, and SUVs – and 97% were petrol or diesel.
That's one of the highest rates of vehicle ownership in the world.
Cars, carbon emissions, and costs
With most of the cars on our roads being petrol or diesel, it follows that almost half of New Zealand's energy-related emissions come from transport. In fact, 37% of a New Zealand household's carbon footprint is transport related, on average1. There's plenty we can do to cut down those emissions, like walking, biking, or catching public transport. Another high impact way to reduce transport emissions is by switching to electric vehicles.
Many New Zealanders are interested in the possibility of switching to electric, but until now, the purchase price has frequently been a sticking point. The Government's Clean Car Discount(external link) has made that a little easier, with a rebate of up to $8,625 for new EVs under $80,000 and up to $3,450 for used EVs being registered in New Zealand for the first time.
With interest increasing in electric vehicles, we've looked at how they stack up against petrol alternatives when it comes to cost, using the Gen Less Total Cost of Ownership Calculator.
What is total cost of ownership?
While the purchase price is one thing to consider when looking at buying a car, it’s also important to look at the total cost of owning an EV, compared to a petrol (or diesel) vehicle. Total cost of ownership is a calculation that adds up all the costs related to buying and operating the vehicle, and then subtracts the residual value of the vehicle (the price it can be sold for).
To make it easy, we pulled together four commonly available EVs and compared them to similar petrol cars. The calculator is primarily designed for business use, so fuel and electricity costs exclude GST. You can adjust the cost variables in the calculator to suit your circumstances, like the price of electricity you pay or the cost of fuel at your nearest petrol station. We based the calculations on five years of ownership.
How the costs stack up
We found that the total cost of owning an EV is significantly less than owning a petrol car. The average total cost of ownership for the four EVs was 67.5% of the total cost of owning the petrol alternatives, at $36,772 for the EVs compared to $54,473 for the petrol cars.
The average electricity cost per 100km for the EVs was $2.43 (or $2.79 including GST) while the average fuel cost per 100km was $18.02 (or $20.72 including GST) for the petrol vehicles, based on Unleaded 91. The fuel price is based on the national average pump price, but you can change this price in the calculator to reflect what you're paying.
The resale price
The EVs we looked at have a higher residual value after five years of ownership, whereas the petrol vehicles generally lost value faster.
After five years, the four EVs can be expected to sell for, on average, 50% of their original purchase price. The petrol cars can be expected to sell for, on average, 43% of their original purchase price.
What about range?
Some people looking at buying an EV might feel a bit of ‘range anxiety’ and worry the car won’t go the distance, but looking at the four EVs, that’s not a cause for concern. The average travel range for the EVs we looked at was over 300km on a full charge. Given the average length of a car trip in New Zealand is less than 10km, that range will cover day-to-day driving needs for the vast majority of people and give plenty of scope for those longer trips.
EVs at the higher end are also now typically reaching 500km with advances in battery technology, and there are now EV fast chargers every 75km across almost all New Zealand’s state highway network.
EVs and emissions
While EVs produce zero emissions, we also need to look at the electricity that powers them. EVs are well suited to New Zealand because we have a mostly renewable electricity system. Renewable electricity makes up around 80% of our supply, and total electricity generation accounts for only around 4% of our carbon emissions.
When you factor that into a car, EVs produce almost 80% less CO2 emissions than petrol or diesel vehicles, and 60% less CO2 emissions across their lifecycle2. Even if there’s an increase in non-renewable electricity generation, EVs will still have a lower carbon footprint because the majority of our electricity is still renewable, whereas petrol and diesel are always 100% non-renewable.
It's a good time for EVs
With the increase in petrol and diesel costs, combined with the improvement in EV technology, the roll-out of chargers across New Zealand, more choices in the market, and government policy supporting their uptake, the outlook for EVs has never been better.