When it comes to buying a new car, the sticker price is often the first—and sometimes only—number people focus on. However, the true cost of owning a vehicle extends far beyond the initial purchase. The long-term expenses, collectively known as the Total Cost of Ownership (TCO), are where the financial battle between electric cars (EVs) and traditional petrol cars is truly fought.
So, which one is actually cheaper over a span of five, eight, or even ten years? Let's break down the key cost factors.
Petrol Car: Generally, petrol cars have a lower initial purchase price. The technology is mature, manufacturing is scaled, and there is a vast range of models available at every price point.
Electric Car: EVs typically have a higher sticker price. This is largely due to the cost of the battery, which is the most expensive component of the car. However, this gap is narrowing every year as battery technology improves and production increases. Furthermore, many governments offer significant tax credits, rebates, and incentives to encourage EV adoption, which can dramatically lower the effective purchase price.
Winner (Upfront Cost): Petrol Car (but the gap is closing thanks to incentives).
This is where the electric car begins to shine.
Petrol Car: The cost of petrol is volatile and consistently trends upward over the long term. Filling a tank can be a significant weekly expense, easily amounting to thousands of dollars per year depending on your mileage and local fuel prices.
Electric Car: Charging an EV is substantially cheaper than buying petrol. The majority of EV owners charge their cars at home overnight, benefiting from lower off-peak electricity rates. The cost per mile is a fraction of what it is for a petrol-powered equivalent. While public fast-charging stations are more expensive than home charging, they are still typically cheaper than a full tank of gas.
Winner (Fueling): Electric Car (by a large margin).
The mechanical simplicity of an electric car leads to major long-term savings.
Petrol Car: Internal Combustion Engines (ICE) are complex machines with hundreds of moving parts. They require regular maintenance, including:
These routine services and potential repairs add up to a considerable amount over the car's lifetime.
Electric Car: EVs have no engine, no oil, no spark plugs, and no exhaust system. Their maintenance needs are minimal. The primary service items are tyres, brakes, and cabin air filters. Even brakes tend to last longer on an EV due to "regenerative braking," where the electric motor slows the car down and recharges the battery, reducing wear on the brake pads. The main concern for potential buyers is battery longevity. However, most manufacturers offer an 8 to 10-year warranty on the battery, and complete failures are rare.
Winner (Maintenance): Electric Car.
This category can be more of a mixed bag and depends heavily on your location.
Insurance: In some regions, EVs can be slightly more expensive to insure. This is because their specialized components and higher purchase price can lead to higher repair costs in the event of an accident. However, as EVs become more common, this price difference is diminishing. It's crucial to shop around for quotes.
Taxes: Many governments incentivize EV ownership with lower annual road taxes, exemption from congestion charges in cities, and other fiscal benefits. Petrol cars, particularly older or less efficient models, often face higher tax burdens.
Winner (Taxes & Insurance): Varies by location, but often leans in favour of Electric Cars due to tax benefits.
Depreciation is the silent cost that affects every car owner.
Petrol Car: The resale value of petrol cars is well-understood but is facing future uncertainty. As more countries announce plans to phase out new petrol car sales, demand for used models is expected to decline, potentially accelerating their depreciation.
Electric Car: Early EVs suffered from poor resale value due to rapidly evolving technology and battery degradation concerns. Today, the story has changed. High demand, longer-range models, and robust battery warranties have led to many popular EVs holding their value exceptionally well—in some cases, even better than their petrol counterparts.
Winner (Resale Value): Increasingly, the Electric Car.
While a petrol car is often cheaper to buy off the forecourt, an electric car almost always proves to be the more economical choice over the long term.
The "break-even point"—the moment when the savings from fuel and maintenance have completely offset the higher initial purchase price—typically occurs within 2 to 4 years of ownership, depending on the models being compared and how much you drive.
The longer you own an electric car, the more you save. The combination of drastically lower "fuel" costs, minimal maintenance, and potential tax advantages creates a compelling financial case that is only getting stronger as technology advances and prices fall.
