For the past few years, the case for going electric was often framed around one thing: petrol prices. And while fuel costs have been volatile, the real story behind Australia’s EV boom is more interesting and more financially compelling than pump prices alone.
Australian EV sales rose 38% in 2025, with more than 157,000 electric vehicles sold nationally. In the first quarter of 2026, that growth has continued to double year-on-year. Australians aren’t just reacting to petrol anxiety. They’re doing the numbers – on running costs, tax incentives, and loan structures – and finding that EVs increasingly make financial sense on their own terms.
Here’s what those numbers actually look like.
The Running Cost Gap Is Significant
The clearest financial case for EVs sits in the cost per kilometre to drive.
A typical petrol sedan consuming around 7–8 litres per 100km costs roughly 14–17 cents per kilometre in fuel at current prices. A comparable EV, charged at home on a standard residential electricity tariff, costs around 4–6 cents per kilometre. If you’re on an off-peak overnight rate, that drops to 2–3 cents. And if you have rooftop solar, it can be well under 1 cent.
Over a typical 15,000km per year, that running cost gap alone can save $1,500 to $2,000 annually before you factor in anything else.
Servicing is the other side of the ledger. EVs have significantly fewer moving parts — no oil changes, less brake wear thanks to regenerative braking, and no transmission servicing. Independent analysis suggests EVs cost $500–$1,000 less per year to maintain than equivalent petrol vehicles.
Add it up across five years, and the total cost of ownership for a mainstream EV like a Tesla Model Y or BYD Seal can be $8,000–$18,000 less than a comparable petrol SUV when fuel, servicing, tyres, insurance, and depreciation are all included.
The Upfront Cost Is Still a Real Consideration
EVs typically carry a higher sticker price than equivalent petrol models. Entry-level options now start from around $40,000 drive-away, with mid-range family EVs sitting in the $55,000–$80,000 range.
This is where financing matters and where structuring your car loan correctly can make a meaningful difference to what you actually pay each month and over the life of the loan.
If you’re comparing an EV at $65,000 versus a petrol equivalent at $48,000, the monthly repayments will look different on paper. But those repayments need to be weighed against the fuel and servicing savings you’ll realise each month. In many cases, the net out-of-pocket cost is similar or lower for the EV when running costs are factored in.
Our car loan calculator is a good starting point for comparing repayments across different purchase prices and loan terms.
The FBT Exemption: A Major Incentive Worth Understanding
For anyone who receives a salary – particularly those earning between $80,000 and $180,000 – the federal government’s Electric Car Discount is one of the most powerful financial levers available right now.
Introduced under the Treasury Laws Amendment (Electric Car Discount) Act 2022, the scheme exempts eligible battery electric vehicles from Fringe Benefits Tax when provided through a novated lease or employer car arrangement. In practical terms, this means the vehicle’s lease repayments and associated running costs – fuel (electricity), registration, insurance, and servicing – can all be funded from your pre-tax income, with no offsetting post-tax contribution required.
The ATO estimates this can save employees earning $120,000 per year upwards of $9,000–$14,000 annually, depending on vehicle and lease structure.
A few key points to note for 2026:
The exemption applies to battery electric vehicles (BEVs) and hydrogen fuel cell vehicles priced below the luxury car tax threshold of $91,387. From 1 April 2025, plug-in hybrid vehicles (PHEVs) are no longer eligible for new arrangements under the exemption. And in May 2026, the government announced a phased wind-down of the full exemption – from 1 April 2027, EVs priced between $75,000 and $91,387 will receive a 25% FBT discount rather than full exemption, with further changes from 2029.
If you’re considering an EV through salary packaging, acting before the April 2027 change date may be worth exploring with your employer or a financial adviser.
How EV Car Loans Work
Whether you’re buying outright, through a novated lease, or with a straightforward car loan, understanding your financing structure matters.
For most buyers financing an EV privately, the process is similar to any other car loan – you borrow against the vehicle’s value, set a loan term (typically 3–7 years), and make regular repayments. Interest rates, loan terms, and lender appetite vary, so comparing options across multiple lenders is worth doing before committing.
A few EV-specific factors worth discussing with a broker:
Balloon payments. Some lenders offer lower monthly repayments with a larger lump sum due at the end of the loan. This can suit buyers who plan to upgrade or refinance at the end of the term – but it’s worth modelling what you’ll owe against what the car will be worth.
Depreciation. Early EV models lost value quickly. The market has stabilised for mainstream brands, but rapid manufacturer price cuts can still affect used values. This matters if you’re planning to sell or refinance mid-loan.
Charging setup costs. A home wall charger typically costs $1,000–$2,000 installed. If this is part of your decision, it can sometimes be included in a personal loan or asset finance package – worth asking about.
At Ingram Financial, we work across a broad panel of lenders to find car loan options suited to your situation – whether that’s a competitive rate on a straightforward EV purchase or a structure that works alongside a novated lease arrangement.
Is an EV Right for You Right Now?
The honest answer is: it depends on your situation, not on what petrol is doing this week.
EVs make the most financial sense for people who: drive at least 12,000–15,000km per year; have access to home charging (a garage or dedicated parking); can benefit from the FBT exemption through salary packaging; and are planning to own the vehicle for at least 3–5 years to realise the running cost savings.
They’re harder to justify financially for people in apartments without charging access, those who do very low annual kilometres, or anyone who needs a vehicle category – like a workhorse ute – where EV options are still limited or carry a significant price premium.
There’s no single right answer. But the question is worth working through properly, with someone who can look at your borrowing capacity, loan structure, and the full cost picture alongside you.
Frequently Asked Questions
Over a 5-year ownership period driving around 15,000km per year, a mainstream EV is typically $8,000–$18,000 cheaper to own than a comparable petrol SUV when you include fuel, servicing, and depreciation. The upfront price is usually higher, so the savings are realised over time through lower running costs.
Entry-level battery electric vehicles are available from around $40,000 drive-away, with models from BYD and MG among the most accessible. The range of options under $60,000 has grown significantly over the past two years.
Yes. EVs are financed through standard car loans, novated leases, or asset finance arrangements. Loan terms, rates, and structures vary between lenders — speaking to a broker who can compare options across multiple lenders is the most efficient way to find the right fit.
The federal government’s Electric Car Discount exempts eligible battery EVs from Fringe Benefits Tax when provided through a novated lease or company car arrangement. This allows the vehicle’s cost — including running expenses — to be funded from pre-tax salary, which can save eligible employees $9,000–$14,000 per year. The full exemption applies to EVs under $75,000 until April 2027, when phased changes begin.
Petrol prices are one factor, but they’re not the deciding one. The case for EVs in Australia rests on lower running costs, reduced servicing, federal tax incentives, and growing vehicle choice — all of which exist regardless of where petrol sits per litre on any given week.
Thinking About Financing an EV?
If you’re weighing up an EV purchase, it’s worth looking at the full picture – not just the sticker price or the petrol savings, but how the loan structure, the FBT implications, and your personal driving habits all interact.
At Ingram Financial, we help clients understand their borrowing capacity, compare loan options, and structure finance that suits their situation over the long term. Whether you’re buying your first EV or upgrading from a petrol vehicle, we’re happy to talk through the options.
Use our car loan calculator to get a sense of repayments, or get in touch to speak with Shannon directly.
Need some help?
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