It’s one of the hottest debates unfolding around dinner tables and barbecues in Australia right now: “Should my next car be electric or petrol?”
The cost of living doesn’t seem to be getting any cheaper, with groceries alone up 21% between 2020 and 2025.1 Meanwhile, volatile prices at the pump for petrol and diesel – on the back of global uncertainty – have added fuel to the electric cars vs petrol cars conversation. Prices jumped nearly 33% in March 2026, with diesel alone surging by 41%.2
Little wonder if you’re one of the many Aussies asking themselves if an electric car might be cheaper for your lifestyle right now. The data can be persuasive: According to modelling by the Commonwealth Scientific and Industrial Research Organisation (CSIRO), households who completely transition to electric vehicles by 2030 could see long-term savings of up to $30,000 over a 20-year period, compared to those sticking with internal combustion engines.3
More Australians are plugging in to the EV trend than ever. In May 2026, an EV – the Tesla Model Y – was the top-selling vehicle in Australia for the first time.4 Nearly one in five new cars sold was electric.4
So, are electric cars better than petrol? If you’re weighing up whether an EV is right for you, in this article, we’ll cover the basic differences between an EV and a petrol car. And to help you be better positioned to decide between electric cars vs petrol cars, we’ll also compare their upfront and running costs, practicality, servicing considerations, resale value and EV car insurance – and finally, we’ll explore where hybrid vehicles fit in the mix.
What’s the difference between electric cars and petrol cars?
Chances are, your first car was powered by an internal combustion engine, fed by fuel from a liquid source such as petrol, diesel or liquified petroleum gas (LPG).5
An alternative fuel vehicle, EVs use chemical energy stored in a rechargeable battery to power an electric motor – or two.6 An EV is a zero emissions vehicle, which means there’s no tailpipe emitting CO2.6 It can be recharged either at home or with a public EV charger.6 Here are some of the reported benefits of electric cars.
EVs are smoother and quieter to drive
EVs can get up to speed quicker with greater acceleration, have better handling – which means they respond more accurately to your inputs – and are quieter than petrol cars. Regenerative braking turns the electric motor back into a generator when slowing down, capturing energy and storing it in the battery for when you accelerate again.6 This often means lifting your foot off the accelerator is typically all that’s needed to slow the car down.7
EVs are just as safe as petrol cars
In 2025, the highest-scoring car in crash testing by independent road safety body ANCAP (Australasian New Car Assessment Program) was the Tesla Model Y.8 In fact, EVs were the top performers in ANCAP 2025 safety testing in six of seven vehicle categories.8
EVs produce less CO2
When it comes to eco-friendly cars, the environmental impact of electric cars is now well known. While extracting the minerals for EV batteries is energy intensive and produces carbon – which means an EV is not fully emission-free – over the vehicle’s lifetime, emissions are significantly lower than those of an equivalent petrol or diesel car.3 Making a case for sustainability, an EV could offset the emissions from its production within two years of driving.3
Upfront costs – electric car prices vs petrol cars prices
EVs are generally pricier to buy upfront compared to petrol equivalents, but electric car prices are coming down as new models enter the market, tilting the balance for consumer preference.9
You can now get an EV for under $25,000 brand new
Whether you’re a cost-conscious household weighing up a petrol car vs an EV, or a curious EV intender who hasn’t yet committed, you’re likely wondering how much electric cars are now. The lowest electric car price in Australia as of June 2026 is the BYD Atto 1, starting at just $23,990 before on-road costs.10
Novated leasing to access EV government incentives
The upfront cost of an electric car can be lower with a novated lease, taking advantage of the government’s Fringe Benefits Tax (FBT) exemption for new vehicles valued up to $89,332.11 Depending on your personal financial circumstances, driving an EV on a novated lease – compared to a petrol car – could save you $3,000 to $5,000 each year.11 Although, if this is an option for you, don’t think about it for too long as the government is winding back its “EV Discount” over the coming years.12
Running costs – EV vs petrol car in Australia
Are electric cars worth it in Australia? For most Australians, an EV will likely be cheaper to run than a petrol car. In fact, EV drivers could save up to 70% on fuel and 40% on servicing costs, compared to an equivalent petrol or diesel vehicle.3 In real terms, that’s an estimated $1,600 a year on average.5
Charging at home is cheaper than an EV charging station
Typically, it costs more to charge an EV at a public recharging station than at home.9 The cost of public EV charging stations varies, generally between 40c/kWh and 80c/kWh.13 For those charging at home, using rooftop solar may be the cheapest way to charge your EV during the day,5 and some energy providers offer EV electricity plans with off-peak rates as low as 4.5c/kWh between midnight and 6am.14
A home powerpoint could suit most EV owners
If you drive less than 150 kilometres each day, you might not need to install an expensive homecharger – a regular 240Vt outlet should generally do the job overnight.15 A typical passenger EV driven 12,000 kilometres each year will have an energy consumption of about 2,000kWh of electricity.16
Running costs for petrol cars
While the most fuel-efficient cars in Australia may use less, new passenger vehicles sold in Australia use on average 6.9L/100km of petrol.17 As of June 18, 2026, the average price of petrol in Australia’s five largest cities was $1.70 per litre.18
Maintenance and servicing considerations
It’s fairly simple – an EV requires less servicing and maintenance than a petrol car. That’s because an EV can have as few as 17 moving parts compared to more than 200 in a typical combustion vehicle.15 Regenerative braking also means that your brakes don’t need replacing as often.15
That all translates to real-world cheaper servicing.
For example, the Hyundai Kona comes in both petrol and electric versions. A five-year prepaid servicing plan costs $2,226 for the petrol model with 12 months or 15,000 kilometres service intervals.19 The same costs $1,492 for the electric model, which requires servicing exactly half as often – which also means fewer visits to the dealer.19
Practicality in Australia
Cost is only part of the picture when comparing electric cars vs petrol cars. Australia’s unique driving conditions, relative to other EV markets such as Europe, can also come into play when determining which vehicle type is the better fit for you.
While EVs may be an excellent option for urban commuters and households with predictable driving habits, Australia’s vast distances, regional road networks and still-developing charging infrastructure might make petrol or hybrid vehicles a more practical choice for some drivers.
“EVs can require a bit of a mindset shift compared to a petrol vehicle,” says Nathan Johnson, Brand Director Commercial Vehicles at Volkswagen Australia.
“Think about how you drive on a daily basis.”
Consider your lifestyle
Many EVs can travel more than 300 kilometres on a single charge, which means they’ll easily suit the majority of Australians who travel the average of between 33 and 38 kilometres per day.9
“If you’re mostly driving your kids to school every day from home and back, or commuting within the city for work, and that’s all you’re doing, an EV is the perfect car for you because you should never have range anxiety, and you could be able to top it up [with a normal powerpoint],” says Johnson.
“But if you like the freedom of knowing you can jump in your car on a Saturday morning and head in whatever direction the wind takes you, a petrol car – and the well-established national network of petrol stations – might still be for you,” Johnson adds.
Venturing beyond capital cities in an EV may require prior planning – the Australian Government has a webpage devoted to completing a basic road trip in an EV.
Road trip public EV recharging can be a hassle
The best electric cars in Australia tend to have longer battery ranges, which means fewer stops for charging. But during the 2026 Easter holidays, some EV owners encountered queues of up to 20 cars waiting to access one of 12 EV chargers.20
“Having [previously owned] an EV myself, I found huge benefits from it, but then I also saw some of the challenges that people had, especially when I was driving to Canberra or down the coast where the infrastructure wasn’t set up to support day trips,” says Johnson.
Where will you be recharging?
Getting the best out of your new EV will typically mean recharging at home or at work; and indeed, over 80% of EV drivers do exactly that.21 That’s because lack of access to charging stations remains a key barrier for motorists. Australia currently has one of the lowest EV-to-charger ratios in the world.22 There are approximately 8,100 service stations in Australia,23 but just 4,192 public EV charging stations, of which only 1,272 are fast-charging.24 Topping up a petrol car at any of those service stations takes minutes, but if you manage to access one of those fast-charging points, depending on the charger, recharging an EV can take around 30 minutes.25
Insurance costs – electric vs petrol cars
If you’re getting closer to making the shift from combustion to an EV, you might be wondering how much car insurance for an electric car is. Will it be pricier? Right now, yes, typically electric car insurance costs more in Australia than coverage for petrol cars or hybrids.26
The average comprehensive insurance premium for an EV was $2,545, as of March 2026, compared to $1,702 for a petrol vehicle. That’s 40% more, or an extra $843 per year.26
Even after a year of ownership, EVs were still much pricier to insure than petrol equivalents – $2,458 versus $1,949. Owners of EVs between one and four years old paid 22-27% more for insurance than owners of comparable petrol cars, according to CHOICE.26
There are a couple of specific factors that might contribute to the cost of your electric car insurance, such as higher repair costs. The EV repair network is also still establishing itself26 and can mean it takes longer to get your EV fixed, driving up secondary costs such as a hire car.
EVs are also more likely to be manufactured with more advanced, and therefore more expensive components.
The battery pack can be another big factor; if it gets damaged in a crash, replacing it can be a really expensive exercise.27
And while it’s certainly not unique to electric vehicles, modern EVs also usually come with Advanced Driver Assistance Systems (ADAS) embedded in high-impact zones such as bumpers and windscreens – so even a minor fender bender can require expensive technical repairs and precise recalibration.27
However, when insurers calculate your premium, the type of fuel or energy your car uses is only one part of the equation.
“Your car insurance quote, whether it’s for an EV, a hybrid or combustion vehicle, will also generally depend on factors such as your age and driving experience, how you actually use your car, and where the car is parked overnight,” says Marni Jackson, Youi’s Head of Product – Vehicle and Lifestyle.
Youi’s car insurance by make and model tool could help give you a better understanding of how much car insurance might cost for your particular vehicle, including any EVs you might be thinking of purchasing.
Resale value
For all the talk of “free” fuel with owning an EV, depreciation remains the single largest cost of owning a car.28 Here are some EV resale considerations you may wish to keep in mind.
EV resale values are still generally lower than petrol cars
While EVs are becoming increasingly popular, the resale values of these vehicles are still being established. However, as markets mature, EV resale values are improving,29 according to the Australian Automotive Dealer Association – and values of some second-hand EVs have even lifted slightly since the start of the 2026 fuel crisis.30 A two-year-old EV is only retaining about 65% of its original value compared to the average of 85% for the rest of the new passenger vehicle market.29 At five years old, that falls to 42% compared to 60-70% for the general new passenger vehicle market.29
EV battery life is proving better than expected
Despite some common misconceptions, EV batteries are increasingly expected to last 15 to 20 years, or even longer – far beyond the eight-year battery warranties typically offered with new models.29 In fact, EV batteries can retain 80-95% capacity after many years of use, are still in good condition for up to 200,000 kilometres, and are outlasting vehicle bodies.29 When it comes to selling a used EV, battery health checks are becoming more common and can help give confidence to any buyers looking at your car.31
Where do hybrid cars fit in?
Often a bridge option for uncertain buyers, a hybrid car is one that runs on both petrol or diesel, and electric power.32 In terms of prices, hybrids generally cost more than non-hybrid models but are still a bit more affordable than full EVs.32
A plug-in hybrid could offer the best of both worlds
You might not have to pick between a hybrid car and an electric car – you could consider a plug-in hybrid electric vehicle (PHEV). A PHEV combines electric power with petrol or diesel, like a normal hybrid, but lets you recharge the battery using a standard power outlet.33 Most PHEVs offer between 50 to 100 kilometres of EV-only range.34 When the battery depletes, the combustion engine simply takes over to propel the car.
Whether you end up driving a petrol, hybrid, plug-in hybrid or full EV, it's worth considering ongoing running costs such as fuel, charging and car insurance as part of your decision. Consider starting a quote with Youi to compare insurance costs for the cars on your shortlist.
1 Source: The Guardian – In Australia’s cost-of-living-crisis, even lawyers are forced to rely on food banks, December 2025
2 Source: Australian Bureau of Statistics – Consumer Price Index, Australia, March 2026
3 Source: Australian Government – Electric vehicle facts, n.d.
4 Source: Drive – Australian new-car sales in May 2026: Tesla Model Y is first EV to top charts, June 2026
5 Source: Solar Victoria – Is an electric vehicle cheaper to own than a petrol-driven car?, September 2025
6 Source: Australian Government – Types of electric vehicles, n.d.
7 Source: Transport NSW – Why buy an electric vehicle? 2026
8 Source: ANCAP – ANCAP reveals outstanding safety performers for 2025, January 2026
9 Source: Australian Government Green Vehicle Guide – Electric vehicles, n.d.
10 Source: CarExpert – 2026 CarExpert Choice winner: Best Affordable EV, June 2026
11 Source: Electric Vehicle Council – The Electric Car Discount, n.d.
12 Source: ABC News – Electric vehicle tax discount to be wound back, May 2026
13 Source: NSW Government – Electric vehicle fast charging stations, n.d.
14 Source: OVO Energy – The EV Plan, n.d.
15 Source: Qld Government – Benefits of zero emission electric vehicles, January 2022
16 Source: Electric Vehicle Council – How much electricity does charging an electric vehicle consume compared to typical household usage? n.d.
17 Source: Climate Council – Aussies would pay less at the petrol pump with clean, efficient cars like those sold overseas, February 2024
18 Source: Australian Institute of Petroleum– National retail petrol prices, June 2026
19 Source: Hyundai Australia – Car Price Calculator (Kona), 2026
20 Source: ABC News – Long queues at EV chargers highlight gaps in NSW infrastructure, April 2026
21 Source: Electric Vehicle Council – Is there enough charging infrastructure to support electric vehicles in Australia? n.d.
22 Source: carsales – Australia’s EV-to-charger ratio among worst in the world, April 2026
23 Source: Australasian Convenience and Petroleum Marketers Association – Membership, n.d.
24 Source: Electric Vehicle Council – Australia makes gains in EV uptake but faces steep road ahead, report finds, October 2025
25 Source: ACT Government – Sustainable Household Scheme, Frequently Asked Questions Households, November 2025
26 Source: CHOICE – The cost of insuring electric vehicles, March 2026
27 Source: Insurance Council of Australia, March 2025
28 Source: Consumer Affairs Victoria – Vehicle running costs and depreciation, June 2025
29 Source: Parliament of Victoria – Misinformation slowing EV uptake, inquiry finds, June 2026
30 Source: The Guardian – ‘Doesn’t make sense to hold on to a combustion engine’: used EV prices rise as Australia’s fuel crisis hits, April 2026
31 Source: ACT Government – Electric vehicles for beginners, n.d.
32 Source: Australian Government Green Vehicle Guide – Hybrid vehicles, n.d.
33 Source: Australian Government Green Vehicle Guide – Types of electric vehicles explained, n.d.
34 Source: carsales – What to know before buying a plug-in hybrid (PHEV) in Australia, May 2026
