Electric Cars Expected to Cost Less than Petrol Vehicles in Three Years

A recent report by researchers from the University of Exeter in the UK reveals that electric cars are already cheaper to operate than petrol vehicles, and they are projected to be less expensive to purchase than their fossil fuel counterparts within the next three years. The study indicates that price parity for battery-electric vehicles could be achieved in as little as one year in Europe, two years in China, and three years for medium-sized cars in the US. The timeline for reaching equal pricing could potentially be accelerated if governments provide subsidies for potential buyers.

However, this research may be disheartening news for Australian drivers, as it follows the announcement that the NSW government plans to eliminate a $3000 subsidy on electric vehicles, similar to the move made by the Victorian government months earlier. The analysis, conducted by the Rocky Mountain Institute and Bezos Earth Fund, examined electric vehicle adoption in Europe, the US, China, India, and Japan.

The study found that electric cars have already become more affordable to own and operate compared to petrol and diesel cars in Europe and China, and the US is likely to experience the same trend in 2024 or 2025. Furthermore, the research predicts that a second tipping point, where electric vehicle prices match those of petrol and diesel cars, will be reached in all three regions by 2026 for small and medium-sized cars.

India is projected to achieve electric car price parity by 2027, followed by Japan in 2030. This delay in Japan is attributed to strong hybrid vehicle sales. It’s important to note that these forecasts do not account for electric vehicle subsidies. The report acknowledges that “the tipping point for the consumer will be even earlier where governments provide them.”

According to Simon Sharpe, the lead of the project’s policy impact, governments can further promote low-emission transport by implementing deadlines for petrol car sales, imposing road taxes, and expanding the network of charging stations. He emphasizes the need for ongoing commitment from governments to sustain the momentum of the electric vehicle transition.

While several Australian states and territories, including Queensland, Western Australia, South Australia, and the ACT, offer incentives for electric vehicles, the removal of subsidies in NSW and Victoria raises concerns among industry experts. Behyad Jafari, the Chief Executive of the Electric Vehicle Council, highlights the significant uptake of low-emission cars facilitated by state-based rebates and urges politicians to oppose their elimination. Jafari emphasizes that a reduction in electric vehicle adoption would result in air pollution, continued reliance on foreign oil imports, increased carbon emissions, and added financial strain on households.

Source: University of Exeter, Rocky Mountain Institute, Bezos Earth Fund, NSW Government, Victorian Government, Electric Vehicle Council