EV vs Petrol Total Cost Comparison — Is an Electric Car Cheaper in New Zealand?

The most significant ongoing cost difference between an EV and a petrol vehicle is the fuel cost. Electricity is substantially cheaper per kilometre than petrol in almost every scenario.

An EV charged at home on a standard rate saves substantially per year compared with a medium petrol car. Against a large SUV, the saving is even greater. Over five years, fuel savings alone can amount to thousands of dollars.

Fuel savings compound over the years of ownership. The table below shows cumulative savings for an EV charged at home on a standard rate compared with a medium petrol car.

Over ten years, the fuel saving alone is substantial. If the EV is charged on an off peak tariff, the saving rises even further.

EVs have significantly fewer moving parts than petrol vehicles. There is no engine oil to change, no spark plugs, no timing belt, no exhaust system and no traditional transmission. This translates to lower servicing costs over the life of the vehicle.

Routine EV servicing typically includes brake fluid replacement, cabin air filter changes, tyre rotation and multi-point safety checks. Brake pad wear is also reduced because regenerative braking handles much of the deceleration, meaning the physical brakes are used less.

As a rough guide, annual servicing for an EV tends to be noticeably cheaper than for a petrol vehicle, though the exact amount varies by manufacturer and service provider. The saving is modest compared with the fuel cost difference but adds to the total cost advantage over time.

EV tyres tend to wear slightly faster than petrol vehicle tyres for two reasons: the extra weight of the battery and the instant torque of the electric motor, which can increase wear on driven wheels. Some EV owners find they replace tyres 10 to 20 percent more frequently than with a petrol car, though this varies with driving style.

EV-specific tyres are available from most major tyre brands. These are designed for lower rolling resistance and reduced road noise, which helps with efficiency and cabin comfort. They may cost slightly more per tyre but the difference is not dramatic. Overall, tyre cost is a small factor in the total cost comparison and does not offset the fuel saving.

Insurance premiums for EVs have historically been somewhat higher than for equivalent petrol vehicles. This is partly because EVs tend to have higher purchase prices and repair costs — battery and electrical component repairs require specialist skills and parts.

However, the gap has been narrowing as the EV market grows, insurers accumulate more claims data and the repair network expands. Competition among insurers for EV customers has also increased. The difference in annual premiums varies by vehicle, location and insurer, but it is worth shopping around and comparing quotes specifically for the EV model you are considering.

In New Zealand, petrol vehicles contribute to road funding through fuel excise duty built into the pump price. Electric vehicles buy no petrol, so they contribute nothing that way, and for years they were exempt from the alternative — road user charges — while the fleet was small.

That exemption expired on 1 April 2024. Light EVs now pay RUC at $76 per 1,000 km, bought in advance in blocks of distance. Plug-in hybrids pay a reduced rate, because they buy some petrol and therefore pay some excise as well. Diesel vehicles have always paid RUC, at the same rate as a light EV.

For a total cost comparison this is a material line, not a footnote. At 7.6 cents per kilometre it is comparable to the electricity itself on a cheap overnight tariff, and because it is charged on distance rather than energy it does not fall when you charge more cleverly. An EV is still cheaper to run than an equivalent petrol car for most drivers, but the margin is narrower than the fuel-only figures alone suggest. The road user charges calculator works it through at your own annual distance.

Whether a national road user charge for EVs will be introduced at the federal level remains an open question. If one is introduced in the future, it would add to the annual running cost — but at the rates previously proposed (2 to 3 cents per kilometre), the fuel saving would still more than cover the charge in most scenarios.

Bringing together fuel and servicing gives a more complete picture of the annual running cost difference. This comparison uses a medium EV charged at home on a standard rate versus a medium petrol car.

Even including servicing, the EV is substantially cheaper per year in total running costs. Over five years, those savings make a meaningful contribution towards offsetting any purchase price difference.

The comparison tables on this page use default values for a medium EV and petrol car. To see results based on your specific vehicle and electricity rate, select your vehicle and set your rates in the My EV panel — the tables update automatically.

EVs typically have a higher upfront purchase price than comparable petrol vehicles, though the gap has been narrowing. The point at which the lower running costs offset the higher purchase price — the break-even point — depends on the price difference between the two vehicles, how far you drive and your electricity rate.

Smaller price gap

If the EV costs $5,000 more than the petrol equivalent and saves $1,680 per year in fuel alone, the break-even point is roughly three years. With off peak or EV tariff charging, it can be under two years.

Larger price gap

If the price difference is $15,000, the fuel-only break-even point is roughly nine years at a home standard rate, or around seven years on an off peak tariff. When servicing savings are included, the break-even comes earlier.

Higher mileage drivers

Drivers who cover more than 15,000 km per year break even faster because the per-kilometre savings accumulate more quickly. At 25,000 km per year, the annual fuel saving on a standard home rate rises to $2,800, cutting break-even times significantly.