Electric vehicles went from niche to mainstream in Australia in just a few years. Here’s how they work, how much they really cost to run, and what’s driving more Australians to buy them.
Electric vehicles, or EVs, use electric motors powered by a rechargeable battery instead of a petrol or diesel engine.
There are two main types. Battery electric vehicles run entirely on electricity and must be plugged in to charge. Plug-in hybrids have a smaller battery that can power the car for a limited distance, often 50 to 100 kilometres, plus a petrol engine for longer trips.
Regular hybrids, such as many Toyota models, also use a battery and electric motor, but can’t be plugged in. They charge their battery using the petrol engine and braking.
Sales are surging
EVs and plug-in hybrids made up 25.8% of new car sales in Australia in the first half of 2026, more than double the share a year earlier, according to the Electric Vehicle Council.
Rising petrol prices, driven by the disruption to oil supplies through the Strait of Hormuz, have pushed more buyers towards electric cars. There are also far more models available, including cheaper EVs from Chinese brands such as BYD.
The New Vehicle Efficiency Standard, introduced in 2025, sets average emissions targets for carmakers, encouraging them to sell more low and zero-emission vehicles in Australia. EVs under the luxury car tax threshold are also exempt from fringe benefits tax when provided through an employer, which has made salary-sacrificed EVs popular.
Running costs
Charging at home is usually much cheaper than buying petrol, especially for households with rooftop solar. Electric cars also have fewer moving parts, so servicing costs tend to be lower.
Public fast chargers are more expensive than home charging, but can add hundreds of kilometres of range in less than an hour.
Batteries
Most EVs use lithium-ion batteries. Many carmakers guarantee them for around eight years. Batteries do lose some capacity over time, but studies of older EVs suggest most degrade slowly.
Range varies widely between models, with many new EVs able to travel 400 kilometres or more on a charge.
The trade-offs
EVs still generally cost more to buy than equivalent petrol cars, although prices have fallen. Access to charging is a challenge for people who live in apartments or don’t have off-street parking, and public charging can be patchy in regional areas.
Insurance and repair costs can also be higher for some models.
Their environmental benefit depends partly on how the electricity is generated. As more of Australia’s electricity comes from renewables, the emissions from charging fall.
Some states have introduced, or tried to introduce, road user charges for EVs, because EV drivers don’t pay fuel excise, which helps fund roads.
