Electric vehicles and your power bill

You’re more likely to find an electric vehicle on Australia’s roads now than ever before, with their popularity surging thanks to the likes of Tesla Motors which has proved they don’t have to be boring or a self-defeating concept. However, there are still some major drawbacks to owning an electric car – one of which a local energy retailer is keen to solve, your power bill.

What are the drawbacks of owning an electric car?

Like with any vehicle, electric cars come with their pros and cons. Here are some of the things you should keep in mind before making any big decisions:

Cost of ownership can be expensive

While cheap electric vehicles (EVs) such as the Nissan Leaf may be tiny hatchbacks, their batteries can still be expensive if they need replacing. It’s estimated that EV batteries cost about $150 per kWh. The Nissan Leaf has a 24kWh battery, and while lithium-ion batteries are generally reliable and resistant to breakdown, replacing one can be very expensive. The initial purchase price of a Nissan Leaf – over $30,000 – is also more expensive than comparable fossil fuel hatchbacks.

Another thing to consider is insurance. While these small hatchbacks may be cheap to insure, you have to consider that Tesla is likely to be the vehicle many people are aiming for. The current Tesla offerings are essentially exotic cars – more akin to luxury European marques rather than the Nissan Leaf or an everyday family sedan. As such, insurance is likely to be high. Just look at the average retail prices of a new Tesla Model S – exceeding $200,000. Put simply, if you’re looking at buying an electric car simply to save money then you may be buying into a false economy.

Battery range and charging limitations

On the topic of batteries, another thing to consider is that lithium-ion batteries are still in the early stages of development and have relatively short ranges compared to petrol and diesel engines. The largest battery pack the Tesla Model S comes with is 90kWh, and users can expect an average of less than 500km from one charge. This range lacks in comparison to many petrol cars, especially diesel varieties. For example, a 2015 turbo-diesel Volkswagen Jetta has an average range of about 1000km.

Obviously no one drives 1000km in one go, but currently in Australia, Tesla Supercharging stations are rare outside of the Sydney-Melbourne corridor. This means that for any serious long-range driving, electric vehicles cannot compete with fossil-fuelled vehicles. If you are in the Sydney-Melbourne corridor, then you are in luck, but Superchargers may limit where you can stop (for example, maybe you have a favourite stop-off between Melbourne and Sydney that isn’t close to a Supercharger). Additionally, expect over an hour for your EV to fully charge from empty with the Supercharger. If you have to travel long distances regularly, EVs are outclassed by fossil-fuel competitors due to their limitations in battery ranges.

Electricity bills may increase

For day-to-day commuting, electric vehicles are a very viable car choice. You can plug them in overnight and wake up to a fully-charged battery. But charging an EV in your own garage has the potential to suck up a fair bit of electricity. This can subsequently impact your power bill. You’re trying to do the right thing for the environment, but it’s certainly not helping your back pocket! A rising electricity bill is the last thing you’d need.

To work out how much extra power you will be using per day, Tesla provides a calculator to use. Considering the average Aussie commute is 15.6km each way, or 31.2km a day, and assuming an average Cents/kWh rate for electricity is 23c, you can expect to pay around $1.50 each day to charger your vehicle. Of course, everyone’s individual circumstances are different, so it’s worthwhile to figure out your electricity rate per kWh as well as how many kilometres you drive per day. This will enable you to estimate how much your electricity bill could increase.

How are electricity rates set?

What’s the solution to electricity costs?

The solution lies in electricity companies providing discounts on their usage rates if you have an electric vehicle. Energy provider Click Energy has gone one further and become the first Australian company to launch an electricity product specifically for owners of electric cars. Using their calculator, we break down the savings that could be had:

Using the metrics of:

  • Car: Tesla Model S 90D MY16
  • Commute per day: 31.2km

Compare the following:

Reduced EV plan usage charges Regular usage charges (based on 23c/kWh)
Cost per day: $1.14 $1.50
Cost per month: $34.68 $45.63
Cost per quarter: $104.03 $136.88
Cost per year: $416.10 $547.50

So you could save as much as $131 over the course of a year – not bad. Of course, there are many factors to consider when calculating the cost to charge your electric vehicle. If you travel further every day, then your chances of saving money are even higher. Plus, don’t forget those kilometres travelled on weekend trips and doing errands!

Going by the figures above, you can see that by switching to an EV-friendly energy plan, you have the potential to save a handsome amount of money. You also have to consider that this new EV-friendly rate from Click Energy applies to your whole household, and not just for charging your car. Also consider the savings to be had by not spending money on fuel every week. While you won’t eliminate your charging costs altogether, like the old saying goes, a penny saved is a penny earned.

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