EVs are everywhere now but the savings go beyond fuel …
If you’ve spent any time looking at end-of-financial-year car deals lately, you’ve probably noticed two things.
First, there are a lot of electric vehicles on offer now.
Second, buying the car is the easy part.
Once you’ve wrapped your head around things like battery life, charging requirements and why doesn’t the engine sound like it’s even on … another question pops up: should you get one of those special EV electricity plans?
The short answer? Quite possibly. Research suggests savings up to $1,800 a year …
Here’s what you need to know.
EVs are no longer novelty
Electric vehicles have moved well beyond the realm of early adopters and tech enthusiasts.
As petrol prices continue to yo-yo and more affordable models hit the market, plenty of Australians are at least considering whether their next car might have a plug attached.
EVs sales surged 157 per cent year-on-year in April and popularity is growing faster than we can put in community charging stations.
Obviously the savings on fuel are the big draw card, but EVs also tend to be cheaper to maintain, thanks to fewer moving parts and reduced brake wear. An EV electricity plan can also unlock extra value.
Doing the maths on EV electricity plans
While EV electricity plans generally work out to be cheaper, there’s a wide difference in how much you could save depending on retailers.
According to analysis from Compare the Market (where I am economic director), consumers on market-leading deals could save anywhere between $180 and $1,800 a year by switching to an EV-specific electricity plan.
The figures assume a household uses around 15kWh of electricity a day, plus another 20kWh a day to charge an EV.
The gap between an average and decent saving, comes down to timing.
Most EV plans let you charge your car for a lot less during set times of the day, often for under 10 cents per kilowatt hour. Some even offer periods of free electricity.
There’s a practical reason for that generosity.
Electricity use is lower while most people are asleep, so encouraging EV owners to charge overnight helps ease pressure on the grid during busy periods.
Also, more predictable demand also helps retailers manage their costs, and some of those savings are passed on to customers through lower rates.
As an added bonus, many EV plans don’t just apply to your car. Set the dishwasher or washing machine to run during those lower-cost periods and you’ll also save on their power costs.
But, as is often the case with anything carrying the words “special offer”, the devil lives in the fine print.
What to look out for
EV electricity plans aren’t always the bargain they claim to be.
Compare the Market found some retailers were charging higher rates on EV plans than on their standard offers, with daily fees up to 24 cents higher, usage rates up to 5 cents more per kilowatt hour, and peak rates up to 12 cents higher. Only three retailers offered identical pricing across their EV and standard plans.
In other words, simply labelling a plan “EV” doesn’t automatically make it better value.
That’s why it pays to shop around and compare.
How much power you use
It’s also worth remembering that how much you save depends on how you use your car.
A household that charges an EV every day is likely to see much bigger savings than someone who only plugs in now and then for the school run or the occasional weekend trip.
Likewise, a family running the dishwasher and washing machine on repeat will pay more for their power than one that uses them overnight when electricity is often cheaper.
Which is a reminder for all of us:
The way we use power matters, but it often doesn’t get the same attention we give to researching new purchases.
We’ll negotiate the price on a new white good, for example, but then stick with the same energy retailer when we could be getting a better deal. Spending just half an hour comparing plans can pay dividends.
Before choosing an EV electricity plan, ask:
- When do I typically charge my car?
- Can I shift other household appliances to off-peak periods?
- What is the daily supply charge?
- What rates apply outside the discounted charging window?
- How does the EV plan compare with the retailer’s standard offer?
The good news
Yes, it takes a bit of head-scratching and number-crunching to work it out, but for many EV drivers the savings on an electricity plan still stack up. Depending on the amount, it could cover registration or insurance, fund a weekend away, or simply take the sting out of the next power bill.
With regulators set to reduce standing offers from 1 July and competition increasing among retailers, now is a sensible time for both new and existing EV owners to compare what’s available.
As I said, buying the car is the easy part – but hopefully this clears up electricity plans a bit.
The e-manual, though? That, I can’t help you with ..
