How high do petrol prices need to go to make electric cars more affordable?
By Sourced Externally
February 16, 2022
Record fuel prices would need to double again before electric vehicles were more affordable than conventional alternatives, according to an industry body.
Average petrol prices in Australia hit record nominal highs this month as oil markets soar
An industry body says petrol prices will need to double again to make EVs affordable by comparison
EVs made up barely 1 per cent of new car sales in Australia last year
Petrol prices have been nudging $2 a litre across Australia’s major cities as fears of war between Ukraine and oil giant Russia send resources markets soaring.
Despite the hip-pocket pain at the bowser, the Australasian Convenience and Petroleum Marketers Association (ACAPMA) says petrol prices would have to reach $3.85 a litre before a consumer could recover the extra costs of an EV within five years.
The lobby group, which represents fuel wholesalers and retailers, said the analysis was based on an average price premium of $25,000 for an EV compared with an internal combustion engine model.
ACAPMA boss Mark McKenzie stressed service stations were agnostic about the fuels they sold and were keen to provide fast-charging services.
But he said petrol prices were still not enough to offset the higher costs of a new EV.
“We are nowhere near that level at the moment,” Mr McKenzie said.
“But it presupposes that everyone is doing a profit-and-loss or an economic analysis at the dining room table, and most people don’t.”
Supply a bigger speed hump
Consultancy Bloomberg New Energy Finance (BNEF) said even if rising petrol prices drove people towards electric cars, they might not be able to get one because Australia was a “laggard” in the global EV pecking order.