Payback or pay off - the double standards confronting EVs

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Years ago when we bought a petrol or diesel vehicle, the payback period meant the time it took you to pay off your loan.  Now people are asking me what’s the payback period for my EV.  I know they mean “what savings will I make by going electric”. Because for some reason people think an EV should pay for itself yet an ICE vehicle you just need to pay off. Double standards I say.

Anyway, I’ve done my calculations on paying off and paying back periods of my Kona EV.  You download the spreadsheet and run the numbers for your own circumstance and vehicle, but I've started you off with my figures. Let me know how you go.  Key things for me… I traded in my 2013 Hilux for $23k, I earn $1 per km ($400) a week for work travel, The Kona cost $58k plus on road costs - totalling $67k. So a loan of $43k


I charge at home, during the night, from the grid. Our house electricity is from our local energy provider Indigo Power who source electricity from green energy sources, and purchases and surrenders Certified Emission Reductions (CERs) through their electricity supply partner, Energy Locals.  End result is the car is run on carbon neutral electricity.


I travel 52,000 km per year and now I save $8400 per year by driving an EV instead of an ICE vehicle.  This alone gives me a payback period on the loan of about 5 years. Charging from the carbon neutral grid I reduce my carbon emissions from 13.5 tonnes to zero. 


Now some people may think that charging from a carbon neutral source makes home batteries a mute point.  Having an EV and home batteries actually opens up further cost savings and opportunities to secure our household energy and feed into our local grid.  Now the more we feed into the grid and bring the price of electricity down, the less talk there’ll be about nuclear generated electricity.  That would silence a couple of Australian Politicians!  Home batteries are another blog.  They will just confuse things here.


Getting back to payback periods and pay off periods… I can pay off my loan quicker because my car earns me money - $400 per week in travel reimbursements. With this plus the running cost savings gives me a pay off period  equal to 1.5 years. 


I’ve not included calculations around depreciation - that's something for my accountant to work out - I’ll run a log book, work out Business use vs Personal use blah blah blah.  Then I need to work out how to claim the percentage off my power bill for car charging.  Oh hell, that's gotta be another blog to talk about the 4.2 cents per km I can claim.


You can see it’s a no brainer to go electric.  Just think that it’ll cost you a third less to run your EV. So go out and get an EV.




Note:  The only things I could not factor in was a replacement high voltage EV battery -about $11k or around $0.07 per km.  But I figured there were some Hilux running costs (timing belts etc) that would counteract the battery replacement if it died just after the 160,000 warranty expired.  


I plan to run the car until its battery gets below the 85% charging capacity.  I want to see how these batteries last.  So in a little over three years or 160,000 km I’ll report back.


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