How much does an electric car actually cost?

In Australia, fully electric cars range in price from $44,990 (total drive-away price) for the MG ZS EV, to $770,000 for the Rolls-Royce Spectre.

If you've ever wanted to buy an Electric Vehicle (EV) and then Googled the price of one, you've no doubt puffed up your cheeks, breathed out hard and then uttered sounds of disbelief, which could be translated in polite speech as: "Why do electric cars cost so much?"

The answer as to why electric cars are more expensive than internal-combustion-engined (ICE) vehicles boils down to simple economics: a fortune has been spent on the research, development and manufacturing of EVs, and car companies understandably want a return on their investment sooner rather than later.

The comparative lack in consumer demand for EVs also means they are being produced in smaller numbers, relatively speaking, which is another reason for the sizeable gap when you look at the price comparison between EVs and ICE vehicles.

This is what the phrase 'economies of scale' means; the more of something you sell, the cheaper it becomes to manufacture it on a mass scale, thus driving down the purchase price.

Here endeth the economics lesson.

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But there's also the fact that only a small number of companies produce EV batteries, which allows them to control the market price. Battery prices will come down, of course, but not as fast as we'd all like.

Cost of electric cars in Australia

If you're wondering if the price of electric cars in Australia is more expensive when compared to the rest of the world, the answer is yes - and for rather frustrating reasons.

While the Australian Federal Government has so far refused to offer incentives and tax breaks to entice EV uptake with consumers (although some state and territory governments have) there is far less demand for electric cars in Australia, causing them to be more expensive than their fossil-fuel-powered ICE counterparts.

In countries where you are given cash incentives by the government to buy EVs - most famously Norway, where EVs now make up more than 90 per cent of all new car sales - that obviously drives down the price for the end-user as well.

The majority of the world's car companies, however, are taking steps towards an all-electric future, so expect prices to drop once the world shifts more clearly in that direction - whether the Australian government likes it or not.

With some European countries moving to phase out the sale of ICE vehicles altogether by 2030 or 2040, it's going to place significant pressure on car manufacturers to build more EVs, and to eventually stop making anything else (Audi has already said it will stop making new ICE cars in 2026).

Electric cars Australia: price range

If you're wondering "How much electric cars?" below is a look at some of the EVs that are available for sale in Australia, ranging from the cheapest to the most expensive.

While this isn't a comprehensive price list, it does give a good overview of how little - or how much - you can expect to pay should you choose to buy a new EV.

Cheapest: BYD Dolphin

Cost: From $38,890, plus on-road costs

The battle for Australia’s cheapest EV heated up in 2023 with the launch of a trio of options that all hit showrooms under the $40,000 mark - the $39,990 GWM Ora, the $38,990 MG4 and this, the BYD Dolphin. It’s only $100 cheaper than the MG4, but less is more in this contest.

The Dolphin is a small hatch powered by a 70kW/180Nm front-mounted electric motor combined with a 44.9kWh battery. BYD claims it has a driving range of up to 340km.

However, despite being ever-so-slightly more expensive, MG could probably argue it offers the ‘best value’ EV, because that extra $100 brings a more powerful motor (125kW), a bigger battery (51kWh), more range (350km) and rear-wheel-drive dynamics (the electric motor is on the rear axle).

The BYD Dolphin holds the title of cheapest EV, priced from $38,890, plus on-road costs.

Low end: MG ZS EV

Cost: From $47,337, plus on-road costs

Australia’s previously most-affordable EV has crept up in price, but it’s still very much at the lower end of the pricing scale. The price rise is, in part, thanks to a mid-life upgrade that has stretched its driving range to 320km (up from 263km) and introduced a more powerful motor, making 130kW (instead of 105kW).

The MG ZS EV costs from $47,337, plus on-road costs.

Mid-range: Tesla Model 3

Cost: From $61,900, plus on-road costs

Australia’s most popular EV received its first major upgrade in 2023, bringing a fresh look and improved powertrain while also ditching what few remaining buttons and levers were left in the cabin. This streamlined Model 3 is expected to remain popular, despite the price fluctuating several times in the past two years.

The updated Model 3 is a simpler range, with just the rear-wheel drive (RWD) and Long Range all-wheel drive (AWD) now available. Tesla hasn’t confirmed what’s actually underneath, but it’s believed it has carried over the existing 208kW electric motor and 60kWh battery. It’s the RWD that’s available for this lower price, but it still offers a driving range of 513km, which is part of the reason it remains so appealing to local buyers.

The Model 3 is priced from $61,900, plus on-road costs.

Upper mid-range: Kia EV6

Cost: From $72,590, plus on-road costs

While Toyota has been slow and Mazda cautious, Kia and Hyundai are two leading brands that have jumped into the EV market with purpose. While the Hyundai Ioniq 5 stole attention with its bold styling, Kia’s sleeker EV6 is a compelling package.

While a mid-size SUV externally, being built on Hyundai-Kia’s bespoke ‘e-GMP’ platform means there is large SUV size inside. It also boasts impressive performance, even from the entry-level Air RWD model, with 168kW/350Nm and 528km of range.

The Kia EV6 is priced from $72,590, plus on-road costs. (Image: Tom White)

Expensive: Audi Q8 e-tron

Cost: $153,900, plus on-road costs

Another EV receiving a mid-life update (it appears 2023/24 is a key year for this generation of EVs) is Audi’s e-tron, which is now officially known as the Q8 e-tron. Slotting into an expanded range that includes both petrol and diesel Q8 variants, this is likely to be the path forward for the four-ring brand, integrating e-tron options into existing model line-ups.

The name change also brings a rejigged range, with the entry-level powertrain dropped in favour of a focus on the 300kW/664Nm 55 Quattro variant, which is available in both SUV and Sportback body styles.

The Audi Q8 e-tron wears a price tag of $153,900, plus on-road costs.

Most expensive: Porsche Taycan Turbo S

Cost: From $363,800, plus on-road costs

It’s a big asking price - it should really puff your cheeks out - but you do get a lot of car with the Taycan Turbo S. Porsche made a surprisingly early leap into the EV market with the Taycan, but has played to its strength and sells the car on its performance as much as its ‘green’ credentials.

The Taycan Turbo S has a dual-motor powertrain that makes a staggering 560kW/1050Nm, which is enough to launch it from 0-100km/h in 2.8 seconds.

That’s Porsche’s claim, but amazingly we’ve actually run a 2.5 second time in the car. Unfortunately, this performance bias does have an impact on the driving range, which is rated at 405km, noticeably less than some cheaper EV alternatives.

The Porsche Taycan Turbo S is priced from $363,800, plus on-road costs.

Staggeringly expensive: Rolls-Royce Spectre

Cost: From $770,000, plus on-road costs

If you’re looking to cut down on your carbon footprint on the way to your private jet, Rolls-Royce has you covered. The Spectre is the British uber-luxury brand’s first EV and is the answer for those looking for the ultimate electric experience.

It may weigh nearly 3000kg, with 700 of those kilos making up the massive battery, but with dual electric motors making 490kW/900Nm it still has the effortless performance you expect from a Rolls. And while there’s the option to turn on the ‘Rolls-Royce Sound’ to produce an artificial soundtrack, part of the appeal of an electric luxury car is the near-silent motoring experience.

The Rolls-Royce Spectre is priced from $770,000, plus on-road costs.

Is there a benefit to paying more for an electric car?

If you're concerned about climate change and the planet - which you should be, since you live here - EVs are the smarter, more environmentally friendly choice, provided you have the dollars to spare (or the patience to wait until prices invariably fall over time).