Going green? Here are some green car options available in Australia

The environment is a major concern to a growing number of Australians. In fact, last year’s annual Ipsos Climate Change Report 2022 revealed that 83% of Aussies are concerned about climate change. With rising concern for the climate has come an international movement aiming for net carbon zero emissions, including the European Union’s roadmap to zero emissions by 2030.

Green cars and electric vehicles play a large role in this. Australia is forging a pathway towards increased support for low emission vehicles, which will be crucial as currently about 11% of Australia’s greenhouse gas emissions come from cars.

As of the most recent State of Electric Vehicles Report, published in October 2022, Aussies are buying more and more electric vehicles (EVs). By September 2022, we had purchased 26,356 EVs in the year to date. This is a major leap on the grand total of some 23,000 EVs registered in Australia in total in 2021 (according to the Australian Bureau of Statistics).

Though numbers of low emissions vehicles in Australia are growing, they make up only a small percentage of the cars purchased in Australia - especially when compared to other countries. As of October 2022, EVs accounted for 3.39% of new vehicles purchased in Australia. When compared to the 72% of EVs that make up new car purchases in Norway, or 9% of EVs that were a portion of global new vehicle sales, per the International Energy Agency (IEA), 3.39% feels extremely low.

However this 3.39% represents a 65% growth on Australia’s new electric vehicles for 2021, which is a significant swing in an environmentally sustainable direction. As expected, EV uptake differs across the country. The ACT has far and away the highest rate of new electric cars purchased, at 9.5%. In NSW this figure is 3.7%, followed by Victoria at 3.4%, QLD and Tasmania at 3.3%, WA at 2.8%, South Australia at 2.3%, and the Northern Territory at 0.8%. In what is likely not a coincidence, the ACT’s has also committed to phasing out new petrol and diesel car sales by 2035 and offer the most monetary incentives for green vehicles.

There are other considerations to account for with green cars. While a slowdown in the supply chain is still causing issues in Australia, it is even more prominent with electric vehicles. The IEA report comments on the rising costs of the raw materials involved in producing electric cars, particularly the lithium involved in manufacturing batteries and the computer chip shortage which disproportionately impacts EVs (requiring roughly double the amount of chips as comparable petrol vehicles). With demand for electric vehicles representing such a small portion of the Australian market, it is unsurprising that they are coming to the country in limited quantities.

With green cars come some of the cheapest car loans available, designed to incentivize environmentally friendly options (with some banks like Bank Australia even aiming to phase out new car loans for petrol and diesel vehicles by 2025). Add these financing options to government incentives and the environmental impact, and there are many compelling reasons to consider going green for your next car. But what options are there on the Australian market?

What options do I have for green cars?

There are different options for green cars available in Australia, and much of it depends on what exactly you are looking for in a vehicle. 

As of the October report, there were a grand total of 45 electric vehicles available in Australia with 95 variants (60 battery electric variants and 35 plug-in hybrid electric vehicle variants). This number continues to grow as new models enter the market, which many are set to do in 2023. 

While some petrol vehicles are considered for green loans due to their lower emissions range, when we speak about green vehicles we are generally speaking about electric cars. The main choice is between a battery electric vehicle (BEV) or a plug-in hybrid electric vehicle (PHEV), though there are also hybrid electric vehicles (HEVs) that do not plug-in. You may also see reference to the far less common mild-hybrid electric vehicle (MHEV) which uses an integrated starter generator to assist the engine but cannot operate the car off battery alone, or the fuel cell electric vehicle (FCEV), which generates its own chemical charge and does not require charging. We’ll break down the differences and point out some popular options on the market.

Battery electric vehicles

The most traditional kind of electric vehicle is a battery electric vehicle, or BEV. These run on an internal battery, unassisted by a petrol combustion engine. They are generally considerably more expensive than comparable light vehicles of the same size and specs, though there ends up being a major difference in cost over time in favour of BEVs. In fact, research by Evenergi for the Australian government indicates that 5 years of EV ownership stands to cost roughly $5,000 less over a 5 year span than a comparable petrol or diesel vehicle. The Electric Vehicle Council calculates the average EV running cost at roughly $4/km as opposed to $10/km for the comparable petrol or diesel car.

In Australia, prices tend to range from roughly $44,000 (for models like the MG ZS and the BYD Atto 3) right up to well over $300,000 for something like the Mercedes-AMG EQS53.

BEVs have to go to specialised charging stations, which may be a positive or a negative depending on your outlook. These stations are not as readily available in many remote areas, so they are not ideal for long trips and can result in what is known as “range anxiety” (that is, the fear of getting stuck without the ability to charge). 

The number of charging spots and fast charging stations is growing. As of June 2022, there were approximately 2,147 public charging stations available and more than 3,669 individual charging stations installed. Though the public concentration is on metropolitan hubs, the charging network is being expanded to help ease that same range anxiety.

What are some advantages of a battery electric vehicle?

• An EV is cheaper to run than a combustion engine car. 

• Maintenance is also needed more infrequently on an EV due to fewer moving parts.

• Cheaper to register. Some states offer discounts on stamp duty for purchasing an EV as well as other incentives.

• Lower rates on car loans available for green cars.

• Creates less pollution thanks to its zero exhaust emissions and no combustion engine as back-up.

What battery electric vehicles are available in Australia?

Some of 2022’s most popular battery electric vehicles in Australia were:

• Tesla Model 3 (Australia’s top selling EV since its release)

• Tesla Model Y 

• Hyundai Kona

• Polestar 2

• Volvo XC40

• Hyundai Ioniq

• Kia EV6

• Porsche Taycan

Hybrid electric vehicles

Hybrid vehicles have both an electric motor powered by a battery and an internal combustion engine powered by petrol. A hybrid may use these two together for extra power or independently depending on the situation. For example, a hybrid will switch to the electric motor when you’re idling or driving at low speeds. 

There are two types of hybrid electric vehicles, as mentioned above: classic hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs). HEVs use the electric motor to drive the vehicle when the combustion engine is inefficient. The battery automatically “charges” from the fuel engine, and require filling with petrol. In comparison, PHEVs are much more similar to a battery electric vehicle. A PHEV will also use the battery if fuel is inefficient, but can be driven using only fuel or only electricity if the other power source is used up. As such, the battery component of a PHEV does require charging. 

Hybrid vehicles range in price even more dramatically than standard electric cars. You may be able to score an HEV for around $45,000, like the Mitsubishi Eclipse Cross PHEV, or you could opt for a prestige offering from a luxury car marker for over $500,000 - like the Ferrari 296 GTB.

What are some advantages of a hybrid electric vehicle?

• Don’t always need to be charged with an external source - some hybrids can recharge using a typical household powerpoint and others don’t require charging. 

• Cheaper to run and uses less petrol than a standard car. 

• Creates less pollution than a petrol only car when using the battery effectively.

• Eliminates the “range anxiety” that comes with battery electric vehicles - no worry about being away from charging stations.

• Available from a wide range of car manufacturers, including luxury car makers who do not make battery electric vehicles.

What hybrid electric vehicles are available in Australia?

Some popular HEVs in Australia include:

• Toyota RAV4 Hybrid

• Toyota Corolla 

• Kia Niro

• Lexus RX

If you are looking for a plug-in hybrid vehicle, some of the most popular in Australia include:

• MG HS 

• Mitsubishi Eclipse Cross

• Mercedes-Benz GLC300e Plug-in Hybrid

• Ford Escape ST-Line PHEV

• Mitsubishi Outlander PHEV

How do I finance an environmentally friendly vehicle?

Green loans are taking off as a trend in Australia and green car loans are no exception. These loans are designed specifically for you to purchase an eco-friendly car and tend to have lower rates than other vehicle financing options. Much like other car loans, they tend to be secured, so the car you buy will function as collateral to your lender if you end up defaulting on your loan.

Make sure you also look at the incentives and subsidies you are eligible to receive should you purchase or lease an electric vehicle. These figures have changed significantly even in the space of a year, making environmentally friendly cars an even more attractive option than before. 

If you are looking to go green for your next car - for your wallet or for the sake of the environment - explore some low rate car loan options below.

Stay on top of all things environmentally friendly at our green finance hub.