Electric cars are the cheapest to run in Australia in 2026, followed by hybrids, then plug-in hybrids, with petrol the most expensive at the pump. A typical EV costs about $675 a year in electricity to drive 15,000 km, a hybrid about $1,283, and a petrol car about $2,280. But running cost is only half the decision. Once you add purchase price, servicing and depreciation, hybrids often work out cheapest overall for most buyers, while EVs win for high-kilometre drivers who can charge at home, especially through a novated lease.
This guide compares all four powertrains, petrol, hybrid, plug-in hybrid (PHEV) and electric (EV), on real Australian numbers so you can see which one actually saves you money.
Quick answer
Powertrain | Energy cost / year | 5-year running cost | Best for |
|---|---|---|---|
Electric (EV) | about $675 | lowest | Home charging, high km, long ownership |
Hybrid (HEV) | about $1,283 | low | Most drivers wanting savings with no charging |
Plug-in hybrid (PHEV) | $900 to $1,283 | medium | Short commutes you can charge, longer trips on petrol |
Petrol | about $2,280 | highest | Low km, tight upfront budget, buying used |
Based on 15,000 km a year, petrol at $1.90/L and electricity at $0.30/kWh.
What counts as a "running cost"?
Real ownership cost in Australia is more than fuel. It includes:
Fuel or charging — the biggest difference between powertrains.
Servicing and maintenance — fewer moving parts means cheaper upkeep for EVs.
Depreciation — usually the single biggest cost of any new car, and it varies a lot by powertrain.
Insurance, registration and tyres — broadly similar, though EVs can cost a little more to insure.
Purchase price — where petrol still wins, and what has to be paid back through running savings.
We will work through each, then bring them together.
Fuel vs charging: cost per 100 km
Using a realistic Australian scenario (15,000 km a year, petrol at $1.90 per litre, electricity at $0.30 per kWh):
Powertrain | Typical efficiency | Cost per 100 km | Cost per year |
|---|---|---|---|
Petrol | 8.0 L/100km | $15.20 | about $2,280 |
Hybrid | 4.5 L/100km | $8.55 | about $1,283 |
Plug-in hybrid | 6 L + some charging | $6.00 to $8.55 | $900 to $1,283 |
Electric (standard power) | 15 kWh/100km | $4.50 | about $675 |
Electric (off-peak power) | 15 kWh/100km | $2.70 | about $405 |
An EV costs less than a third of a petrol car per kilometre, and charging off-peak or from home solar can halve that again. Hybrids cut fuel use by roughly 40 to 50 percent with no plug required. A PHEV lands anywhere between an EV and a hybrid depending on how often you actually charge it, which is the catch with plug-in hybrids.
For the cheapest individual models in each category, see our cheapest cars to run in Australia guide.
Petrol cars: cheapest to buy, dearest to run
Petrol still dominates Australian sales because it is affordable up front, easy to refuel anywhere, and available in huge numbers on the used-car market. Popular choices include the Toyota Corolla, Mazda 3, Hyundai i30 and Kia Cerato.
The weakness is fuel dependency. At 8 L/100km and $1.90/L, a petrol car costs about $2,280 a year, or $11,400 over five years, and that rises whenever fuel prices spike. Petrol makes the most sense if you drive low kilometres, live rurally, want the lowest purchase price, or are buying used.
Hybrids: the practical middle ground
Hybrids pair a petrol engine with an electric motor and regenerative braking, cutting fuel use without any charging. They shine in stop-start city traffic. Popular options include the Toyota Corolla Hybrid, Camry Hybrid and RAV4 Hybrid.
At about 4.5 L/100km, a hybrid costs roughly $1,283 a year in fuel, saving about $1,000 a year over a comparable petrol car, or $5,000 over five years. Servicing is usually 10 to 20 percent cheaper too, and Toyota hybrids in particular hold their value strongly. For most Australians who cannot charge at home, a hybrid is the lowest-fuss way to cut running costs.
Plug-in hybrids (PHEVs): best of both, if you plug in
A PHEV has a bigger battery and can drive 40 to 100 km on electricity alone, then switch to petrol for longer trips. If you charge every night and your commute is short, a PHEV runs almost like an EV, around $900 a year. If you rarely plug it in, it behaves like a heavier hybrid and the savings shrink.
PHEVs also carry the highest purchase price of the group and tend to depreciate faster, so they suit a specific buyer: someone with short, chargeable daily trips who still needs petrol range for the occasional long drive. PHEV sales in Australia more than doubled in 2025, helped by the popularity of models like the BYD Sealion 6 and GWM Haval H6 PHEV.
Electric cars: lowest running cost of all
EVs have no engine oil, spark plugs, exhaust or conventional transmission, so they are cheapest to run and to service. Popular models include the Tesla Model 3, BYD Atto 3, MG4, Kia EV3, Hyundai Kona Electric and Ioniq 5.
At 15 kWh/100km and $0.30/kWh, an EV costs about $675 a year to charge on a standard tariff, or closer to $405 off-peak. Servicing runs 30 to 50 percent lower than petrol, and brakes last longer thanks to regenerative braking. The trade-offs are a higher purchase price and reliance on charging access, which is why home charging is the key to EV value.
5-year running cost compared (energy plus servicing)
Powertrain | Energy (5 yr) | Servicing (5 yr) | Total running cost (5 yr) |
|---|---|---|---|
Petrol | about $11,400 | about $3,000 | about $14,400 |
Hybrid | about $6,400 | about $2,500 | about $8,900 |
Plug-in hybrid | about $5,500 | about $2,800 | about $8,300 |
Electric | about $3,375 | about $1,800 | about $5,175 |
On running cost alone, an EV saves close to $9,000 over five years versus petrol. But this table leaves out the two things that decide the real winner: purchase price and depreciation.
The two costs that change everything: purchase price and depreciation
Purchase price. Entry prices roughly look like this in 2026:
Powertrain | Typical entry price (drive-away) |
|---|---|
Petrol | from about $22,000 |
Hybrid | from about $28,000 |
Electric | from about $32,000 (BYD Dolphin) |
Plug-in hybrid | from about $45,000 |
See our average new car price by brand guide and the cheapest new cars in Australia for the full picture.
Depreciation is usually the biggest cost of owning any new car, and it varies by powertrain:
Hybrids (especially Toyota) hold their value best right now, which is a big reason they win on total cost.
Petrol cars depreciate steadily but predictably.
EVs depreciated heavily a couple of years ago as prices fell, though resale is now stabilising as demand grows.
PHEVs are the most exposed, combining a high purchase price with softer resale.
Because depreciation can swing several thousand dollars either way, it often matters more than fuel. A car that is cheap to fuel but loses value fast can still cost more overall.
Break-even: when does a hybrid or EV pay off?
The premium you pay up front is recovered through running savings over time.
Hybrid over petrol: a hybrid usually costs $1,500 to $3,000 more but saves about $1,000 a year, so it breaks even in roughly 2 to 3 years, and holds value better after that. For most buyers, the hybrid wins.
EV over petrol: an EV might cost $8,000 to $10,000 more but saves $1,500 to $1,800 a year in running costs, breaking even in about 5 to 7 years if you buy outright.
The novated-lease shortcut: eligible electric cars under the luxury car tax threshold (about $91,000) are exempt from Fringe Benefits Tax when packaged through a novated lease. This can save several thousand dollars a year and make an EV cheaper than an equivalent petrol car from day one for salaried buyers. Some states add rebates or registration discounts on top.
Same car, two powertrains: Toyota Corolla example
Corolla | Fuel use | Fuel cost / year | Extra to buy | Fuel saved / year |
|---|---|---|---|---|
Petrol | 6.0 L/100km | about $1,710 | baseline | baseline |
Hybrid | 4.0 L/100km | about $1,140 | about $2,000 more | about $570 |
The hybrid Corolla pays back its premium in around three and a half years, then keeps saving and holds its value better. This is why hybrids have become the default smart choice for so many Australian buyers.
Which should you buy?
Choose petrol if you want the lowest purchase price, drive low kilometres, live rurally, or are buying used.
Choose a hybrid if you drive daily, cannot charge at home, and want strong savings and resale with zero lifestyle change. This suits the majority of buyers.
Choose a plug-in hybrid if your daily trips are short and chargeable but you still need petrol range for long drives, and you can access salary packaging or an incentive to offset the price.
Choose an EV if you can charge at home, drive plenty of kilometres, plan to keep the car a while, or can use the FBT novated-lease exemption. For you, an EV is cheapest to run and can be cheapest overall.
Not sure which model fits? Compare any two cars side by side or browse new cars to see live pricing.
Conclusion
In 2026, electric cars are the cheapest to run in Australia, hybrids are a close and convenient second, plug-in hybrids sit in the middle if you charge them, and petrol is dearest at the pump but cheapest to buy. The best value for most drivers today is a hybrid, thanks to low running costs, no charging needs and strong resale. But for high-kilometre drivers who can charge at home, or anyone using a novated lease, an EV is the smartest long-term choice. Weigh your budget, kilometres and charging access, then browse new cars or read our cheapest cars to run guide to shortlist.