Australia’s annual inflation rate could have been about 0.6 percentage points lower if all household driving were electric, according to modelling commissioned by the Electric Vehicle Council.
The hypothetical analysis by Endgame Analytics found rising petrol and diesel prices contributed 0.77 percentage points to Australia’s 4.3% annual inflation rate in September.
Automotive fuel prices increased 23.6% during the year, while electricity prices rose 12.8%.
After removing automotive fuel from the consumer price index basket and adding the estimated electricity needed for equivalent EV travel, Endgame calculated an inflation rate of 3.75% — 0.59 percentage points below the reported 4.34%.
The analysis assumes EV charging costs 80% less than petrol, based on 80% of charging taking place at home and 20% through public chargers.
It is a what-if comparison rather than a measured effect or forecast. It excludes vehicle purchase prices and indirect impacts from areas such as freight, while the consumer price index weighting remains fixed between Australian Bureau of Statistics updates.
Electric Vehicle Council chief executive Julie Delvecchio says the findings demonstrate Australia’s vulnerability to international oil price movements.
“Petrol and diesel prices aren’t just hurting motorists at the bowser. They’re adding to inflation across Australia,” Delvecchio says.
“Electric vehicles give Australians a way to break that direct link with global oil prices. The more of our transport we electrify, the less exposed we become to future fuel price shocks and inflation.”
Endgame estimated that rising fuel prices added $442 to the annual running cost of a small petrol SUV travelling 15,000km.
The calculation was based on an annual fuel bill of about $1870 at the September 2025 average petrol price of $1.81 a litre.
By comparison, charging an EV for the same distance was estimated to cost $374 annually. The 12.8% electricity price increase added about $48 to that bill.
Endgame Analytics director Martin Chow says the model compares household petrol spending with the electricity required for the same travel.
“It assumes charging costs 80% less than petrol, and excludes vehicle purchase prices and indirect effects, such as freight,” Chow says.
The Electric Vehicle Council says EV purchase prices are also moderating. List prices for the base versions of Australia’s 10 best-selling electric vehicles fell by an average of 3.1% during the year to November.
It says Australia’s cheapest new EV is now priced at $19,990 driveaway and more than 500,000 battery-electric vehicles are operating on Australian roads.
“Inflation is squeezing household budgets, and every rate rise adds to that pressure,” Delvecchio says.
“The more Australians who drive electric, the less exposed households and the wider economy are to oil price shocks.”
The council is calling for the New Vehicle Efficiency Standard to remain in place alongside the fringe benefits tax exemption for eligible EVs and further investment in charging infrastructure.
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