Fuel is a major expense for businesses operating vehicle fleets, and events this year have shown just how unpredictable those costs can be.
Although prices have eased from their March peak, they’re still considerably higher than before the Middle East conflict, putting continued pressure on businesses that rely on petrol and diesel vehicles.
The growing availability of electric vehicles (EVs) is giving businesses an alternative. Switching to electric could reduce ongoing transport expenses, with potential savings reaching tens of thousands of dollars annually for larger fleets.
How much could businesses save by switching to electric?
Higher upfront purchase prices have traditionally been one of the biggest barriers to EV adoption. However, with more manufacturers offering a wider range of models and prices, businesses now have more choice.
The bigger savings, though, are in the running costs, particularly with petrol prices remaining elevated.
The more kilometres a vehicle covers each year, the greater the opportunity to offset additional upfront costs through lower running expenses.
To illustrate the potential savings, we’ve compared petrol and electric SUV running costs across four different annual driving distances.
The comparison assumes consumption of 7.5L/100km for a petrol SUV and 17kWh/100km for an electric SUV.
For energy prices, we’ve used petrol at $2.39/L, based on the ACCC’s average across Australia’s five largest capitals on 7 October 2026, and electricity at 32.7c/kWh, consistent with Savvy’s previous EV cost modelling.
| Annual distance | Petrol cost | EV electricity cost | Annual saving |
| 10,000km | $1,793 | $556 | $1,237 |
| 15,000km | $2,689 | $834 | $1,855 |
| 20,000km | $3,585 | $1,112 | $2,473 |
| 25,000km | $4,481 | $1,390 | $3,091 |
Source: Savvy calculations. Figures rounded to the nearest dollar. Energy costs only; excludes charging losses and other vehicle ownership expenses.
For a vehicle travelling 20,000km annually, switching from petrol to electric could reduce energy costs by around 69%, saving approximately $2,470 each year.
Across a business fleet, those savings can quickly add up.
| Fleet size | Potential annual energy savings |
| 5 vehicles | $12,366 |
| 10 vehicles | $24,732 |
| 20 vehicles | $49,464 |
Assumes each vehicle travels 20,000km annually, with the same consumption figures and energy prices used above.
A business operating ten vehicles could therefore save approximately $24,700 annually on energy costs alone, increasing to almost $49,500 for a fleet of 20 vehicles.
How do changing energy prices affect the savings?
The potential savings from switching to electric will fluctuate with both petrol and electricity prices.
For a petrol SUV consuming 7.5L/100km, every 10c/L increase in petrol prices adds $150 to the annual fuel bill at 20,000km.
Electricity costs also matter. Businesses charging at depots may benefit from cheaper overnight tariffs, while those relying on public fast chargers could pay considerably more.
For example, if a business relied on public fast chargers costing 70c/kWh, the potential annual energy saving for a 10-vehicle fleet travelling 20,000km each would fall from approximately $24,700 to $11,950.
What other costs should businesses consider?
Lower energy costs aren’t the only potential benefit of switching to electric. With fewer moving parts and no need for oil changes, EVs can also be cheaper to service and maintain than their petrol counterparts.
But there are other expenses that can eat into those savings. Higher purchase prices, financing costs, insurance, depreciation and installing charging infrastructure can all affect whether an EV works out cheaper over its lifetime.
Tax incentives can also make a difference, particularly for businesses providing vehicles that employees can use privately. Eligible EVs are currently exempt from fringe benefits tax (FBT), but the government has announced changes from April 2027 that could affect the cost of companies future fleet finance arrangements.
Which businesses could benefit most from electrification?
Not every business will benefit equally from switching to electric. Those with vehicles covering longer distances on predictable routes, and somewhere convenient to charge them, are likely to see the biggest savings.
Government departments, healthcare providers, hospitality businesses and field service operators are good examples. Vehicles used for patient visits, local deliveries or travelling between appointments can clock up considerable kilometres each day, often returning to a depot or office where they can recharge overnight.
However, electrification isn’t practical for every vehicle or industry. While electric vans, utes and heavy-duty vehicles are entering the Australian market, limitations around range, towing capacity, payload and charging infrastructure can make them less suitable for certain jobs and industries, such as construction.
But that doesn’t mean their entire fleet needs to run on fuel. These businesses could retain conventional vehicles for demanding work while switching passenger vehicles used by staff to electric.
Electrification doesn’t need to be an all-or-nothing decision. Starting with the vehicles that make the most financial and practical sense could be a more effective way to reduce fleet operating costs.
