A new study by Compare the Market has found that electric vehicles (EVs) in Australia are significantly more expensive to insure than their petrol-powered counterparts, with premiums up to 50% higher for some models.
Insurance Cost Disparity: The top five best-selling EVs are 43% more expensive to insure than similar internal combustion engine models. Annual insurance costs for EVs can be $98 to $1,788 higher than comparable petrol vehicles.
Specific Examples: Tesla Model Y RWD costs $3,434.98 to insure, compared to $1,744.95 for a Toyota RAV4 Cruiser 2WD (96.85% difference). Tesla Model 3 RWD insurance costs $3,888.55, versus $2,101.04 for an Audi A3 35 TFSI sedan (85.08% difference).
Reasons for Higher Costs: Battery packs create more complexity for repairers. Many EV-specific parts need to be imported. Fewer qualified smash repairers for electric cars.
Hybrid Vehicles: Popular hybrid vehicles are typically 5% more expensive to insure than their petrol-only counterparts.
Industry Perspective: The Insurance Council of Australia attributes higher costs to factors such as expensive imported parts, complex systems, and limited EV service centers.
Consumer Impact: Higher insurance costs may offset some of the reduced running costs associated with EVs.
While EVs offer potential savings in running costs, the significantly higher insurance premiums present an additional financial consideration for potential buyers. As the EV market matures, there may be pressure on insurers to develop more competitive pricing strategies for electric vehicles.
