Electric Vehicle Insurance Premiums Remain Higher Than Hybrids in Australia
Electric vehicle (EV) owners in Australia continue to face higher car insurance premiums compared to those driving hybrid models, according to new market data released by Compare the Market. The comparison platform analyzed comprehensive insurance quotes across 20 EV and hybrid models, revealing average annual premiums of $2,134 for battery-electric vehicles (BEVs) and $1,650 for hybrid or plug-in hybrid electric vehicles (HEVs/PHEVs) as of March 2025.
The index, based on sample quotes from 11 insurers and six underwriters, highlighted significant cost differences across specific models. For instance, the Tesla Model 3 and Model Y attracted the highest average quotes at $3,334 and $3,110, respectively. At the lower end of the spectrum, the MG 4 Excite and BYD Dolphin were each quoted under $1,700.
Factors Contributing to Higher Premiums
Factors such as repair complexity and the cost of specialist parts are contributing to the higher premiums for EVs. According to the Insurance Council of Australia (ICA), approximately 60% of claims-related expenses stem from labor and parts, an area where EVs typically involve higher costs due to their newer technology and lower parts availability.
Hybrids, despite including both electric and petrol powertrains, came in with more modest insurance quotes. Models such as the Hyundai Kona Hybrid ($1,471) and Toyota Corolla Cross GX Hybrid ($1,480) were among the more affordable. However, premium variability persisted in this segment too; the BYD Shark 6 Premium, for example, reached $2,071.
Broader Challenges to EV Adoption
Separate research from NRMA Insurance pointed to further concerns that may hinder wider EV adoption. The “Changing Gears” report identified a shortage of certified repair technicians as a key issue. While most Australians recognize that EVs require different servicing, only around 10% of local technicians were certified to repair them in 2023. John Bright of Bosch Automotive Service Solutions stated that the sector must increase investment in training for diagnostics and battery handling. Public backing for a national EV technician training scheme currently stands at 66%.
Safety and Recycling Concerns
Battery-related safety remains a topic of concern for many drivers. Although only 10 incidents involving EV battery fires have been confirmed nationally, confusion persists due to separate incidents involving e-scooters and e-bikes with different battery standards. Sixty-nine percent of Australians surveyed expressed concern about battery fire risks during charging, while 79% supported regular checks on battery condition. Sustainability concerns are also growing, with 68% of respondents worried about end-of-life battery disposal and only 30% confident in current battery reuse options.
