NRMA Insurance Research on Electric Vehicle Adoption
A recent report by NRMA Insurance, titled ‘Changing Gears: The Road Ahead for EV Adoption in Australia,’ has revealed that increasing Australians’ familiarity with electric vehicles (EVs) could significantly boost their adoption rates. The research, conducted by Ipsos, found that as awareness and understanding of EVs grow, so does the likelihood of Australians considering them for their next vehicle purchase, potentially accelerating the country’s shift towards electric transportation.
Current State of EV Adoption in Australia
The report indicates that while 20% of Australians planning to purchase a vehicle within the next five years are considering an EV, this figure rises to 32% among those more knowledgeable about EVs. Although only 26% of Australians currently feel informed about EVs, nearly half (47%) are interested in learning more. Despite the growing interest, concerns about driving range (54%) and charging times (53%) remain significant barriers to broader adoption, even though most drivers travel fewer than 50 kilometres daily, well within the range of many EVs.
Addressing Misconceptions and Barriers
Julie Batch, CEO of NRMA Insurance, emphasized the need to correct misconceptions about EVs, particularly around driving range, safety, and costs. “Even with the progress made to date, there are a significant number of Australians still hesitant about purchasing an EV due to worries about driving range and cost,” she said. Batch advocated for the expansion of the second-hand EV market and the standardization of battery health testing to build consumer trust.
Supporting the Second-Hand EV Market
The growing availability of more affordable EV models could support the second-hand market, making EVs accessible to a wider audience. The report revealed that 58% of Australians interested in EVs would consider buying a used vehicle, presenting a potential pathway to increasing EV adoption across different income levels.
EV Cost-Effectiveness and Sustainability Concerns
While current EV owners tend to be confident in their vehicles’ sustainability and savings, many Australians remain skeptical about the overall cost-effectiveness and environmental impact of EVs. Only 30% of respondents view EVs as the most economical option, and 42% see them as the most environmentally friendly choice. However, the report noted that lower running and maintenance costs can make EVs more economical over time. For example, a car driven 13,700 kilometres annually could save approximately $1,000 in fuel costs each year, or $1,200 with overnight off-peak charging.
Policy and Market Growth
New South Wales Minister for Roads John Graham highlighted the importance of addressing specific barriers to EV adoption in Australia. “We need a laser-like focus on the specific barriers to EV take-up to properly understand what’s slowing us down,” he said. The report noted that EV sales have been growing rapidly in Australia, from less than 1% of new car sales in 2020 to 8.5% of light vehicle sales by 2023, holding steady at 8.4% in 2024.
Key Recommendations for EV Adoption
The report sets out several recommendations aimed at promoting EV adoption in Australia:
- Public Education Campaigns: Address gaps in understanding about EV safety, driving range, and costs through educational efforts.
- Charging Infrastructure Improvements: Provide clearer information about the locations and costs of charging stations.
- EV Repair and Service Networks: Invest in developing repair and service networks suited to EVs.
- Second-Hand Market Development: Support the growth of a second-hand EV market through policies and financial incentives.
- Battery Health Standardization: Introduce mandatory battery health testing to build trust in the long-term viability of EVs.
The second part of the Changing Gears report, expected later this year, will focus on comparing the costs, repairs, and environmental impacts of EVs and hybrid vehicles. Globally, the hybrid and EV insurance market is projected to grow at a compound annual growth rate (CAGR) of 16.88% by 2030, according to research by HTF Market Intelligence.
