Australian electric vehicle (EV) owners are facing significantly higher car insurance premiums compared to those driving hybrid vehicles, according to new market data from Compare the Market.
The comparison platform analyzed insurance quotes for 20 electric and hybrid vehicle models. As of March 2025, the average annual insurance premium for battery-electric vehicles (BEVs) was $2,134, while for hybrid and plug-in hybrid electric vehicles (HEVs/PHEVs), the average premium was $1,650.
The data, gathered from 11 insurers and six underwriters, shows a considerable variation in premiums across different models. The Tesla Model 3 and Model Y had the highest average quotes, at $3,334 and $3,110, respectively. On the other hand, more affordable options like the MG 4 Excite and BYD Dolphin were quoted under $1,700.
Why EV Premiums Are Higher
The higher premiums for EVs are largely due to the complexity of repairs and the cost of specialist parts. According to the Insurance Council of Australia (ICA), about 60% of claims-related expenses come from labor and parts, and EVs tend to have higher costs in these areas because of their newer technology and limited availability of parts.
In contrast, hybrids, which combine both electric and petrol engines, generally come with lower insurance quotes. For example, the Hyundai Kona Hybrid ($1,471) and Toyota Corolla Cross GX Hybrid ($1,480) were among the more affordable options. However, some hybrid models, such as the BYD Shark 6 Premium, reached as high as $2,071.
Challenges for EV Adoption
Further research from NRMA Insurance highlights other barriers to wider EV adoption in Australia. The “Changing Gears” report identified a shortage of certified EV repair technicians as a major issue. While most Australians understand that EVs require specialized servicing, only 10% of local technicians were certified to repair them in 2023.
John Bright of Bosch Automotive Service Solutions emphasized the need for increased investment in training for EV diagnostics and battery handling. Public support for a national EV technician training program stands at 66%.
Safety and Sustainability Concerns
Safety issues, particularly regarding battery fires, also remain a concern. Although there have been only 10 confirmed EV battery fire incidents nationwide, confusion persists, as incidents involving e-scooters and e-bikes use different battery standards.
A recent survey found that 69% of Australians are worried about the risk of battery fires during charging, while 79% support regular checks on battery conditions. Additionally, sustainability concerns are growing, with 68% of respondents expressing worries about the disposal of EV batteries at the end of their life, and only 30% feeling confident in current battery reuse options.
This data underscores the ongoing challenges facing the EV sector, from higher insurance premiums to safety and sustainability concerns, which may slow the widespread adoption of electric vehicles in Australia.
