David Koch has warned the cost to insure and repair electric cars is through the roof compared to petrol vehicles as EVs continue to grow in popularity in Australia.
Chinese made electric cars such as BYD have entered the market alongside established brands like Tesla and pushed the cost down, with the country on track to hit a record 100,000 EV sales this year, according to the Electric Vehicle Council.
The showroom price might be enough to sway buyers to make the environmentally friendly choice but, down the road, EVs could burn a hole in their owner’s wallets with the average EV costing 43 per cent more to insure than a petrol car.
Data from Compare The Market looked at the insurance premiums of the five most popular EVs alongside similar petrol models from Toyota, Audi, Hyundai and Mazda, using the example of 34-year-old Brisbane man with good driving history.
‘On average across 12 insurers studied, it’s anywhere between seven per cent to 97 per cent more expensive to cover the top five best-selling full EV models compared to a similar petrol-powered model,’ Compare The Market’s economic director David Koch said.
The biggest difference was between the popular Tesla Model Y RWD, which costs on average $3,434.98 a year to insure, and its SUV rival the Toyota RAV4 Cruiser 2WD, which costs about half that to insure at $1,744.95 a year.
For a sedan, the Tesla Model 3 RWD costs on average $3,888.55 a year to insure, while an Audi A3 costs $2,101.04.
Among the cheaper EVs to insure were, perhaps surprisingly, some of the newer Chinese models such as the Zeekr X and XPeng G6 which costs $2,043 and $2,017 a year respectively, which is in the ballpark of similar petrol SUVs.
David Koch (pictured) warned that while electric vehicles are getting cheaper to buy they on average cost much more than petrol cars to insure
Koch said electric vehicles were generally more expensive to insure because repairers were far less equipped to deal with them in comparison to traditional petrol vehicles.
‘This is because the battery pack creates more complexity for repairers, many EV-specific parts need to be imported from overseas, and there’s a skills shortage with fewer qualified smash repairers for electric cars in Australia, which contributes to delays in repairs and inconvenience for owners,’ he said.
‘In the United Kingdom, we have already seen some underwriters refuse cover for certain Chinese-made models due to an allegedly insufficient availability of parts, almost non-existent repair information, and a lack of knowledge of how the European repair market works.’
Koch said that hybrid vehicles were also more expensive to insure – about 5 per cent above comparable petrol models – but full electric vehicles were where the real difference could be seen.
He said while EVs do cost more to insure, the savings in running costs such as fuel can make up for this over time.
Koch suggested insurers could offer ‘green car’ discounts to specifically encourage buyers to take up at environmentally friendly options.
Some banks are already offering similar discounts on car loans.
Tesla has dropped the price of its Model Y (pictured) in Australia three times since March with its base model now costing just $55,900 before on-road costs – a $13,000 discount
The Electric Vehicle Council said that ‘the facts are that EVs are still cheaper to own and run than petrol cars, they reduce air pollution and they’re essential to reducing carbon emissions.
‘We need to see the EV market grow to meet our climate targets – the national Vehicle Efficiency Standard will play a vital role but there is much more that needs to be done to reduce the nation’s transport emissions.’
Australia’s New Vehicle Efficiency Standard has passed federal parliament and will be applied to new cars sold from July next year.
The standard regulates a cap for manufacturers on fuel emissions for their new cars in an effort to help reach net zero by 2050.
