David Koch sounds alarm over major EV problem – and why petrol cars are better
David Koch has warned that the cost of insuring and repairing electric cars will skyrocket compared to petrol cars, as electric cars become increasingly popular in Australia.
Chinese-made electric cars have entered the market alongside established brands like Tesla and driven down costs. According to the Electric Vehicle Council, the country is on track to achieve record sales of 100,000 EVs this year.
The showroom price may be enough to convince buyers to make an environmentally friendly choice, but in the long run electric cars could burn a chunk into their owner’s pockets, with the average EV costing 43 percent more to insure than a petrol car.
Data from Compare the Market looked at the insurance premiums of the five most popular electric cars alongside comparable petrol models from Toyota, Audi, Hyundai and Mazda, using the example of the 34-year-old Brisbane man with a good driving record.
“On average across twelve insurers surveyed, it is somewhere between seven and 97 percent more expensive to cover the five best-selling fully electric models compared to a comparable petrol model,” said Compare the Market economic director David Koch.
The biggest difference was between the popular Tesla Model Y RWD, which costs an average of $3,434.98 per year to insure, and its SUV rival, the Toyota RAV4 Cruiser 2WD, which cost about half as much to insure, at $1,744. 95 per year.
For a sedan, the Tesla Model 3 RWD costs an average of $3,888.55 per 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
David Koch (pictured) warned that while electric vehicles are becoming cheaper to buy, they cost much more on average than petrol cars to insure
Koch said electric vehicles are generally more expensive to insure because repairers are much less equipped to handle them compared to traditional gasoline vehicles.
‘This is because the battery pack creates more complexity for repairers, many EV-specific parts need to be imported from overseas and there is a skills shortage with fewer qualified EV repairers in Australia, contributing to repair delays and inconvenience for owners,” he said.
‘In the UK we have already seen some insurers deny cover for certain Chinese-made models due to perceived insufficient parts availability, virtually non-existent repair information and a lack of knowledge about how the European repair market works.’
Koch said hybrid vehicles are also more expensive to insure – about 5 percent above comparable petrol models – but fully electric vehicles were where the real difference was seen.
He said while electric vehicle insurance is more expensive, the savings on operating costs, such as fuel, can make up for that over time.
Koch suggested that insurers could offer “green car” rebates to specifically encourage buyers to choose environmentally friendly options.
Some banks already offer similar discounts on car loans.
Tesla has slashed the price of its Model Y (pictured) in Australia three times since March, with the base model now costing just $55,900 before on-road costs – a discount of $13,000
The Electric Vehicle Council said that ‘the facts are that electric cars are still cheaper to own and run than petrol cars, they reduce air pollution and are essential for cutting CO2 emissions.
‘We need to see the EV market grow to meet our climate targets – the National Vehicle Efficiency Standard will play a crucial role, but much more needs to be done to reduce the country’s transport emissions.’
Australia’s New Vehicle Efficiency Standard has been passed by Federal Parliament and will be applied to new cars sold from July next year.
The standard regulates a cap for manufacturers on the fuel emissions of their new cars, in an effort to reach net zero emissions by 2050.