Australian motorists are shifting away from petrol-powered vehicles at a pace that is registering across the insurance market. New NRMA Insurance data shows EV insurance quote requests rose 95% in 2026 and 60% compared to May 2025, with the insurer pointing to fuel price volatility and an expanding EV model range as the primary drivers.
Shawn Ticehurst, head of automotive research at NRMA Insurance, pointed to fuel costs and a broader EV model expansion as central factors. “Fuel price volatility linked to geopolitical tensions in the Middle East highlighted both the cost pressures and petrol supply uncertainty associated with traditional vehicles. At the same time, the EV market has matured significantly. There are now over 100 different models available across every major price tier, making EVs a viable option for more Australians than ever before. Together, these dynamics are flowing through to insurance demand. At NRMA Insurance we’ve seen quotes for EV insurance effectively double in 2026, reflecting a clear structural shift in how Australians are now thinking about EVs,” Ticehurst said.
State-level figures showed variation in the pace of that demand growth. South Australia recorded a 114% year-on-year increase in EV insurance quote requests in May, while New South Wales posted a 67% rise over the same period. Sales data corroborates the insurance trend. Figures from the Federal Chamber of Automotive Industries (FCAI) and the Electric Vehicle Council showed pure EV sales were up approximately 89% year-on-year in March 2026. For the first time, combined electrified vehicle deliveries – spanning full battery-electric, plug-in hybrid, and hybrid models – outpaced petrol-powered car sales in the same month.
Ticehurst also noted movement at the other end of the market, where historically dominant vehicle categories are losing ground. “As Australians look more closely at the ongoing costs of running a car, it’s interesting to see traditional favourites like large diesel utes starting to lose some appeal as fuel prices bite,” Ticehurst said. Federal Chamber of Automotive Industries data showed several top-selling diesel utes and large SUVs recorded year-on-year sales declines.
Demand is not confined to new vehicles. The used EV market has maintained momentum through the first half of 2026, according to data from Pickles, Australia’s largest online vehicle auction platform. Chris Shaw, general manager motor vehicles at Pickles, said activity levels remained well above earlier benchmarks despite an increase in available stock. “Following a strong uplift in March – including a 163% surge in EV-related searches and peak auction clearance rates of 100% – the used EV market continued to show sustained buyer demand through April and May. In May, EV-related searches on Pickles remained approximately 46% higher than February levels, while EV clearance rates continued to sit around the 70% mark despite increased market supply,” Shaw said.
The variety of models transacting through the platform has also widened, with more than 60 different EV models sold through Pickles in the past six months. Ticehurst attributed part of the used market’s momentum to improvements in how battery condition is assessed and communicated to buyers. “The introduction of independent battery testing, alongside increased awareness of battery safety and improved longevity, is helping to remove uncertainty for buyers,” Ticehurst said. The current landscape contrasts with findings from NRMA Insurance’s Changing Gears report published two years prior, which found only 20% of Australians intending to purchase a vehicle within five years were open to an EV. At that time, upfront purchase costs, range anxiety, and charging infrastructure were the barriers most frequently cited.
Within the IAG group – which operates motor insurance brands including NRMA Insurance, RACQ, RACV, WFI, CGU, and ROLLiN’ – EVs account for approximately 2% of motor policies. The group projects that figure will reach 10% by 2030. Tesla vehicles currently represent 60% of the battery-electric policies IAG holds, though the company noted that BYD, MG, Hyundai, and BMW are among the brands recording growth within its book. Separately, CSIRO modelling projects that the majority of vehicles on Australian roads will be electric by 2050.
As EV penetration grows, so too does the cost of insuring them. Data from Compare the Market’s electric vehicle insurance index – drawing on quotes across 11 insurers and six underwriters – found that average comprehensive premiums for battery-electric vehicles increased 10.2% over the 12 months to March 2026, reaching approximately $2,300. Hybrid and plug-in hybrid models recorded a 6.6% average increase over the same period, with average quoted premiums sitting at around $1,700.
David Koch, economic director at Compare the Market, said the cost trajectory reflects ongoing pressures specific to electric vehicle repairs. “The rising cost of labour and parts continue to push premiums higher, and this particularly affects electric cars due to battery replacement costs and the specialised training needed for repairs. With new models and more data coming to hand, you would expect prices to stabilise over time. Unfortunately, we have not seen this happen,” Koch said. The data collectively points to a market undergoing a fundamental change in its risk composition – one that is likely to accelerate as fleet electrification continues across both the new and used vehicle segments.
