Is insurance ready for the electric vehicle boom?

Not since Holden's best-ever month - 17,120 vehicles in June 2003, according to VFACTS historical data - has a brand other than Toyota sold so many cars in a single month. In June 2026, BYD did 18,881. Tesla, in the same month, set its own record at 8,670 - beating the previous high of 6,433 from only a month earlier.

These are the numbers that frame everything that follows because all those cars need insurance and the Australian insurance market is not quite ready for them. 

For example, there's a basic data deficit problem facing EV underwriters.

"We don't have any data on the new makes and models, so we don't know how expensive they are to repair," said Tom Hall (pictured right), a specialist motor underwriter. "That poses a challenge."

Broker Anthony Saunders (pictured left), partnership director for EnviroSure at Gow-Gates Insurance Australasia, said another issue facing the market is the long term viability of some EV firms.

"There are about 16 electric car manufacturers in China alone and a number have already gone bust so are we certain that when we need a repair they will still be around?" Saunders told Insurance Business. 

Hall echoed these concerns from another angle.

"We're seeing a large wave of new manufacturers entering the Australian space and a large amount of these happen to be Chinese manufacturers who don't have any established footprint in Australia which causes problems for us," said Hall. He recalled the issues when Tesla first released cars in Australia and insurers had serious problems with parts availability and approved repair networks.

But few in the industrty are doubting the impact of this surge in EV sales. The figures even caused Saunders to look ahead to a  not too distant future when all Australians own EVs. If that happended today, insurance firms wouldn't be the only ones unprepared.

"If everyone switched over to electric now, the grid would go down," he said.

Read next: The man who built a career on small bets is placing a big one on Santa Monica

BYD's chief operating officer for Australia and New Zealand, Stephen Collins, said much of this June surge reflected orders placed during the March fuel crisis, when national average retail petrol prices peaked at a record $2.53 per litre. The government's fuel excise cut expired at the end of June. The cars arrived anyway.

NRMA Insurance reported that EV insurance quote requests in April 2026 were up 121% compared with April 2025. In May, South Australia recorded a 114% year-on-year increase in quote activity, New South Wales 67%. These are not curiosity numbers. They are what happens when a fleet grows faster than the infrastructure priced to support it.

Premiums are up but the picture is uneven

Compare the Market's latest electric vehicle insurance index shows that average comprehensive premiums for battery electric vehicles rose 10.2% in the 12 months to March 2026, reaching approximately $2,300 a year. Hybrid and plug-in hybrid models rose 6.6% over the same period, to around $1,700.

The model-level data is more interesting than the averages. The Xpeng G6 Standard Range and Toyota bZ4X 2WD each rose 24%. The Zeekr X RWD was up 19%. The BMW iX1 eDrive20, 11%. The MG4 Excite 51 fell 4%. Models with established repair networks are starting to see competitive pricing. Newer or rarer vehicles are still carrying a premium for the unknown.

David Koch, economic director at Compare the Market, said: "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."

There is also a perception gap making things worse. Youi research found that 56% of Australians believe EVs carry the highest insurance premiums - while the insurer's own quoting data shows EV costs often fall within the same initial range as regular vehicles before individual circumstances are applied. Marni Jackson, Youi's head of product for vehicle and leisure, called it "a lot of misinformation out there."

The structural pressures keeping premiums high

The Insurance Council of Australia (ICA) puts 60% of claims-related expenses in labour and parts - the area where EVs reliably cost more.

NRMA Insurance's Changing Gears report found that only around 10% of local technicians were certified to repair EVs in 2023. That shortfall matters more as the fleet grows. BEVs were 11.8% of new vehicle registrations in February 2026. After June, that figure heads higher.

Battery fires are a specific underwriting headache. Lithium-ion batteries can reignite after suppression, producing fire risk profiles that differ substantially from petrol vehicles - particularly in enclosed spaces. Shopping centres, workplaces and apartment buildings are all installing charging equipment. Each one adds liability exposure that underwriters are still learning to price.

QBE has flagged the cyber dimension too: EVs and their charging systems rely on digital infrastructure in ways that standard motor policies were not built to cover.

Not a spike

The June sales numbers were partly a release of pent-up demand from the fuel shock. But the people running the businesses involved are not describing it that way.

Rohan Martin, chief executive of the National Automotive Leasing and Salary Packaging Association, called it a step change: "A lot of consumers who I suppose were sitting on the sidelines and maybe thought about an EV, but now with the ongoing cost-of-living challenges, which were highlighted by the fuel crisis, have made the decision."

Collins put it plainly: "I think it's a remarkable number, and it really shows that new-energy vehicles are mainstream now."

Shawn Ticehurst, head of automotive research at NRMA Insurance, pointed out that two years ago only 20% of Australians planning to buy a car were considering an EV. "Today, with more than 100 EV models now available across every major price tier, a growing second-hand market, rising confidence in charging infrastructure, and repair capability, those concerns are fading fast," he said.

The used market confirms it. Chris Shaw at Pickles, Australia's largest online vehicle auction platform, said demand stayed well above benchmarks even as supply increased. "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."

Read next: Electric and hybrid premiums up as Aussie drivers exit petrol

The government's fringe benefit tax exemption and new vehicle efficiency standards are policy settings, not short-term interventions. BYD redirecting its car-carrying ship, the BYD Zhengzhou, to fulfil Australian orders was a supply decision based on forward demand, not a promotion.

What the insurance market is doing about it

Zurich Australia has a preferred insurer arrangement with Tesla. KOBA Insurance has launched a telematics-based product for EVs, with chief executive Andrew Wong arguing that traditional pricing - built around who the driver is rather than how they drive - misses the data advantages EVs make available.

Youi's data shows EV insurance quotes grew from 0.66% of all quotes in 2021 to 2.78% in 2025. In a market where BYD just moved 18,881 vehicles in a single month, 2.78% will not hold.

Premiums are often higher than for petrol equivalents and they went up again in the past year. The reasons are structural - repair capacity, technician training, parts availability, battery risk - and they are improving more slowly than the fleet is growing. More data, more competition and more certified technicians will eventually close the gap. The question for brokers and underwriters is how long that takes.