David Koch reveals electric vehicles cost significantly more to insure than petrol cars
- Electric vehicles in Australia are projected to reach record sales of 100,000 this year.
- Insurance premiums for EVs can be significantly higher, with an average of 43 percent more than petrol cars.
- Higher repair complexity and a lack of trained professionals contribute to the elevated costs associated with insuring EVs.
In Australia, electric vehicles (EVs) are becoming increasingly popular, with projections of hitting a record 100,000 sales this year according to the Electric Vehicle Council. However, finance expert David Koch highlighted a significant issue regarding the cost of insurance for EVs compared to petrol vehicles, with data indicating that EVs can cost up to 43 percent more to insure. The research noted that the insurance premiums for five of the best-selling EV models were compared with similar petrol models, revealing that the most notable differences in insurance costs can reach as much as 97 percent. Koch emphasized the reasons behind the higher insurance costs for EVs, pointing to the complexities associated with repairs, the need for specialized parts, and a lack of trained professionals qualified to handle electric vehicle repairs in Australia. He further commented on the situation in the United Kingdom, where underwriters have begun to refuse coverage for certain EV models due to insufficient parts availability and repair knowledge. He mentioned that while hybrid cars also face higher insurance costs, EVs experience the most significant financial burden in this regard. Despite the higher insurance premiums, there are savings in operational costs, such as lower fuel expenses, which could balance out the initial higher costs. Koch suggested that insurers could introduce 'green car' discounts to incentivize environmentally friendly purchasing decisions. The Electric Vehicle Council maintained that EVs are still more economical to own and contribute positively to reducing emissions, underscoring the importance of promoting this market further to meet climate targets. The Australian government has initiated the New Vehicle Efficiency Standard, set to take effect from July next year, which will impose restrictions on fuel emissions from new vehicles. This move is expected to play a critical role in lowering transport emissions and aiding the transition towards a greener future, aligning with the country's goal of achieving net-zero emissions by 2050.