While they might be the new kids in the automotive block, electric cars are starting to become a permanent mainstay on Australian roads.
As reported by Drive in January 2025, 103,270 new battery-powered cars, SUVs and light commercial vehicles were reported as sold last year, accounting for 8.3 per cent of Australia’s new car market in 2025.
And while US electric pioneer Tesla remains the country’s top leader in EV sales, it’s monopoly over Australia’s electric market is slowly being eroded by an influx of new competitors – predominantly from China – looking to establish an economic foothold in a race to the bottom of the pricing pyramid.
According to new data by Youi Insurance, 46 per cent of all EV insurance quotes in 2025 were for the Tesla Model Y electric SUV – the best-selling electric car by volume in 2025 – and the Model 3 sedan.
While significant, insurance quotes on Tesla's are down by 13 per cent in comparison to 2024 (59 per cent), and well under the marque's 80 per cent market share in 2021.
In contrast, the insurer said Chinese electric cars are surging in the insurance market, with 2025 Youi data revealing that EV quotes from Chinese manufacturers surged to 33 per cent last year, up 10 per cent from 2024.
BYD was the biggest challenger to Tesla’s Youi insurance monopoly, with the Atto 3 and Sealion 7 electric SUVs, as well as the battery-powered Seal sedan among the most quoted cars.
Though the insurer said electric car quotes reached 2.9 per cent in 2025 – up 9 per cent year on year – experts forecast EV insurance pricing to remain high despite retail pricing coming down.
Henry Man, a spokesperson for insurance comparison website Compare the Market said Australians considering an EV this year should consider insurance costs as an important metric.
“While the purchase price of electric vehicles has dramatically come down in. recent years – now below the $30k barrier – the cost of insuring one hasn’t followed the same path. It’s a key running cost consideration Australians should be looking out for,” Man told Drive.
According to Compare the Market’s EV Insurance Index, over a six-month period, the average price for electric car quotes were $2126. In comparison, electrified models – such as hybrids and plug-in hybrids– were slightly cheaper, with the average comprehensive insurance quotes for these vehicles sitting at $1623.
Meanwhile, Taylor Blackburn, a personal finance and insurance expert at Finder, said despite EVs typically costing more to insure, some affordable models are generally cheaper to cover in comparison to other petrol cars.
“A budget EV, like a BYD Dolphin, can cost less to cover than a Toyota RAV4 Hybrid due to the overall cost and value of the vehicle,” Blackburn told Drive.
However, experts cited high repair costs and a lack of qualified mechanics as key reasons why EV insurance remain high in Australia.
“One reason that could be behind higher premiums [for EVs] is the cost of repair. The EV repairers might need to invest in new expensive equipment and upskilling in order to handle high-voltage electrical components, which might be passed onto consumers,” Man from Compare the Market told Drive.
An electric car’s battery is a key reason why insurance rates on these cars can be costly.
According to Blackburn, “EV batteries are integrated into the chassis, so even a moderate smash can damage the battery casing.”
“In 2026, it’s still often cheaper for an insurer to write off the car than to attempt a battery repair or replacement. As a result, insurers price their premiums to cover the high probability of a total write-off for minor accidents,” he told Drive.
With the exception of Tesla, experts said fledgling EV brands generally have higher insurance quotes due to the lack of a consistent parts supply and repair chain.
“While new entrants like BYD, MG GWM, and Chery are often cheaper to buy, they aren’t always the cheapest to insure,” Blackburn said.
“Legacy brands often have access to cheaper parts and service, whilst newer EVs may require a mechanic with specialty training depending on the issue,” he told Drive.
Ethan Cardinal graduated with a Journalism degree in 2020 from La Trobe University and has been working in the fashion industry as a freelance writer prior to joining Drive in 2023. Ethan greatly enjoys investigating and reporting on the cross sections between automotive, lifestyle and culture. Ethan relishes the opportunity to explore how deep cars are intertwined within different industries and how they could affect both casual readers and car enthusiasts.
