EV Revolution Shifts Gears

Almost one-in-four new cars sold in September 2026 were battery electric vehicles (EVs), with EVs accounting for 24.2% of the market, up from 11.3% a year earlier. Plug-in hybrid sales rose 122.7% year-on-year, while hybrid sales increased 20.7%, highlighting Australians’ growing appetite for electrified vehicles.*

The cheapest electric vehicle (EV) now costs from $19,990 before on-road costs.**

But while EV demand has surged, there’s one catch consumers need to look out for: insurance.

According to Compare the Market’s electric vehicle insurance index, the cost to comprehensively insure a full battery-electric vehicle has increased 10.2% on average, while hybrid models experienced a 6.6% average jump during the same 12 months.

Insuring a full EV costs about 35% more than a hybrid on average, with quotes sitting at around $2,300 per year versus $1,700.

^{*Source: Federal Chamber of Automotive Industries. **BYD Atto 1 Essential as at 16 October 2026.}

Average quoted EV premiums

With the price gap between models narrowing, hybrid and electric vehicles are becoming a more accessible choice for some Australians.

To understand how much it can cost to keep a car on the road in Australia today, Compare the Market examined the running costs of three popular medium SUV models: a petrol Mitsubishi Outlander, a hybrid Toyota RAV4 and a fully electric BYD Sealion 7.

The EV was the cheapest to run, costing about $2,600 less per year than the petrol model. This was driven by several factors, including a reduced EV loan interest rate and significantly lower charging costs. EV energy plans can help keep charging costs to a minimum, while EV owners may also benefit from cheaper registration costs.

However, the figures assume an EV is charged using a wall box charger to take advantage of ultra-low overnight energy tariffs offered by some retailers, averaging just 6 cents per kilowatt-hour (kWh). Purchasing and installing a wall box charger could initially cost hundreds, if not thousands, of dollars, depending on the property.

Meanwhile, the hybrid vehicle also delivered significant running-cost savings, with its claimed fuel efficiency enabling owners to cut their annual petrol spend by almost $1,000 compared to a petrol-only model, assuming they drive 15,000 kilometres a year and pay an average fuel price of $1.84 per litre.

With the price gap between these models narrowing, hybrid and electric vehicles may no longer feel as out of reach for some Australians. And with petrol and diesel prices still exposed to global shocks, lower running costs could make the switch more compelling for drivers who can make an EV work for their circumstances.

Annual car running costs

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