Cost and range anxiety remain key barriers to consumers switching to electric vehicles, despite most people driving relatively short day-to-day distances and the cars having lower running expenses, research released by NRMA Insurance shows.

Battery fires are also a concern for potential buyers, although road-registered EVs pose no greater risk than internal combustion engines, according to the research, which aims to support increased uptake.

NRMA Insurance CEO Julie Batch says the report – Changing Gears: The Road Ahead for EV Adoption in Australia – highlights work needed to “bust myths” about range, safety and cost. 

“Even with the progress made to date, there are a significant number of Australians still hesitant about purchasing an EV due to worries about driving range and cost,” she said. “To tackle these issues, more investment and effort are needed in driver education to encourage adoption.”

EVs represent 1.5% of cars on the road that NRMA Insurance covers, and it anticipates the proportion will rise to about 9% by 2030 as the vehicles become a material part of its fleet.

Ms Batch says transportation accounts for about 21% of Australia’s greenhouse gas emissions, making it the third-largest emitter, and EVs are a key player in moving to a more sustainable future.

“We see it as really important that we try and support our customers and provide them with information that helps the transition from combustible engines to electric vehicles,” she told insuranceNEWS.com.au. “We’re looking at the trends in the customer base, looking at the concerns, and we’re trying to make sure that we’re front and centre in helping answer some of the questions.”

NRMA Insurance says it will advocate for policies that support EV adoption and will enhance its products and services to meet the needs of vehicle owners.

“We feel it’s important that we are participating, have enough vehicles on our books to know what the running costs are, have relationships with the manufacturers and start to be able to build accurate pricing for those cars,” Ms Batch said.

“This is a trend and it’s important that insurers are understanding trends across the customer base and making sure that we’re providing products and services that meet customer needs.” 

The report says overcoming barriers to “going electric” will require a sustained, collaborative effort from government, industry and consumer groups.

Recommendations include increased support for the second-hand EV market and the introduction of standardised battery testing to raise consumer confidence. The report proposes education campaigns and effective communication on charging costs and procedures, and investment in training for mechanics and modernising repair supply chains.

Affluent parents living in city centres have been early adopters, with 7% of people with children at home owning an EV, while Generation Z and Millennials are expected to embrace them as costs decline.

Currently, only three models are priced below $40,000, but the report says more affordable models are becoming available and EVs are significantly cheaper to run, including fuel savings of up to 70% and maintenance savings of about 40%.

Only 26% of Australians say they feel familiar with EVs, but about 47% are interested in learning more.

NSW Roads Minister John Graham says “a laser-like focus” on the barriers to EV take-up is needed to properly understand what’s slowing uptake.

“This new research from NRMA Insurance gives us that important information,” he said.

Changing Gears is the first instalment of a two-part report produced for NRMA Insurance by market research company Ipsos.