The Middle East crisis is causing car buyers to rethink barriers that previously made them nervous about electric vehicles, and the insurance industry is keeping an eye on long-term implications. 

Figures from the Federal Chamber of Automotive Industries and the Electric Vehicle Council show 15,839 battery electric vehicles (BEVs) were sold last month. 

They represented 14.6% of new car sales, nearly double their share in March last year, and accounted for 11.8% of sales for the year to date. 

NRMA Insurance head of automotive research Shawn Ticehurst says global price shocks have historically created catalysts for long‑term behavioural change. 

“It’s clear consumer sentiment towards EVs is shifting,” Mr Ticehurst said.

“NRMA Insurance is seeing a clear spike in the number of Australian drivers looking to EVs amid the most significant oil price shock in decades and ongoing concerns about petrol supply.” 

A 2024 NRMA Insurance report found the biggest barriers to adoption included driving range, recharging time, affordability, lack of public charging stations, how many years a battery would be useful, fire risk, overall ownership costs, inability to charge at home and performance relative to petrol and diesel engines. 

But choices are widening for buyers, and infrastructure is expanding. 

Treasurer Jim Chalmers said in December there were more than 160 EV types on the market, with about 10 costing less than $40,000 and one model under $30,000. 

The NSW government last week updated its electric vehicle strategy, which includes $100 million directed partly at boosting the fast-charging network in regional, remote and suburban “blackspots” and rolling out more kerbside infrastructure to help drivers who cannot charge at home, including apartment residents. 

Federal Chamber of Automotive Industries CEO Tony Weber says sales growth may reflect short-term influences and it is too early to know if the figures represent a structural shift in the market.

A federal government review of tax concessions that have applied for the vehicles since 2022 is another uncertainty. 

“More consumers are considering EVs due to the disruption to fuel supply caused by conflict in the Middle East, along with the review into the fringe benefits tax concession for EVs,” Mr Weber said. 

The National Automotive Leasing and Salary Packaging Association says the fuel crisis has “undoubtedly sparked unprecedented new interest in both new and used EVs”, adding to incentives provided by the government electric car discount. 

"Since early March, our members have been inundated with enquiries about novated leasing and the electric car discount,” CEO Rohan Martin said. “They're telling us that March was their strongest month for battery electric vehicle orders, and for many, BEVs made up the majority of leases, compared to around half in a typical month.” 

Heightened demand has come from workers living in outer-city and regional areas that are hard hit by rising fuel costs, given longer commutes. 

Australia has to date lagged key overseas markets in take-up of electric vehicles. 

According to the International Energy Agency, the global number of battery electric and plug-in hybrid vehicles increased from 3 million in 2020 to more than 17 million in 2024, making up more than 20% of all new light vehicle sales. 

In Norway, more than 90% of new passenger vehicle sales were EVs. Globally, more than half of new EVs are sold in China, and almost one in six new EVs is bought in Europe, the NSW strategy document says. 

EVs carry different complexities and risks for insurers, including around supply and repair chain impacts.

The outlook for Middle East fuel supplies remains unclear and it is too soon to know if high petrol prices will lead to a purchasing trend tipping point, but figures this year are being closely watched.

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