Higher insurance costs a factor in Canadians’ hesitation to buy EVs

Higher insurance costs are one reason why Canadians are hesitant to buy electric vehicles (EVs), even as Canada’s zero-emission vehicle (ZEV) mandate of 2035 draws closer, per a new Leger survey commissioned by Rates.ca.

Thirty-one per cent of Canadians surveyed declared an interest in buying an EV, while 49% did not. ZEV 2025 Q1 registrations were down to just 8.7% — well below the 20% target for 2026.

Only 17% of 1,593 Canadians surveyed in an online poll in April 2025 declared an interest in purchasing an EV within the next five years.

Forty-nine per cent of Canadians surveyed said they aren’t interested in purchasing an EV at the moment, while nearly one-third (32%) said they have no plans for EV ownership, ever.

“While EVs were once seen as an inevitable next step, consumer confidence has shifted, with many Canadians hesitant due to concerns over affordability, evolving insurance considerations, and uncertainty around the long-term costs of ownership,” Rates.ca comments on the study results. “This hesitation shows why broader adoption may lag without more stable pricing, robust infrastructure, and clearer [public] policy direction [from governments].”

Forty-two per cent of Canadians surveyed cited the cost of EV repair and maintenance as major concern, with 21% concerned specifically about insurance expenses.

“Rates.ca quoter data shows in Q1 2025, non-EV insurance premiums rose 7.8% year-over-year, while EV premiums surged by 18.9%, nearly 20%,” a report on the survey results states.

Specifically, concern about insurance premiums for EVs varies by age groups. For example, 29% of people between 18 and 34 years old cite insurance costs for EVs as a concern, while only 17% of people 35 and older say they are concerned about EV insurance costs.

The study found Canadians between 18 and 34 years old are the largest group of potential EV buyers, making up 41% of those interested in buying an EV.

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In a report on its findings, Rates.ca gives an example of how much it might cost to insure a Tesla Cybertruck Beast Crew Cab AWD.

“Insuring one in Toronto will set you back about $496/month or $5,952/year in premiums,” the report says. The quote assumes a 35-year-old male driver in Toronto with a clean driving record, no traffic violations, and includes both comprehensive and collision coverage.

Rates.ca notes claims costs for insurers are higher for EVs in part because of the importance of batteries in EVs. Damaged batteries are expensive to repair and will often result in total losses for the insurer, the report says, citing Niel Hiscox, CEO of the automotive research firm Clarify Group Inc. and publisher of Canadian Auto Dealer magazine.

“One reason EVs often cost more to repair — and subsequently, to insure — is because fixing battery damage is so expensive,” says Hiscox. “And even minor collisions can damage the battery, which can cost tens of thousands of dollars to replace.

“This differs from gas-powered cars (ICE vehicles), where no single part makes up such a big chunk of the car’s value.”

For example, a Vancouver diver was shocked to learn that small damage to his car’s battery cost $60,000 to fix — more than a new car.

“From an insurance view, EVs are more likely to be totalled because repairs cost so much, often reaching 60 to 70% of the car’s value,” Hiscox says. “When this threshold is surpassed, the vehicle is often deemed a total loss.”

He adds Canada still doesn’t have enough body shops certified to repair EVs.