Electric vehicles are 25% more expensive to fix than petrol cars

Mainstream electric car adoption faces another major stumbling block as battery vehicles are more expensive to repair, take longer to fix and are more commonly written off as a result of damage to their batteries.

And it means the cost to insure them will likely rise as more claims are made, according to a new industry report published today.

Comparisons with petrol and diesel cars found that electric vehicle (EV) claims are 25.5 per cent more expensive – and the damage takes 14 per cent longer to repair, if it can be fixed at all.

Automotive risk intelligence company Thatcham Research warns it could have ‘significant implications’ for motor insurers, premiums and consumer acceptance of EVs.

A new report has highlighted the higher cost to repair electric cars after they’ve sustained damage in a collision – and insurers are more likely to write them off as a result of expensive battery replacement costs

LV provided this snapshot of 2022 motor claims comparing the cost to fix an internal combustion engine (ICE) petrol or diesel cars and battery electric vehicles (BEV)

High cost of repairing and replacing batteries means EVs are more commonly written off

Despite electric cars commonly featuring the latest in advanced driver assistance systems and passive safety technologies, many are still involved in accidents that result in insurance claims.

And the Impact of BEV [Battery Electric Vehicle] Adoption on the Repair and Insurance Sectors report published on Wednesday – which was funded by Innovate UK, the government’s innovation agency – says that road collisions involving an electric car are often ‘catastrophic for the vehicle’.

This is because of a ‘concerning lack of affordable or available repair solutions and post-accident diagnostics’, which often sees EVs written off as uneconomical to be returned to the road.

This is most commonly the case if the high-voltage battery pack has sustained damage as a result of a collision.

Batteries in electric cars represent a substantial percentage of the original vehicle value and if harmed in anyway often sees insurers deem the cost to repair or replace them exceed the car’s total existing value.

Thatcham Research showed the impact of a low severity impact on a Tesla and the damage it can cause to the battery casing, which would then need to be repaired or replaced

The casing – in which the batteries are stored – often have a wide structure, making them vulnerable particularly to side-on collisions

The report highlights that the cost of replacement EV batteries varies widely depending on the model – though it is extremely expensive process no matter the car in question.

For a premium electric car, for instance, the cost of a new battery is around £29,500, Thatcham Research says. This is more than the price of a new petrol Volkswagen T-Roc SUV.

And for ‘budget-friendly’ electric models, it estimates the average cost of battery replacement to be £14,200 – that’s more than a Dacia Sandero, Britain’s cheapest car.

Thatcham Research’s findings echo another investigation into EV write-offs conducted earlier this year by news agency Reuters.

It found that electric cars are being written-off for having the slightest damage to battery packs following accidents because there is no way of repairing them.

It said insurance companies are increasingly being left with little to no choice but to permanently take the cars off the road after minor collisions, which in turn is pushing premiums on EVs higher.

The report warns of scratched and mildly damaged battery packs ‘piling up in scrapyards in some countries’.

And experts claimed batteries in expensive Tesla Y SUVs have ‘zero reparability’ because they are a structural part of the car.

This chart shows the electric vehicle and high voltage battery repairs as a proportion of total repairs

Plummeting EV values is making write-offs more common

Write-offs are also becoming more common due to the increasing ‘depreciation curve’ of used electric cars, which have plummeted in value since the end of 2022 as a result of declining consumer demand.

This means the cost of a replacement battery is often more than the used price of the vehicle after only one year of it being on the road, the report said. 

Thatcham Research’s investigation found that in 2022 some 9,400 vehicles were potentially involved in collisions that resulted in battery damage that required a repair or replacement.

And this figure is estimated to reach up to 260,000 vehicles annually by 2035 – some five years after the government intends to outlaw the sale of new petrol and diesel models and push drivers towards EVs.

As a result, the higher likelihood of write offs means insurers will have to pass on these increasing costs to customers via more expensive premiums. 

‘Without meaningful change, there is a strong likelihood that claims costs will continue to rise disproportionally,’ says Adrian Watson, head of engineering research, Thatcham Research.

‘Much of the motor insurance industry is yet to adapt to mass BEV adoption challenges, and the implications remain unquantified on repair capacity, training and skills, cost, and the lifetime sustainability of BEVs. 

‘This lack of awareness means many BEVs are often deemed irreparable, leading to premature write-offs because of high battery cost and the lack of value the UK ecosystem can recover from them.’

Watson added: ‘These cost increases present a significant risk to BEV uptake, reducing potential economic and sustainability gains. 

‘Technical solutions do exist for most if not all of these challenges. However, it is vital that credible cross-industry plans are urgently put into place that focus on addressing battery cost, diagnostics, and the creation of a sustainable ecosystem for battery repair.’

Damaged electric cars also pose a major storage issue

Another headache faced by the vehicle repair sector is centred around the legality of storing damaged EVs safely.

Government guidelines state that due to fire risk, electric cars awaiting repair should be stored in an outside quarantine area and at a safe distance of 15 metres from other nearby objects. 

As such, an outside storage space with capacity for 100 combustion-engine vehicles would allow for the safe quarantine of just two EVs, representing a potential 98 per cent reduction in repair capacity. 

The cost incurred through following recommended quarantine protocols of 48 hours will also add a minimum of £60 to every claim, the report states.

If the vehicle cannot be safely stored at the repair centre there will be further costs associated with transportation to and from an alternative location, storage at the alternative location, along with a longer duration of a hire vehicle being allocated to the EV owner.

‘This could result in a measurable rise in associated claim cost and duration, negatively impacting on the BEV ownership experience,’ Watson says.

Government guidelines state that due to fire risk, electric awaiting repair should be stored in an outside quarantine area, at a safe distance of 15 metres from other nearby objects. This poses a huge issue to garages with sites unable to meet this requirement

Jonathan Fong, senior policy adviser at the Association of British Insurers said: ‘As with any new technology, there will be factors that need to be worked through, including a host of considerations in the insurance and vehicle repair supply chains.

‘We’ve been calling for more investment in training and reskilling automotive technicians to help develop a robust and independent repair network that can cope with an increasingly electrified fleet.’

The report comes after the Institute of the Motor Industry (IMI) warned that Britain will have a lack of technicians to carry out repairs and maintenance on EVs by the end of the decade.

The IMI estimates that by 2026 electric car ownership will begin to exceed the number of qualified mechanics and technicians to service and maintain them

It says growing adoption of EVs is set to outpace the repair infrastructure well before 2030.

In January 2023, the IMI says roughly 16 per cent of technicians in the UK that are qualified to work on electrified cars. 

However, there is set to be a major skills gap in terms of those with the highest qualification to work on high voltage batteries. 

They have predicted this will become a significant concern around 2026 and that by 2030, this skills gap will have grown to a shortfall of 35,700 mechanics. 

Also responding to Thatcham Research’s report, Chris Payne, head of networks and engineering at insurer LV=, said: ‘As one of the major insurers in the UK we’re working hard to find solutions to some of the current challenges around EVs. This includes upskilling the next generation of technicians and redesigning and developing our new and existing repair sites. 

‘As an industry we also need to ensure there is collaboration between insurers, car manufactures, salvage agents, repairers and the entire supply chain. 

‘This will ultimately help us work towards a combined goal that enables the latest vehicle technology to be repaired safely, and efficiently with the right skills, tooling and equipment to ensure we meet the needs of the future.’

This post first appeared on Dailymail.co.uk