Lack Of Repair Data For Damaged EV Batteries Leading To Higher Insurance Costs

Thatcham Research says that insurers are forced to scrap mildly damaged EVs because they don't know if their batteries are safe.

By: Iulian Dnistran

Jul 12, 2023 at 9:39am ET

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One of the biggest hurdles faced by car insurance companies is the lack of reliable diagnostics data for EV batteries that have been involved in a crash, which oftentimes leads them to declare a mildly damaged vehicle as totaled.

According to a recent report published by British automotive risk intelligence company Thatcham Research, cited by Reuters, insurers are forced to scrap potentially functioning vehicles because they don't have access to data from manufacturers that would allow them to know for certain if a battery pack is safe to put back on the road or not.

This problem leads to much higher insurance costs for EV owners, at least in the United Kingdom, where EV-related claims are already 25.5 percent more expensive on average than internal combustion engine vehicles and take 14 percent longer to repair. And that's considering the UK’s 1.65 percent EV market share.

Furthermore, the high-voltage battery can make up as much as half of a new car's value, and can end up costing more than the car itself after a year on the road, if there's a need to replace the whole pack. This makes it uneconomic for anyone who's careful about their finances and can defeat the ecological purpose of EVs altogether.

As per Reuters, Thatcham says that in an ideal world, consumers would be able to make informed choices on whether or not a battery can be repaired and put back on the road or if a complete replacement is needed.

"The reality is that's not the situation we're in at the moment," said Adrian Watson, Thatcham's head of engineering research. "The diagnostics we have do not enable you to really know what the status of the battery is."

The environment-related issues don't stop here, however, as EVs that have been in an accident need to be quarantined before being repaired, because of the potential fire risk. Thatcham says that in the UK, damaged electric vehicles must be stored outside at least 49 feet (15 meters) from other objects, which means that an outside facility for 100 ICE vehicles would have space to safely quarantine just two EVs.

Back in March, the same Thatcham Research said that insurance premiums for battery-powered cars would continue to rise if automakers fail to provide more data on potentially damaged battery packs and affordable repair options for owners.

What do you think?

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Some car manufacturers like Ford, General Motors, and Nissan say that their EV batteries can be repaired at the module level, which is less expensive than replacing the entire pack. At the same time, Tesla doesn't repair modules or battery packs and instead only offers full-pack replacements.

As always, we'd like to know what you think about this, so head over to the comments section below to give us your thoughts.

Source: Thatcham Research via Reuters