New study to assess crash repair costs of EVs

A new UK government-funded research project is assessing the crash repair costs of electric vehicles and their impact on insurance claims and premiums.

Insurance for the first wave of EVs has typically been higher – LeasePlan suggests 12% higher – than vehicles with internal combustion engines.

This is due to the higher costs of specialist replacement parts, higher labour rates for repairers trained to fix EVs, delays in parts availability that have inflated replacement vehicle costs, and the greater risk of EVs being written off by insurers if expensive batteries need to be replaced.

50% total loss

Figures published by CCC Intelligent Solutions last year showed that 50% of EV claims where a battery replacement was necessary were deemed total loss. CCC’s research also revealed that the average repair cost for a small, non-luxury EV involved in a frontal impact was 26.6% higher than for an ICE equivalent, and this differential increased to 53.3% when comparing repair costs between electric and ICE small, luxury SUVs.

Much of this differential is due to the construction of EVs, which make much greater use of more expensive lightweight materials, such as aluminium and carbon fibre, as well as their design, which requires them to disspiate collision energy differently because they have no engine in the front to absorb the impact.

Charging risks

Charging brings additional risks to EV insurance considerations, such as third-party liability if someone trips over a cable and injure themselves while a vehicle is plugged in, as well as extra insurance cover required for charging cables, connectors and electric wall boxes.

The new five-month research project will be led by Thatcham Research and LV= General Insurance, one of the largest insurers of electric cars in the UK, and part of the Allianz Group. The study is being funded by Innovate UK, a public body financed by the UK Government.

Adrian Watson, head of engineering, Thatcham Research said: “In many circumstances, EV accident repair is no different from ICE vehicles. But under the hood lie everyday essentials, such as safe, cost-effective, timely post-accident repair, and the surrounding claims process so critical to putting any new vehicle on the road. And nowhere is the difference between EV and ICE more clearly underlined than in the insurance claim chain.”

The study will use real-world claims data to support its modelling.

Best practice EV repair

Chris Payne, head of networks and engineering at LV=, said the insurance industry had to find: “The best way to repair EVs and their batteries, rather than writing them off. This will not only have a positive impact on claims costs, but will also feed a healthy second-hand EV market.”

Vehicle salvage and recycling company SYNETIQ will also be involved in the project, concentrating on opportunities to re-use as much of crash-damaged vehicles as possible, with a particular focus on finding a second-life for their batteries.

Tests conducted by the Allianz Center for Technology Automotive have found that OEM designs have succeeded in protecting the high voltage components of EVs in the event of a crash, but warn that if the battery has to be replaced in can lead to a total loss.

Moreover, while the fact that EVs are proving to have lower service and maintenance costs due to fewer moving parts, this also means that their components are more integrated – Allianz said that what may have been three parts in a conventional car could be only one part in an EV - and more connected to in-vehicle sensors, which makes replacement more expensive and more time-consuming.

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