A recent report by Thatcham Research, a British automotive risk intelligence company, highlighted this issue. Insurers are compelled to scrap potentially functional vehicles because they lack access to manufacturer data that would confirm whether a battery pack is safe to be reused on the road.
This problem significantly drives up insurance costs for EV owners, particularly in the United Kingdom. EV-related claims are already 25.5% more expensive on average compared to claims for internal combustion engine vehicles, and they take 14% longer to repair. It is worth noting that EVs currently account for only 1.65% of the UK market.
Moreover, high-voltage batteries can represent up to half of a new car’s value and may cost more than the entire vehicle itself to replace within a year of usage. This economic aspect deters financially conscious individuals and undermines the environmental purpose of EVs.
Thatcham said that in an ideal scenario, consumers would have access to reliable information to make informed decisions about whether a battery can be repaired and reused, or if a complete replacement is necessary.
Adrian Watson, Thatcham’s head of engineering research, stated, “The reality is that’s not the situation we’re in at the moment. The diagnostics we have do not enable you to really know what the status of the battery is.”
The environmental concerns associated with damaged EVs extend beyond the lack of repair data. These vehicles must be quarantined after accidents due to the potential fire risk. In the UK, damaged electric vehicles are required to be stored at least 49 feet (15 meters) away from other objects. Consequently, a facility designed to accommodate 100 internal combustion engine vehicles can safely quarantine only two EVs.
The combination of insufficient repair data and the need for quarantine measures presents significant challenges to insurers, leading to higher costs for EV owners and potential delays in repairing these vehicles. Addressing these issues will be crucial for the wider adoption of EVs and the development of a more sustainable transportation sector.
