Thatcham Research, a British automotive risk intelligence company, highlighted the challenges faced by insurers due to a lack of data on electric vehicle (EV) batteries.
This dearth of information forces insurers to write off EVs even after minor accidents, potentially impeding the widespread adoption of EVs. Thatcham Research’s report, titled Impact of BEV Adoption on the Repair and Insurance Sectors, funded by the UK Government’s innovation agency Innovate UK, examined the disparities between EVs and fossil-fuel models.
The report shed light on the alarming scarcity of affordable or accessible repair solutions and post-accident diagnostics. Insurers have expressed concerns about the absence of repair or assessment options for slightly damaged battery packs in many EVs. Consequently, even vehicles with low mileage are being declared as write-offs, leading to higher insurance premiums and undermining the benefits of transitioning to electric mobility.
According to Thatcham Research, the cost of replacing an EV battery can exceed the used price of the vehicle within just one year, making it economically impractical to replace them.
Given this situation, Adrian Watson, Head of Engineering Research at Thatcham, stated that insurers should ideally have access to data on the state of health of an EV’s battery after an accident, enabling them to make informed decisions about repair versus write-off. However, Watson acknowledged that the current diagnostic capabilities fall short of providing a comprehensive understanding of battery status.
In response to these challenges, Mike Hawes, CEO of the Society of Motor Manufacturers and Traders (SMMT), a British industry group, expressed the automotive industry’s willingness to collaborate with insurers. Hawes emphasized the need to properly assess vehicles involved in accidents instead of defaulting to write-offs, ensuring that the majority of them are safely repaired and returned to the road.
Despite the growing popularity of EVs, they still account for only approximately 1.65 percent of the total number of cars on British roads. However, Thatcham Research noted that insurance claims related to EVs are already 25.5 percent more expensive than those for fossil-fuel counterparts and take 14% longer to repair.
Additionally, due to the potential fire risk associated with damaged EVs, it is essential to store them outside, at least 15 meters (49 feet) away from other objects, while awaiting repair. Thatcham Research highlighted that a facility designed to accommodate 100 fossil-fuel cars would only have sufficient space to safely quarantine two EVs.