EV insurance claims are low but repair costs are high, CCC

The surge in sales of battery electric vehicles and ongoing problems could slow down insurance policies and collision repair, according to a recent study. report from CCC Intelligent Solutions. EV sales made up 4.6% of new light vehicle registrations in the first quarter of 2022, and, after that, only made up 0.86% of vehicle claims so far.

Although the number of EVs is much lower than that of internal combustion engine (ICE) vehicles, the findings show that the maintenance cost of EVs is higher than non-EVs, as well as high-end non-EV models.

“Based on the claims, I think the EV is one of the new technologies that will require transformers, insurance companies, underwriters and repairers to all be up to speed on conditions that are different from cars,” says Susanna. Gotsch, Senior Director of Insights and Analytics at CCC.

The CCC report analyzed two segments of vehicles to compare the maintenance cost and productivity of EVs and ICE models; Metrics in the analysis included original equipment manufacturer (OEM) parts usage, repair or replacement parts, length of repair time, repair materials and total cost.

Vehicle claims data were compared for collisions involving vehicles with front-end collisions. The first category includes small non-luxury cars that are available as EVs or ICEs, or ICE vehicles similar to EVs only, and the second category includes the same but more luxury SUVs. Data from this analysis show that, on the whole, EV models produce higher installation costs, longer maintenance times and lower maintenance costs compared to ICE vehicles.

Long maintenance times and low maintenance rates are probably due to lack of knowledge and experience from repair shops.

“Whenever there is a new technology that is introduced, it takes time for the developers to get up to speed and to have all the staff that are trained, equipped, trained and comfortable and able to fix the ones in the group. the same speed as other cars that have been in maintenance for a long time,” explains Gotsch.

The high use of OEM parts and refurbishing is what drives the high cost of EVs. Most EVs use driver assistance systems (ADAS), and maintenance often involves analysis and control. EVs are also showing a higher rate of return for repairs after the buyer has picked up the vehicle in the store – another factor that has contributed to EVs’ sharp decline in sales. Problems in the supply chain, too, are driving up repair costs.

“Almost all of them.” [EVs] they still use lithium-ion batteries. Lithium is a very expensive and hard-to-find element, but also a very important one. Some metals like cobalt… they’re a little harder to come by and they’re an earth element that’s also used in computers and things like that. There’s a lot of competition for those materials,” Gotsch explains. “The cost of these materials has gone up, and that’s driving up the cost of EVs.”

According to Gotsch, experts predict that EV sales will continue to increase – and manufacturers will have to adapt.

“In order to develop an EV, there is enough money to be made. [Repairers] They also have to buy different types of equipment, such as safety equipment, and they have to make sure that their electrical power inside the facility is set up to be able to do things like fast charging,” says Gotsch. “All these things require money. money will be there.”