EV Insurance Premiums Keep Climbing as Scratched Batteries Are Written Off

There is a hidden problem with nearly all Electric Vehicles (EVs), one that may well make you deeply regret making the decision to buy one. For most EVs, there is simply no way to repair or even assess if the battery is damaged after an accident, which effectively forces the insurance company to ‘write off’ the vehicle and send it to the great car-crusher in the sky. As a result of this, insurance premiums for EVs are rising rapidly, making any economic gains reduce rapidly.

What is almost as bad is the potentially damaged batteries are now collecting in salvage yards across the world as the recycling business for this piece of junk has not developed at the same pace as the sales of EVs, all of which is making a mockery of what was supposed to be a circular economy. We buy EVs because we buy into the sustainability argument but it is not very sustainable if you must junk the battery pack after even a minor collision.

The battery pack in even a small EV will cost over half of the cost of the EV in the first place; for a small Ford, the cost is about USD17,000. This makes them uneconomical to replace. Some of the big automakers are trying or claiming to have made their batteries easier to repair. Tesla has done the opposite and most experts claim that the current Model Y battery has ZERO repairability.

There has been no official word from Tesla on this but I did noticed a Tweet from King Elon himself bemoaning the fact that insurance for EVs was significantly higher than for ICE vehicles. I should point out that ALL EVs have this problem and not just Tesla, whereby the batteries make up a part of the structural integrity of the vehicle.

It is likely that the insurance premiums for EVs will only increase disproportionally as the percentage of them in the world’s car ‘population’ increases and increasing numbers of low mileage EVs get written off. Unless the likes of Tesla and all the other EV-makers make repair more accessible, one way of doing this is to allow third-party repairers access to battery cell data, something that the OEMs have been reluctant to do.

A simple fact that is lost on the general public is that EVs are massively CO2 intensive during the manufacturing process and need to be on the roads for tens of thousands of miles before they offset all those extra emissions and do not get me started on which hydrocarbon is being used to produce the electricity.

It already costs more to insure an EV car; in the US of A, the difference stands at about 27% more, in fact. Let us not forget that the average EV costs at least USD10,000 to USD15,000 more than its ICE equivalent and all of a sudden, perhaps economically, the argument for an EV is starting to get a little bit difficult.

The number of EVs on the roads across EU amount for less than 3% of total vehicles, yet insurance claims already amount to 8%. Without the ability to access battery data, insurers have to err on the side of caution and write cars off. It would now seem that we are entering into a whole new world where our car is essentially a disposable item. So much for being green and recycling.