EV batteries are not repairable which is why some insurance companies scrap entire cars even after minor collisions
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A scratched or slightly damaged electric battery may be sufficient for some insurers, as there is no way for many electric vehicles to repair the battery pack after a collision.
As a result, consumers — who potentially acquire an electric vehicle seeking to reduce monthly costs — face higher premiums and some countries are starting to deposit electric vehicle batteries in scrapyards, according to Reuters.
Matthew Avery, research director at automotive risk intelligence company Thatcham Research, said sustainability was the goal of electric vehicles, but the lack of repairs is creating a whole new problem.
“We are buying electric cars for sustainability reasons,” Avery said, Reuters reported. “But an EV is not very durable if you have to throw away the battery after a minor collision.”
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In this undated photo, damaged electric vehicles are pictured in the yard of UK salvage company Cinetic in Doncaster, Britain. (Cinematic/Handout via Reuters/Reuters Photo)
These battery packs can also cost tens of thousands of dollars, as much as 50% of an EV’s price tag. It also makes it unconstitutional to replace the batteries.
These low mileage cars usually end up in junkyards, adding to the problem.
EV salvage sales in the US and Europe include low-mileage Tesla, Nissan Motor Co, Hyundai Motor Co, Stellantis, BMW, Renault and others, according to Reuters.
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Experts predict that unless the repairability of EV batteries is addressed and fixed, pile-up will increase – and so, too, will premiums.
A partially detached 4680 structural battery pack from a Tesla Model Y manufactured in Austin, Texas, is displayed under a sheet of Plexiglas in Auburn Hills, Michigan US, March 3, 2023. (Reuters/Rebecca Cook/Reuters Photos)
Christoph Lauterwasser, managing director of the Allianz Center for Technology, a research institute owned by Allianz, described the issue as “critical”.
“The number of cases is going to increase, so handling the batteries is a tipping point,” Lauterwasser said.
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EVs need to be driven for thousands of miles before the extra emissions used to make them, which exceed those of fossil-fuel models, are offset. Should these EVs be scrapped before reaching that off-setting figure, they have a greater environmental impact than the cars they’re trying to replace.
A Tesla 4680 cell from a structural battery pack pulled from a Tesla Model Y manufactured in Austin, Texas, is displayed in Auburn Hills, Michigan US, March 3, 2023. (Reuters / Rebecca Cook / Reuters Photo)
He added: “If you throw away the vehicle at an early stage, you’ve lost a lot of the benefit in terms of CO2 emissions.”
Many car manufacturers have argued that their battery packs are repairable, but many car repair shops, insurance companies and leasing companies are not aware of the data, leading to some legal battles.
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EVs are loaded with safety features, however, so they have fewer accidents than conventional cars, insurers and industry experts have noted.
PolicyGenius, an online brokerage, reported that the average US monthly EV insurance payment is about $206, or 27% higher than for combustion-engine models.
Reuters contributed to this report.