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EV batteries lack reparability leading some insurers to junk whole cars after even minor collisions

Published March 20, 2023 3:40am EDT

Energy

Unless reparability in EV batteries is addressed and fixed, the pile-ups will increase — and so too, will premiums, expert says

By Lawrence Richard FOXBusiness

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A scratched or slightly damaged electric battery might be enough for some insurers to write off entire cars, as for many electric vehicles there is no way to repair battery packs after collisions. 

As a result, the consumer — who likely acquired an electric vehicle wanting to reduce monthly costs — faces higher premiums and some countries are starting to see electric vehicle batteries piling up in scrapyards, according to Reuters. 

Matthew Avery, research director at automotive risk intelligence company Thatcham Research, said the goal of electric vehicles was sustainability, but a lack of reparability is creating a whole new problem.

“We’re buying electric cars for sustainability reasons,” Avery said, Reuters reported. “But an EV isn’t very sustainable if you’ve got to throw the battery away after a minor collision.”

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A damaged vehicle

Damaged electric vehicles that have been written off by insurers are pictured at UK salvage company Synetiq’s yard in Doncaster, Britain, in this undated photo.  (Synetiq/Handout via REUTERS / Reuters Photos)

These battery packs can also cost tens of thousands of dollars, representing as much as 50% of an EV’s price tag. This also makes replacing batteries uneconomical.

These cars also pile up in scrapyards, usually with low mileage, exacerbating the problem.

According to Reuters, EV salvage sales in the U.S. and Europe includes low-mileage Teslas, Nissan Motor Co, Hyundai Motor Co, Stellantis, BMW, Renault and others.

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Unless reparability in EV batteries is addressed and fixed, the pile-ups will increase — and so too, will premiums, experts predict. 

A photo of a battery pack

A partially disassembled 4680 structural battery pack from a Tesla Model Y, built in Austin, Texas, is displayed under a sheet of plexiglass in Auburn Hills, Michigan U.S. March 3, 2023. (REUTERS/Rebecca Cook / Reuters Photos)

Christoph Lauterwasser, managing director of the Allianz Center for Technology, a research institute owned by Allianz, called addressing the issue “crucial.”

“The number of cases is going to increase, so the handling of batteries is a crucial point,” Lauterwasser said.

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EVs need to be driven for thousands of miles before the extra emissions used to create them, which are more than fossil-fuel models, are offset. Should these EVs be scrapped before they reach that off-setting figure, they have more of an environmental impact than the cars they are attempting to replace. 

A photo of a Tesla 4680 cell

A Tesla 4680 cell from a structural battery pack pulled from a Tesla Model Y, built in Austin, Texas, is displayed in Auburn Hills, Michigan U.S. March 3, 2023. (REUTERS/Rebecca Cook / Reuters Photos)

He added: “If you throw away the vehicle at an early stage, you’ve lost pretty much all advantage in terms of CO2 emissions.”

Many carmakers have argued their battery packs are repairable but many car repair shops, insurers, and leasing companies are not aware of the data, spurring some legal fights. 

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EVs are however loaded with safety features, so they have fewer accidents than traditional cars, insurers and industry experts have noted.

Policygenius, an online brokerage, reported the average U.S. monthly EV insurance payment is approximately $206, or 27% higher than a combustion-engine model.

Reuters contributed to this report.

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