A scratched or slightly damaged electric battery might be enough for some insurers to write off entire cars, as there is no way to repair battery packs after collisions.
The consumer, who may have purchased an electric vehicle wanting to reduce monthly costs, is facing 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.
Avery said that we're buying electric cars for sustainability reasons. If you throw the battery away after a minor collision, an EV isn't very sustainable. These battery packs can cost tens of thousands of dollars, representing as much as 50% of an EV's price tag. This 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 include low-mileage Teslas, Nissan Motor Co, Hyundai Motor Co, Stellantis, BMW, Renault and others.
Unless reparability is addressed and fixed in EV batteries, the pile-ups will increase, and so will premiums, experts predict.
Christoph Lauterwasser, the managing director of the Allianz Center for Technology, a research institute owned by Allianz, called addressing the issue crucial. The handling of batteries is a key point, as the number of cases is going to increase, Lauterwasser said.
EVs need to be driven for thousands of miles before the extra emissions used to create them, which are more than fossil fuel models. If these EVs are scrapped before they reach that off-setting figure, they have more of an environmental impact than the cars they are trying to replace.
He said if you throw away the vehicle at an early stage, you've lost a lot of the advantage in terms of CO2 emissions. Many carmakers claim that their battery packs are repairable, but many car repair shops, insurers, and leasing companies are not aware of the data, spurring legal fights.
EVs have fewer accidents than traditional cars, insurers and industry experts have noted, because they are loaded with safety features.
The average U.S. EV insurance payment is about $206, or 27% higher than a combustion engine model, according to Policygenius, an online brokerage.