An increase in battery electric vehicle sales and ongoing supply chain issues could slow insurance claims processes and collision repairs report from CCC Intelligent Solutions. Electric vehicle sales accounted for 4.6% of new light-duty vehicle registrations in the first quarter of 2022 and thereafter account for just 0.86% of auto claims so far.
Although the volume of automobile claims for EVs is much lower than for traditional internal combustion engine (ICE) vehicles, the results indicate that the average total repair cost for EVs is higher than for non-EVs, and even non-EV luxury models.
“From a claims perspective, I think an electric vehicle is just one of many new technologies that will require adjusters, insurance companies, underwriters and repairers to get up to speed on the features unique to these vehicles,” says Susanna. Gotsch, senior director of insights and analytics at CCC.
The CCC report analyzed two subsets of vehicles to compare repair cost and repair productivity of EV and ICE models; Parameters for the analysis included original equipment manufacturer (OEM) parts usage, part repair or replacement, repair time, repairer productivity, and total cost.
Automobile claims data was compared for collision losses of roadworthy vehicles that suffered frontal impacts. The first subset included small non-luxury vehicles that are available as both EV or ICE models, or ICE vehicles similar to models only available as EV, and the second subset included the same but for mid-size luxury SUVs. Data from the analysis indicates that, overall, electric vehicle models produce a higher average repair cost, longer repair times, and lower repairer productivity compared to ICE vehicles.
Longer repair times and lower productivity of repairers are probably the result of the lack of experience and knowledge of repair shops.
“Anytime a new technology is introduced, it takes a while for repairers to get up to speed and have a full staff who have been fully trained, have all the tools, have all the training and are up to speed. comfortable and can fix those at the same level of speed and efficiency as some of the other vehicles they’ve been fixing for much longer,” says Gotsch.
Higher usage of OEM parts and repairs is one factor likely driving up EV repair costs. Most electric vehicles use advanced driver assistance systems (ADAS), and repair operations often include scanning and calibration. EVs also show a higher percentage of returns for additional repairs after the customer initially picks up the vehicle from the shop – another factor contributing to the decline in the EV promoter’s net score. Supply chain issues also increase repair costs.
“Almost all [EVs] still use lithium-ion batteries. Lithium is a very expensive and hard-to-find material, and in high demand. Other materials like cobalt… are a little harder to find and are rare earth materials that are also used in computers and things like that. There is a lot of competition for these materials,” says Gotsch. “The cost of these raw materials has increased, driving up the cost of electric vehicles.”
According to Gotsch, analysts predict a continued increase in electric vehicle sales – and repairers will have to adapt.
“To be able to repair an EV, there are a lot of investments to be made. [Repairers] need to invest not only in training their technicians…they also need to purchase different types of equipment, like personal protective equipment, and they need to ensure that their electrical capacity within the facility is configured to being able to do things like fast charging,” Gotsch notes. “All of these things require investment. So a repairman really has to make a decision to determine if the ROI will be there.