As expected, the battery packs that drive electric vehicles continue to be a huge deterrent to ownership. The cost of replacing batteries costs tens of thousands of dollars and there are now reports that a simple scratch can lead to junking the entire vehicle.
“For many electric vehicles, there is no way to repair or assess even slightly damaged battery packs after accidents, forcing insurance companies to write off cars with few miles – leading to higher premiums and undercutting gains from going electric,” Reuters reported. “And now those battery packs are piling up in scrapyards in some countries, a previously unreported and expensive gap in what was supposed to be a ‘circular economy.'”
Matthew Avery, research director at automotive risk intelligence company Thatcham Research, told the news agency that EVs are not “very sustainable” at this rate.
“We’re buying electric cars for sustainability reasons,” Avery said. “But an EV isn’t very sustainable if you’ve got to throw the battery away after a minor collision.”
Reuters noted that Ford Motor Co and General Motors Co have said that they made battery packs easier to repair, but that Tesla “has taken the opposite tack with its Texas-built Model Y, whose new structural battery pack has been described by experts as having ‘zero repairability.'”
Unless Tesla and other carmakers produce more easily repairable battery packs and provide third-party access to battery cell data, already-high insurance premiums will keep rising as electric vehicle sales grow, according to insurers and industry experts https://t.co/V6oqnchJi1 pic.twitter.com/bHjn7rZNZ1
— Reuters (@Reuters) March 20, 2023
While EVs represent a small fraction of vehicles on the road, Reuters said the trend of low-mileage zero-emission cars being written off with minor damage is growing and pointed to Tesla making battery packs part of the car’s body as a decision that will “cut production costs but risks pushing those costs back to consumers and insurers.”
Tesla CEO Elon Musk said during a fourth-quarter earnings call in January that premiums from third-party insurance companies “in some cases were unreasonably high,” according to Business Today, but added that “we want to minimize the cost of repairing a Tesla if it’s in a collision,” citing changes to vehicle design and software.
“It’s remarkable how small changes in the design of the bumper (and) providing spare parts needed for collision repair have an enormous effect on the repair cost,” Musk said. “Most accidents are actually small — a broken fender or scratched side of the car.”
Citing insures and industry experts, Reuters reported that “unless Tesla and other carmakers produce more easily repairable battery packs and provide third-party access to battery cell data, already-high insurance premiums will keep rising as EV sales grow and more low-mileage cars get scrapped after collisions.”
“The number of cases is going to increase, so the handling of batteries is a crucial point,” Christoph Lauterwasser, managing director of the Allianz Center for Technology, told the news agency.
“If you throw away the vehicle at an early stage, you’ve lost pretty much all advantage in terms of CO2 emissions,” he said, pointing out that because EV battery production emits far more CO2 than fossil-fuel models, EVs must be driven for thousands of miles before they offset those extra emissions.
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