Electric cars more likely to be written off due to battery costs

Due to the cost of replacing their expensive battery packs, electric cars are reportedly being written off at a higher rate than equivalent petrol and diesel models.

This has led to higher premiums and a backlog of damaged parts waiting to be recycled.

News agency Reuters released a report revealing that automotive insurers in the US and Europe are more likely to write off electric cars after relatively minor crashes due to irreparable battery packs, which cost significantly more to replace than a petrol or diesel engine.

Even though an electric vehicle may only appear to have cosmetic damage after a collision, any battery defect requires replacement.

Insurers are all but forced to write the car off rather than replacing the expensive parts, due to electric-car batteries costing as much as half of the vehicle’s value.

Christoph Lauterwasser, managing director of the Allianz Centre for Technology, informed Reuters there are cases where a battery pack might not have damaged cells, however it is impossible to diagnose whether its internal parts are still functioning as intended, leading to the write-off being processed.

According to Reuters, this practice is not only driving up insurance premiums for electric cars, but it is also negating the environmental benefits of buying a zero-emissions car, due to the vehicles not being on the road for long enough to offset their production emissions.

Mining for lithium – a crucial part of the battery pack – means emissions produced when building an electric car are far higher than those of petrol and diesel vehicles.

According to Reuters, this upward trend is also creating a backlog of electric cars with damaged batteries in scrapyards.

It’s reported that scrap companies are being forced to remove the damaged parts from the written-off vehicles and store them in containers because there are no battery recycling facilities in the UK.

“The number of cases is going to increase, so the handling of batteries is a crucial point,” Allianz Centre for Technology managing director Christoph Lauterwasser told Reuters.

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

The insurance company executive also said electric-car battery damage is attributed to approximately eight per cent of the firm’s claim costs in Germany, a disproportionate amount compared to the number of claims being made.

Reuters were also informed of the concerns expressed by experts on the issue becoming more prevalent with the introduction of ‘structural’ battery packs.

A “structural” battery pack is an innovation made by the leading manufacturer of electric vehicles in the US, Tesla, and is built into the floor of the vehicle rather than as an additional component between chassis segments.

While this is intended to reduce costs and add strength to the car, Sandy Munro – the head of US automotive engineering specialists Munro and Associates – believes Tesla’s structural pack as “zero repairability” and is “going straight to the grinder” if damaged.

At present, Tesla is the only car-maker which has started to produce electric cars with a structural battery pack, though it is not featured in its Australian-delivered models.

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