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

Electric cars are reportedly being written off at a higher rate than equivalent petrol and diesel models due to the cost of replacing their expensive battery packs, leading to higher insurance premiums and a backlog of damaged parts waiting to be recycled.

A report by news agency Reuters has found 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.

Though an electric car may only appear to be cosmetically damaged after a crash, any defect in its battery requires replacement. With electric-car batteries costing as much as half of the vehicle’s value, insurers are all but forced to write the car off instead of replacing the expensive parts.

The managing director of the Allianz Centre for Technology, Christoph Lauterwasser, told Reuters there are cases where a battery pack might not have damaged cells, but 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.

As previously reported by Drive, 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.

Reuters reports this growing trend is also creating a backlog of electric cars with damaged batteries in scrapyards. With no battery recycling facilities in the UK, scrap companies are reportedly being forced to remove the damaged parts from the written-off vehicles and store them in containers.

"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.

Industry experts also expressed their concerns to Reuters about the issue becoming more prevalent with the introduction of ‘structural’ battery packs.

Pioneered by US electric-vehicle giant Tesla, a ‘structural’ battery pack forms a part of the car's floor structure, rather than an additional component between sections of its chassis. 

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.