Electric cars will be cheaper to manufacture than gasoline vehicles, but their repair and insurance costs will be much higher

From waiting weeks for a simple bumper repair to being denied coverage outright, electric cars often face growing problems when it comes to repairs and insurance.

Hertz recently had to part with its fleet of Model 3 rental vehicles, citing not only poor timing of purchase and resulting rapid depreciation, but also repair costs and wait times that affect premiums. insurance.

Some insurers often decide to eliminate an electric vehicle altogether, because the cost of repairing it after an accident becomes prohibitive compared to gasoline cars that have suffered similar damage.

According to the Gartner study, this trend of increasing EV repair prices and insurance premiums is expected to continue in the coming years, even after electric cars reach production cost parity with vehicles. gasoline.

Analysts warn that by the time electric vehicles become cheaper to manufacture than gasoline vehicles, EV repair costs and therefore insurance premiums will have skyrocketed.

“D'By 2027, the average cost of a body and battery repair in the event of a serious accident will increase by 30%“, they say, and they are calling on automakers to integrate repairability into EV production methodology now, otherwise they will face consumer backlash in the longer term.

As a result, vehicles in a collision may be more likely to be written off, as repairs could cost more than their residual value. Likewise, more expensive repairs can result in higher insurance premiums or even insurance companies refusing to cover certain car models.

The task will not be easy if we consider that Elon Musk's “revolution” of low-cost manufacturing such as gigacasting are also those that prevent easy repair.

Tesla, however, is giving indications that it is already thinking about this issue and taking steps to reduce repair costs for its electric vehicles when it faces backlash from insurers. When UK car insurers began to worry about the high repair costs of the Model Y's gigacast parts and raise premiums or deny coverage, Tesla was quick to act.

According to the British Motor Insurers Research Department, Tesla listened to their complaints and created a very comprehensive repair manual for service centers that need to service the Model Y. In addition, Tesla has changed the way whose gigacast rear of its best-selling vehicle deforms in the event of an accident.

Darren Bright, Thatcham's senior engineer for auto repairs, said at the time that Tesla had “thought about deformation in low to medium severity impacts and how to repair it, which is really, really awesome to see” As for more critical damage in the event of serious accidents, Tesla apparently offers to ship the entire gigacast rear end to service centers at cost, which further reduces the price of repairs.

On the positive side, Gartner predicts that “BEVs will reach internal combustion engine cost parity much faster than expected“, from 2027, but only until then”15% of EV companies founded in the last decade will have been acquired or gone bankrupt“.

Elon Musk recently made similar comments about a possible bankruptcy of Lucid or Rivian, but it remains to be seen whether the Saudi investment in Lucid, or Rivian's new R2 and R3 electric vehicle models, will be enough to allow the company to develop Rivian R2 and R3 will prevent this bad omen from materializing.

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