According to a report by Reuters, electric cars are facing increasing scrutiny due to the lack of repair options for their battery packs following accidents. Even minor collisions result in insurance companies being forced to permanently take cars off the road, driving up premiums on electric vehicles.
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Experts have reportedly claimed that Tesla Y SUVs have “zero reparability” due to their battery packs being a structural component of the car. A recent report warns that scratched and mildly damaged battery packs are starting to accumulate in scrapyards across certain countries.
The battery packs in electric vehicles (EVs) are the most expensive component and account for approximately 50% of the total cost of the car. Consequently, any damage to the battery packs will make it economically unfeasible to repair the car, resulting in insurance companies writing them off.
Reuters recently searched for EV salvage sales in the US and Europe, which uncovered a large number of low-mileage Teslas, as well as vehicles from Nissan, Hyundai, Stellantis, BMW, Renault and other manufacturers. Although most automakers maintain that their battery packs are repairable, Reuters revealed that very few were willing to provide access to battery data.
The challenge of balancing production costs and repairability in EV battery pack design
According to Reuters, some car manufacturers have taken different approaches to battery pack repairs in the event of accidents. Nissan and Renault have said they can replace individual modules in their EVs, while Stellantis does not repair batteries following accidents that deploy airbags, citing its commitment to data privacy. On the other hand, Ford and General Motors have designed their vehicles to make battery packs easier to repair.
Tesla, on the other hand, has opted for a different strategy. The battery pack in its popular Model Y crossover, the best-selling EV in Britain in 2022, is an integral part of the vehicle structure. This approach helps Tesla reduce production costs but also increases the risk of battery pack damage in an accident. Even minor shunts may result in consumers having their cars written off. According to Sandy Munro, the head of Michigan-based Munro & Associates, which advises car manufacturers on improving their vehicles, the battery pack in the Model Y has ‘zero repairability’ because of its role in the car’s structure. ‘A Tesla structural battery pack is going straight to the grinder,’ he explained.
According to this report by Reuters, Tesla has not acknowledged any issues with insurers writing off its electric vehicles. However, CEO Elon Musk mentioned that some third-party insurance premiums were unreasonably high in January. Christoph Lauterwasser, the managing director of the Allianz Center for Technology, a Munich-based research institute owned by insurer Allianz, believes that handling EV batteries is a crucial environmental issue. Lauterwasser stated, “If you throw away the vehicle at an early stage, you’ve lost pretty much all advantage in terms of CO2 emissions.” Allianz reported that EV battery damage accounts for only a small percentage of its motor insurance claims, but it amounts to approximately 8% of claim costs in Germany. When approached by Reuters, Tesla did not respond to a request for comment.
The circular economy of battery cars is affected by the write-off of EVs
The rise in low-mileage EVs being written off after minor accidents have resulted in a loss for the car owners, higher insurance premiums, and a gap in the green ‘circular economy’ that car manufacturers strive for. Experts have raised concerns over this issue, stating that it needs to be addressed. The UK’s largest salvage company, Synetiq, has seen a surge in the number of EVs and hybrids in the isolation bay at their Doncaster yard. Head of operations, Michael Hill, mentioned that over the past year, the number has increased from a dozen every three days to up to 20 per day. This trend is observed across all manufacturers.
As the UK currently lacks EV battery recycling facilities, Synetiq has to store the batteries in containers after removing them from written-off cars. Hill estimates that at least 95 per cent of the cells in the hundreds of EV battery packs – and thousands of hybrid battery packs – stored at Synetiq are undamaged and can be reused. This underlines the importance of establishing a sustainable circular economy to minimize waste and promote recycling in the EV industry. Therefore, car manufacturers must collaborate with recycling facilities to address this gap and ensure a sustainable future for the EV industry.
The rise of electric vehicles has been a boon for sustainability, but a recent study by Bloomberg New Economic Finance (BNEF) has shed light on a new problem. The current battery cost is around $135 (approximately £110) per kilowatt-hour, meaning that replacing the 77.4kWh battery in a Kia EV6 would cost around $10,449 (approximately £8,500). According to Andy Keane, UK commercial motor product manager at insurer AXA, the high cost of batteries could sometimes make replacing them impractical. Insurance companies are unwilling to take risks by putting an EV back on the road because they could face lawsuits later on if something happens with that vehicle and they do not total it.
Reuters warns that there is a growing trend of low-mileage, zero-emission cars being written off with minor damage. However, industry-wide data on the number of uneconomical repairs are hard to come by. Matthew Avery, research director at automotive risk intelligence company Thatcham Research, commented on the report, saying that EVs are being purchased for sustainability reasons. However, if the battery has to be thrown away after a minor collision, the EV is not as sustainable as we thought. The high cost of replacing EV batteries underlines the importance of establishing a sustainable circular economy and developing recycling facilities that can repurpose old batteries to minimize waste and reduce the carbon footprint of electric vehicles.
This is not a major issue, says AA boss
Edmund King, the President of the AA, has a different view on the recent claims of low-mileage electric vehicles being written off following minor accidents. King believes that some of the claims made by the news agency are over-hyped and that some EVs are written off due to serious structural damage that would have rendered any car, regardless of whether it was petrol, diesel or electric, irreparable. He points out that battery packs can form part of the chassis in EVs, and the car may need to be written off if there is damage.
However, King is optimistic about the future of EV batteries, pointing out that Ford, GM, and other manufacturers are working on repairable battery packs. Many EVs also come with battery warranties for 8-10 years, which shows that manufacturers have faith in battery longevity. Even after this period, batteries can be reused multiple times. He gives the example of Nissan Leaf EVs, which are still going strong with over 100,000 miles on the clock.
King believes that the battery recycling industry is growing, despite the current lack of official recycling facilities in the UK. He cites Nottingham Trent University’s recent funding to establish a process to recycle or reuse EV batteries, preventing millions of tons from being sent to landfill each year. He also mentions the launch of Redwood Materials by former Chief Technical Officer of Tesla, J.B. Straubel, to recycle and build a remanufacturing ecosystem for used batteries.
King believes that the value of recycled car batteries will be reflected in the trade-in values of high-mileage EVs and that the reuse of vehicle batteries is efficient and produces environmental benefits in storing excess electricity and reducing the manufacturing of such storage. He concludes that the battery market is evolving quickly, with longer ranges and longer life recyclable and repairable batteries. Battery longevity may still influence the residuals of used EVs, but the battery market is evolving rapidly.
