EV repair claims rise as costs remain higher than ICE vehicles
Mitchell International projects that the gap will eventually narrow, but is unlikely to close completely.
Electric vehicle collision repair costs continue to outpace expenditures to repair vehicles with internal combustion engines (ICE), according to Mitchell International, which reported the cost difference is $950 in the U.S. and $1,301 in Canada.
During the third quarter, EV repairable claims frequency was up 1.86% in the U.S., a 0.37% increase from the prior quarter.
The repair-cost gap between EVs and ICE will eventually narrow as the aftermarket and recycled parts sectors grow for EVs and automakers work to make the collision repair process easier to perform, according to Ryan Mandell, director of claims performance at Mitchell.
“Manufacturers understand the relationship between a positive collision repair experience and their overall brand experience. Right now some of the repair procedures are very prohibitive, but I think that will change over time,” Mandell tells PropertyCasualty360.com.
Tesla’s Giga Casting system, which presses large portions of the vehicle as one piece, illuminates this issue. While Tesla was an earlier forerunner of this manufacturing process, automakers such as Toyota have adopted the process recently.
“With the Giga Cast parts, where you have large parts cast all as one complete unit, if you have damage to a portion you typically have to replace the entire part,” Mandell says. “You aren’t able to section it off and weld in just a portion, so that can be very prohibitive.”
Perhaps as a forecast of things to come, Japanese auto parts maker Ryobi announced in July 2023 that it will start using Giga Casting to produce EV auto body parts.
Although market forces and economies of scale will narrow the repair-cost gap between EVs and ICE vehicles, the divide will never completely close, Mandell says. This is primarily due to costs associated with managing and storing the high-voltage battery during the repair process.
For example, Mandell compared the repair costs to repair an electric F-150 Lightning and an ICE-powered F-150 XLT (which have similar trim packages) following a standard front-end collision. The repair estimate included the cost to replace everything in the bumper assembly, headlights, hoods, grill and other related components.
“The Lightning estimate was about $3,500 more expensive,” Mandell says. “The grill is $200 more expensive, and the grill on the Lightning has one additional part that the XLT does not, a grill reinforcement that costs $1,500.”
Dispelling ‘total’ myth
Mitchell’s data also refutes claims that EVs are written off as total losses more often than ICE vehicles.
Mandell explains that when EVs are compared with 2020 and newer luxury vehicles, which are the closest analog on the market in terms of comparable actual cash value, the total loss numbers are almost identical.
Looking at claims data from the first three quarters of 2023, EVs total loss rate stood at 7.25%, while luxury ICE vehicles saw a total loss rate of 7.47% during the period. Through the first nine months of 2023, the total loss rate for all ICE vehicles was 8.49%.
“There are certainly going to be instances where an EV might be totaled with relatively minor damage because the battery has been compromised, but it doesn’t appear to be really impacting the overall numbers significantly,” Mandell explains.
Related: