Electric vehicle claims frequency, total losses increasing
During Q1 2024, electric cars saw a total loss rate of 9.93%, according to Mitchell International.
During the first quarter of 2024, repairable claims frequency for electric vehicles increased 2.26% in the U.S., which represented a 40% increase compared with Q1 2023, according to Mitchell International.
The increase in EV claims coincided with a drop in the price of electric vehicles, according to Mitchell reported. Tesla lowering the costs for its vehicles during 2023 prompted other EV automakers to follow suit. At the end of 2023, the average cost for a new electric vehicle was $50,798, which was $2,040 more than the average cost for a gas-powered vehicle. The price drops for new EVs resulted in used EV prices dropping 30% year-on-year.
“Slowing new sales, manufacturer price reductions and changing consumer sentiment are impacting the value of used EVs,” Ryan Mandell, Mitchell’s director of claims performance, said in a release. “As a result, the total loss frequency for collision-damaged EVs is increasing.”
During Q1 2024, electric cars saw a total loss rate of 9.93%, according to Mitchell. This was an 8% increase compared with the final quarter of 2023 and 30% higher than Q3 2023. New gasoline-powered vehicles are seeing a similar, albeit slower, total loss rate of 9.51%.
According to Mandell, new internal combustion engine vehicles are comparable to EVs in terms of their complexity and cost to repair.
However, the cost to repair electric cars continues to be higher compared with ICE vehicles, with Mitchell finding an average difference of $1,363 between the two powertrains.
One reason for the higher repair costs of EVs is the significantly longer repair time. Mitchell found EVs need an average of 3.04 hours of labor compared with 1.66 hours for an ICE vehicle.
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