Notebookcheck Logo

Electric cars will be cheaper to make than gas vehicles but with much higher repair and insurance costs

Tesla junkyard
Tesla junkyard
The maintenance cost and future price advantages of electric vehicles before gas-powered cars could be more than offset by their rising insurance premiums. Repairability has to be baked into the EV production cake now.

From waiting for weeks on a simple bumper job to outright coverage denial, electric cars are often faced with mounting problems when it comes to repairs and insurance.

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

Some insurers often decide to total an electric vehicle altogether, as the cost of fixing it after an accident becomes prohibitively expensive compared to gas cars with similar damages.

According to Gartner's research, this trend of rising EV repair prices and insurance premiums is expected to keep over the next few years, even when electric cars hit production cost parity with gas vehicles.

EV repairs and insurance pricing

The analysts warn that by the time electric vehicles are expected to become cheaper to make than gas cars, EV repair costs hence insurance premiums will have skyrocketed. 

"By 2027, the average cost of an EV body and battery serious accident repair will increase by 30%," they argue, and ask that automakers bake repairability into the EV production methodology right now, or they will be faced with consumer backlash further down the road.

As a result, vehicles suffering a collision may be more prone to a total write-off as the repair could cost more than its residual value. Equally, more expensive crash repairs may lead to more expensive insurance premiums or even the refusal of insurance companies to cover particular car models.

This won't be an easy task, considering that "revolutionary" as per Elon Musk low-cost manufacturing methods like gigacasting EV parts, are also the ones that stand in the way of easy repairability.

Tesla, however, gives indications that it is already thinking about that problem and is taking steps to decrease the repair costs of its electric vehicles when faced with insurer backlash. When British auto insurers started balking at the high repair costs of gigacast Model Y parts and raising premiums or refusing coverage, Tesla leaped into action.

According to the research arm of auto insurers in the UK, Tesla listened to their complaints and created a very thorough repair manual for service centers that have to deal with the Model Y. In addition, it changed the way the gigacast rear of its bestselling vehicle deforms in a crash.

Darren Bright, Thatcham’s principal engineer for automotive repairs said at the time that Tesla "thought about deformation in low- to medium-severity impacts and how to repair it, which is a really, really great thing to see." As for more critical damage in severe accidents, Tesla apparently offers to ship the whole gigacast rear to service centers at cost, reducing the price of repairs further.

On the plus side, Gartner predicts that "BEVs will reach ICE cost parity much faster than initially expected," as soon as 2027, but by then "15% of EV companies founded since the last decade will be acquired or bankrupt."

Elon Musk recently said something similar about an eventual Lucid or Rivian bankruptcy, but it remains to be seen if the Saudi investment in Lucid, or the new Rivian R2 and R3 lines, will stop this bad omen from materializing.

Get the 80A Tesla Gen 2 Wall Connector with 24' cable on Amazon


Read all 4 comments / answer
static version load dynamic
Loading Comments
Comment on this article
Please share our article, every link counts!
> Expert Reviews and News on Laptops, Smartphones and Tech Innovations > News > News Archive > Newsarchive 2024 03 > Electric cars will be cheaper to make than gas vehicles but with much higher repair and insurance costs
Daniel Zlatev, 2024-03-11 (Update: 2024-03-11)