Ryan Mandell
Director of Claims Performance, Auto Physical Damage, Mitchell, An Enlyte Company
Global electric vehicle (EV) sales have grown steadily in recent years—from 0.6% of new cars sold in 2015 to 2.5% in 2019. With 100 electrified models expected to hit showrooms by 2022 and a $300 billion OEM commitment to development and infrastructure, EVs are gaining ground on the internal combustion engine (ICE). In fact, Boston Consulting Group predicts that electric and plug-in hybrid (PHEV) models will account for a third of the market by 2025 and, by 2030, surpass ICE vehicle purchases entirely. This seems even more likely following California’s recent pledge to phase out the sale of gasoline-powered cars and trucks. Despite the upside of greater fuel efficiency and lower emissions, EVs introduce new challenges for the collision repair and automotive insurance industries due, in large part, to the high-voltage battery system, the use of more complex, lightweight materials, and the need for additional repair time. By analyzing Mitchell data—including more than 2.2 million scans from Mitchell Diagnostics—we compare EVs to their ICE counterparts to better understand their impact on the repair and claims process.
Diagnostic Requirements
When evaluating EVs and ICE-powered cars across all model years and methods of inspection, 2020 Mitchell data shows that EV estimates include diagnostic scanning 49.57% of the time as compared to 38.6% for ICE estimates. That said, the margin shrinks significantly when we look at diagnostic scanning for model years 2015 and newer, highlighting a difference of less than 2%: 50.6% of EV estimates versus 48.75% of ICE estimates (Figure 1). At first, we may be tempted to conclude that the diagnostic needs of EVs and ICE automobiles are the same with little difference in the complexity of their proper, safe repair.
Figure 1
However, by examining the average number of fault codes present on a typical scan for EVs versus ICE vehicles, that’s clearly not the case. For scans completed in 2020 using Mitchell Diagnostics, EVs produced an average of 12.58 fault codes per scan while ICE cars produced an average of 8.51. Even when focusing on model years 2015 and newer, fault codes for ICE-powered automobiles only increased to 8.83 while fault codes for EVs rose to 13.26 (Figure 2). While pre- and post-scanning is recommended for all vehicle types, this data reveals just how critical it is to EVs, since scanning these cars results in 50% more fault codes.
Figure 2
Construction Considerations
Lightweighting is the primary reason for construction differences between electric vehicles and those with ICEs. The EV average curb weight is approximately 200 kilograms greater than the average ICE automobile (Figure 3). According to global vehicle transport company Kar-Tainer, “this relates mainly to the relatively low energy density of lithium-ion batteries as opposed to petrol fuel.”
Figure 3
To offset the greater weight of the high-voltage battery systems found in EVs, manufacturers have leveraged lightweight materials such as aluminum, ultra-high-strength steel (UHSS), composites and carbon fiber for a greater percentage of the vehicle’s overall construction. As mentioned, these materials can be considerably more difficult to repair. In some instances, certain forms of UHSS, like boron steel, may actually prohibit a repair altogether due to the material properties. To illustrate this, we analyzed five major component parts (hoods, fenders, door shells, deck lids and quarter panels) and the repair frequency of each for both EVs and ICE vehicles. Four out of the five part types were less likely to be repaired on an EV than on an automobile with an ICE (Figure 4).
Figure 4
These results emphasize how important it is for collision repairers to understand the composition of EV parts and review the associated OEM repair procedures to help deliver proper, safe repairs. Insurers, on the other hand, must appreciate the construction differences between EVs and ICE-powered cars when setting reserves for such claims and take these differences into consideration during the estimate review process.
Cycle Time
As a critical repair metric, cycle time is of the utmost importance to insurers and repairers alike. With vehicle complexity on the rise, however, it’s much more difficult to complete the work in the same time as a comparable repair from a few years ago. The reason: additional diagnostic scanning and calibration requirements, repair challenges related to lightweight materials and potential COVID-19 supply chain interruptions. This is especially apparent when we analyze the average number of labor hours for EV and ICE vehicle repairs. In 2020, the average EV repair estimate contained 4.04 more labor hours than the average ICE repair estimate (Figure 5; body and refinish hours only). But when we examine keys-to-keys cycle time, we find a striking difference between EVs and ICE automobiles. The 2020 year-to-date average for EVs is 10.7 days and for ICE cars, it’s 9.5 days (Figure 6). Even if we normalize the data by focusing only on repairs with final estimate totals under $2,000, we find a similar delta: EVs take 6.6 days to repair and vehicles with ICEs take 5.5 days (Figure 7).
Figure 5
Figure 6
Figure 7
Clearly the difference between EVs and ICE-powered automobiles extends beyond method of propulsion. EVs truly are a different breed—one that comes with a unique set of requirements and exemplifies the changes in vehicle complexity seen over the past decade. For this reason, it’s imperative to appreciate such differences in order to prepare the most accurate repair plan, set appropriate expectations for vehicle owners and fully understand the impact of the growing EV car parc on an insurer’s financial future.