New data shows depreciation and scrappage rates for electric cars are LOWER than petrol and diesel cars

A new analysis shows that electric vehicles are written off and scrapped by insurers half as often as petrol and diesel cars.

It comes after several reports suggest that EVs are being written off by insurers at an alarming rate because minor collisions would cause irreparable damage to the batteries.

Although the latest report shows that the depreciation rate is much lower than expected, the current average repair costs for electric cars are clearly higher than for cars with conventional combustion engines (ICE).

Automotive data company cap hpi has carried out an analysis of DVLA data following calls from parts of the car industry to understand whether EVs are being written off more often than ICE cars.

It is said that there is ‘conclusively no evidence’ to support the theory that battery-powered cars are being scrapped at a higher rate than ICE models.

Looking specifically at cars up to one year old, the research shows that: Last year, a total of 40 electric vehicles (0.01 percent) were scrapped of the 334,525 on the road.

This compared to 701 of the 2,026,146 ICE vehicles (0.03 percent).

By extending the age of cars to three years, 782 (0.09 percent) of the 912,341 electric vehicles were scrapped in 2023, compared to 10,300 (0.18 percent) of the 5,788,617 petrol and diesel vehicles.

Finally, official data shows that, looking at engines up to five years old, 1,433 (0.13 percent) of the 1,130,581 electric vehicles had to be scrapped, compared to 33,700 (0.33 percent) of the 10,278,745 petrol ones. and diesel models.

Jonathan Clay, director of identification at cap hpi, says the report highlights the critical need for the industry and consumers to have “an accurate view of emerging trends as the EV market continues to evolve.”

Electric cars ARE more expensive to repair

The data contradicts a number of reports over the past year that have made bold claims that EV depreciation is becoming much more common.

A Reuters survey in March 2023 found that insurance companies increasingly have little or no choice but to permanently remove electric cars from the road after minor collisions, which in turn drives up premiums.

The report warned of scratched and slightly damaged battery packs ‘piling up in scrap yards in some countries’, with experts saying batteries in expensive Tesla Y SUVs are ‘zero repairable’ because they are a structural part of the car.

Further research last year, carried out by British car risk information company Thatcham Research, also warned that electric vehicles are more expensive to repair, take longer to repair and are more likely to be written off due to damage to their batteries.

Are Impact of BEV (Battery Electric Vehicle) Adoption on Repair and Insurance Sectors Report published last July – funded by Innovate UK, the government’s innovation agency – says road accidents involving an electric car are often ‘catastrophic for the vehicle’.

This is due to a “worrying lack of affordable or available post-accident repair solutions and diagnostics,” which often sees EVs written off as uneconomical to put back on the road.

This is usually the case if the high-voltage battery pack has suffered damage as a result of a collision. Batteries in electric cars represent a substantial percentage of the original vehicle value and if they are damaged in some way, insurers often consider that the cost of repair or replacement will exceed the total existing value of the car.

The research shows that the cost of replacement EV batteries varies widely depending on the model – although it is an extremely expensive process regardless of the car in question.

For example, for a premium electric car, the cost of a new battery is around £29,500, according to Thatcham Research. This is more than the price of a new Volkswagen T-Roc SUV with a petrol engine.

And for ‘budget-friendly’ electric models, the company estimates the average cost of replacing the battery at £14,200 – that’s more than a Dacia Sandero, Britain’s cheapest car.

Research by cap hpi’s parent group, Solera, which specializes in vehicle lifecycle data, tells a similar story.

In November, it published the analysis results of approximately 92,000 global vehicle repair estimates between January 2021 and August 2023.

The main finding is that Repair costs for electric vehicles worldwide are 29 percent higher than for ICE vehicles.

This is mainly because EV parts are on average 48 percent more expensive, including components such as high-voltage batteries and control units.

In fact, EV battery systems represent the highest component costs of any vehicle, significantly exceeding the costs for components such as headlights.

And it was also found that certain parts – especially the rear bumpers – have a significantly higher replacement rate in electric cars than in ICE cars.

“With repair costs for EVs being up to 29 percent higher than ICE vehicles, it is important to understand the impact on scrappage rates, according to research from Solera,” added Jonathan Clay of cap hpi.

A lack of trained technicians to work on electric vehicles is also a major problem for the industry.

The latest prediction from the Institute of the Motoring Industry is that there will be a shortage of 30,000 EV-qualified technicians by the time the ban on the sale of new ICE vehicles comes into effect in 2035.