Welcome back to the latest episode of The Future of Automotive, with Steve Greenfield, Founder and CEO of Automotive Ventures, where we put recent automotive and mobility news into the context of the broader themes impacting the industry.
A Wall Street Journal article this week reported on why battery-powered vehicles face longer wait times and bigger repair bills than gasoline-engine vehicles, after a crash.
For electric vehicles (EVs), repairs following a collision can cost thousands of dollars more than their gas-powered counterparts, because the fixes tend to require more replacement parts, the vehicles are more complicated and fewer skilled technicians exist to do such repairs. While those issues may ease over time, first-time electric owners may be startled by the higher costs and longer wait times.
Last year, repairing an EV after a crash cost an average $6,587 compared with $4,215 for all vehicles, according to CCC Intelligent Solutions.
The increased costs following collisions contrast with the maintenance savings that dealers and automakers promote when trying to get buyers to switch to electric cars and trucks. In addition to not needing gas, EVs tend to require less maintenance. Not needing to do regular service items like oil changes, engine tune-ups or replacement of timing belts means that electric-vehicle owners spend half as much maintaining their vehicles as their gasoline-owning counterparts, according to Consumer Reports.
But, when EVs need repair, it can be costly. Rental-car company Hertz Global Holdings, which operates a large electric fleet mostly composed of Tesla vehicles, said its third-quarter profit was negatively impacted, in part because of the cost of repairing electric models.
Higher repair costs are also helping to drive up insurance premiums for electric owners, who pay on average $357 a month for coverage compared with $248 for gas vehicle owners, according to insurance comparison website Insurify.
Last year, on average, an EV repair required roughly double the replacement parts compared with a conventional vehicle, according to CCC. The way many electric models’ parts are bolted or welded in the vehicles often means the components cannot be repaired and have to be replaced.
When an EV does get into a crash, repairs can be more complex for many reasons. The bodies can be more complicated to disassemble, and the repairs tend to require more steps and precautions.
Vehicles containing lithium-ion batteries also require special storage consideration because of the risk of fire when they are damaged. Those precautions add both time and cost to the repair process.
The vehicle bodies themselves can result in higher parts and labor costs because EVs tend to use more exotic materials than traditional steel. Some of these materials, like aluminum, require specialized tools and storage facilities, narrowing the number of shops that can perform the work.
Repairing an electric car tends to take longer, as well, in part because there are still a limited number of shops capable of doing this type of work. It takes 25% longer to get an EV into a body shop than a traditional vehicle, according to data from CCC. Those repairs tend to take roughly 57 days compared with 45 days for non-EVs.
With EV inventories backing up on dealership lots more than ICE vehicles, it’s going to be more challenging to sell them, if consumers end up paying higher insurance premiums for EVs, and are worried about the increased cost of repair if they do end up getting into an accident.
Company to Watch
Every week we highlight interesting companies in the automotive technology space to keep an eye on. If you read my weekly Intel Report, delivered to your email inbox at 7:00 AM on Mondays, I showcase a couple of companies to watch, and we take the opportunity here on this segment to share those companies with you.
Viezo provides autonomous IOT monitoring for railways, that has developed vibration energy harvesting technology by which sensors and other Internet of Things elements can be powered without batteries.
They allow railways to efficiently monitor both wheel bearing and wheel health.
The company’s Powerail product is a reliable and cost-effective solution for railcar owners. It prioritizes safety and aims to reduce maintenance costs, prevent derailments, and maximize wagon availability.
The company’s second product, called PowerTrack, provides real-time vibration and GPS data that lets you see the exact areas in the infrastructure that needs to be checked or fixed.
If you’d like to learn more about Viezo, you can check out their website at www.viezo.lt.
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Don’t forget to check out my book, “The Future of Automotive Retail,” which is available on Amazon.com. And keep an eye out for my new book, “The Future of Mobility”, which will be out at the end of the year.
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Thank you for tuning into CBT News for this week’s Future of Automotive segment, and we’ll see you next week!