The market share of repairs is increasing, both in Canada and the U.S.
Mitchell’s Q2 EV Collision Insights Report (Plugged-In) revealed that electric vehicle claims are increasing. In the U.S., EV claims frequency rose to 1.49% during the quarter (a 0.36% increase over Q1) while in Canada it increased to 2.64% (a 0.23% increase).
These numbers reflect the fact that EVs are becoming more prevalent on our roads. What’s interesting about the data, is that Ford’s new battery electric pickup, the F-150 Lightning was a notable driver of the increase in EV claims frequency. It saw more than double the volume in the U.S. over Q1 (rising from 1.25% to 3.05%).
In Canada, what was notable was the increase in claims frequency among Tesla vehicles. Tesla’s market share of total EV repairs increased from 67.87% to 70.67%. Additionally, the Model S sedan also made it into the top five of most repaired EVs.
Overall, EV claims frequency is continuing to trend higher in Canada than the U.S. at present and there are several factors for this. Firstly, is that British Columbia and Quebec have been strong advocates for EV adoption with extensive hydroelectric power generation that lowers electricity consumption costs. Additionally, compared with the U.S., the Government of Canada is taking a more aggressive stance toward EVs on a national level, with a plan to phase out internal combustion engine (ICE) vehicles by 2035.
When we delve deeper into the claim frequency data, EVs tend to be designated as non-drivable at a lower frequency than comparable ICE vehicles. It’s important to understand, however, that in today’s environment, collision centres tend to shy away from non-drivable vehicles overall, because due to ongoing parts disruptions, having that non-drivable vehicle in the shop reduces flexibility when scheduling repairs. For those vehicles that are still drivable following a collision, however, there is more flexibility, since the shop can pre-order the parts and the customer can keep driving the vehicle until those parts are available to perform the repair. Overall, that represents a big benefit for the collision centre as not only does it increase flexibility but allows them to deliver a more consistent customer experience.
Non-drivable versus drivable
Looking at EVs specifically, the report showed that in Q2 only 10.31% of EVs were classified as non-drivable, compared with 13.11% of ICE vehicles. Some reasons for this relate to design and engineering. For example, the relative lack of moving parts means that an EV’s critical powertrain is less likely to be damaged as a result of a collision, even though certain ADAS and connectivity functions are more likely to be impacted. When it comes to rear-end collisions however, EVs tend to be more likely rendered undrivable (10.87%) versus ICE vehicles (9.72%) due to the rear location of powertrain components such as electric motors.
When it comes to the average severity of repairs, EVs continue to trend higher overall than comparable ICE vehicles ($963 in the U.S. and $1,328 in Canada). When we look at startup EV brands like Tesla, the disparities are even more readily apparent with the cost difference climbing to $1,589 and $1,600 respectively. Tesla vehicles and those from other startup automakers tend to use larger, single-piece structural parts, with many components that are not serviceable or can’t be sectioned. Additionally, there’s a higher concentration of lightweight parts on these vehicles which drives repair costs higher—not only the price of parts themselves but the greater complexity of performing the actual repairs. Furthermore, unlike legacy OEMs, there isn’t a strong aftermarket parts resource for these vehicles, which contributes to the overall higher cost of repairs.
Lower total loss frequency
While there have been many mainstream media reports about EVs being more frequently declared as total loss vehicles compared with their ICE counterparts, Mitchell’s data doesn’t indicate that. When we look at the closest analogue available, 2020 model year and newer luxury vehicles, we can see that EVs still have a lower frequency of total loss versus ICE vehicles.
And in terms of pure economics, EVs are currently worth significantly more than ICE vehicles, which means that percentage-wise, there’s more room for collision centres to repair them. Plus as the volume of EVs on the road increases, shops can expect to see more and more of them coming into their locations. Which means they need to be prepared to handle repairing EVs, including expanding the knowledge base, skills and equipment required to do so, starting right now.