Yahoo Autos EVs Will Soon Be Cheaper To Make Than Gas-Powered Cars But Will Cost Much More To Repair
The cost of making EVs is decreasing faster than the industry anticipated. EV production will reach cost parity with ICE-equipped cars in as little three years, and the latest forecast from Gartner predicts that EVs will actually be cheaper to make than gas-powered cars by 2027. One would expect prices to go down as EVs get cheaper to make, but sticker shock could still await buyers when it’s time to insure and repair these so-called cheap EVs, as Notebook Check reports.
While the cost of EV production keeps going down, the cost of EV repairs keep going up at alarming rates. Despite EVs reaching cost parity with gas cars by 2027, the average cost of repairs following a major accident could increase by 30 percent within that same time frame. This could cause insurance premiums to surge in price, or could lead to insurers flat-out denying coverage of some EV models. Per Notebook Check:
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.
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.
Right now, EVs are known for having greater up-front costs than comparable gas-powered cars. Making the case for EVs involves comparing their cost over the length of ownership, which yields significant savings due to lower refueling (or recharging) and lower maintenance bills. But lower production costs would invert that formula, making EVs cheaper to buy up-front but more expensive in the long run. At least, when taking into account EV insurance and repair costs.
