A Minor Crash Can Total an EV if the Battery Gets Even a Little Damage

The so-called circular economy of EVs is being undermined by insurance companies writing EVs involved in minor crashes, because a tiny amount of damage to the battery pack can render the whole pack unusable. The number of EVs being declared a total loss following minor accidents is growing, and while that shouldn’t be an issue in and of itself, the difficulty of recycling battery packs in the U.S. is producing more waste than expected, as Reuters reports.

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Carmakers including Ford and General Motors have said they’re developing battery packs that are easier to repair, replace and, ultimately, reuse, but Tesla and other EV makers are reportedly going in the opposite direction. Tesla’s use of structural batteries that are integral into an EV’s architecture make it difficult to repair or recycle a damaged battery.

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The benefit of these structural battery packs is mostly in the assembly — using the battery as a part of the architecture makes it quicker (and therefore cheaper) to construct the entire car. Cheaper production ostensibly yields cheaper prices for EV buyers, but it can also mean sacrificing the battery pack after even a minor collision.

Automotive disassembly expert Sandy Munro tells Reuters that the battery pack in the Texas-built Tesla Model Y has “zero repairability,” and as a result, some battery packs in these EVs are being sent “straight to the grinder” despite only minor damage.

The inability to reuse these batteries is revealing a hole in the green “circular economy” touted by carmakers, according to Reuters. But the problem is also making EVs expensive to insure:

Since batteries represent the greatest cost of building or repairing an EV, insurance companies are writing off more EVs following minor accidents.

The problem is so prevalent that Tesla now offers its own car insurance in some U.S. states, creating lower rates for Tesla owners. But looking past the big red flag of any carmaker offering a commercial solution to a problem it had a hand in causing, the overall problem also has something to do with liability.

Reusing a battery from an EV that was in a collision requires mechanics to check the battery’s diagnostic data to make sure it’s functional and safe — and Tesla doesn’t let third parties look at that date. Insurance companies are unwilling to use these recycled battery packs for fear of the repaired or repurposed units causing problems later on, per Reuters:

This combination of uncertainty in reusing EV battery packs and the difficulty of removing them in the first place is now leading to stockpiles of good EV batteries going to waste. Insurance companies say that if automakers could install the batteries in smaller, non-structural modules, it could make repairing or replacing damaged units easier, and making battery diagnostic data available to third parties would solve many other issues.

In the meantime, insurance premiums will remain higher than average and perfectly good batteries will likely continue to go to waste.

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