Electric vehicles (EVs) are proving significantly more expensive to insure than their petrol and diesel counterparts, a factor that could deter potential buyers despite a surge in sales. Industry analysis suggests that insurance premiums for EVs can be between 10% and 25% higher, primarily due to increased repair costs and the greater likelihood of vehicles being written off after even minor collisions.
Research conducted by Thatcham Research, which acts on behalf of the insurance industry, highlights the core issues. Tests simulating low-speed impacts, such as a 6mph bump, reveal substantial hidden damage in EVs. For instance, a Dacia Spring subjected to such a test showed severe damage to its high-voltage charging port and associated components. Senior test engineer Sean Hoad explained that because these parts are often integrated into a single unit, a minor issue can necessitate replacing the entire charger, inverter, and cabling, potentially costing around £4,000. Such extensive repairs often lead insurers to deem the vehicle a write-off.
On average, EVs are 30% more expensive to repair and take 14% longer to fix compared to traditional internal combustion engine vehicles. This elevated cost is a direct result of design choices aimed at reducing weight in inherently heavier EVs. Principal advanced technologies engineer Dan Harrowell noted that many EV components are integrated and glued together rather than using fixings. While this saves weight, it means that instead of replacing individual damaged parts, entire systems must be exchanged, driving up repair bills significantly.
The battery pack, which can account for approximately 40% of an EV's total value, presents another major challenge. Even superficial damage to its protective casing, not affecting the core cells, can necessitate a full battery replacement if the assembly is supplied as a single unit. Given the battery's high cost, any damage requiring its replacement dramatically increases the risk of the vehicle being written off, even after a relatively minor accident.
Despite these insurance hurdles, EV sales continue to grow. Data from the Society of Motor Manufacturers and Traders (SMMT) indicates that nearly one in three new cars sold in the UK in June were electric. However, experts like Ian Plummer of Autotrader caution that while demand is rising due to competition and consumer interest, the broader market remains fragile, with ongoing uncertainties around policy, incentives, and external pressures. Addressing the high cost of insurance is seen as crucial to sustaining this growth and making EVs more accessible to a wider audience.