Insuring EVs cost double in UK, adding to hurdles to make switch to zero-emission cars

Name: Chinese EV maker BYD launches electric cars in Indonesia
Uploaded: 2024-01-24T10:00:29.000Z
Duration: 2 min 55 s
Description: Chinese EV maker BYD launches electric cars in Indonesia

The average insurance premium for EVs jumped to US$1,700 at the end of last year, around double the cost for traditional cars

The industry has struggled with the aftershocks of the supply-chain issues sparked by the pandemic and the Ukraine war

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UK insurance broker Howden Group found that the cost of insuring an EV was about double the cost of a traditional combustion-engine car. Photo: Bloomberg

Bloomberg

Published: 6:00pm, 24 Jan 2024

British drivers have to fork out twice as much to insure electric vehicles (EV) as they do for combustion-engine models, adding to hurdles to make the switch to zero-emission cars.

The average insurance premium for EVs jumped to £1,344 (US$1,700) at the end of last year, around double the cost of cover for traditional cars, according to UK insurance broker Howden Group Holdings Ltd. The group cited higher repair costs, more time spent in workshops, and a lack of mechanics trained to fix EV batteries.

“You’ve got length of repair times going up, you’ve got the cost of the component parts going up, and you probably see more EVs written off because residual values are particularly low at the moment,” said Howden’s UK and Ireland Chief Executive Officer Carl Shuker.

The soaring cost of insuring EVs – which already tend to be more expensive than comparable fuel-burning models – is bad news for an industry that’s exhibiting signs of a slowdown.

Tesla Inc. slashed prices for its bestselling Model Y in markets including Germany, France and Norway last week. Audi said in December it’s paring back its EV roll-out. In much of Europe, including the UK, buyers are confronted with a cost-of-living crisis and slow progress in adding charging infrastructure.

The cost of EV insurance premiums, which has climbed faster than cover for combustion-engine models, rose 50 per cent last year. The industry has struggled with the aftershocks of the supply-chain issues sparked by the pandemic and the Ukraine war.

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Chinese EV maker BYD launches electric cars in Indonesia

Insurers have denied profiteering and argue there’s little they can do without losing money because premiums are based on the cost and frequency of claims. Accidental damage claims for EVs are on average 35 per cent more costly than similar ones for combustion vehicles, according to Howden.

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