Auto Service World
News   May 7, 2024   by Adam Malik

How much EV claims and costs surged

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Canada has witnessed a significant uptick in electric vehicle repairable claims, marking a notable shift in the automotive landscape, a new report has found, presenting opportunities and challenges for the automotive aftermarket.

According to the latest Plugged-In: EV Collision Insights 2023 Year in Review report produced by Mitchell, there was a 2.86 per cent EV repairable claims frequency in Canada, a more than 40 per cent increase from the previous year, pointing to an increase in EVs that are now on the country’s roads.

This surge is particularly pronounced in provinces like British Columbia and Quebec, where EV adoption is highest in the country. The two regions lead the North American market in EV repairable claims frequency, with respective increases of 1.39 per cent and 0.86 per cent from the previous year. British Columbia tops the chart with a 5.35 per cent frequency, followed by Quebec at 3.51 per cent.

The increase in EV adoption brings with it heightened repair costs. In Canada, the average repair for EVs was $6,795, much higher than internal combustion engine vehicle repair costs at $5,122. This disparity, along with an approximate 8 per cent increase in repair costs for both EVs and ICE vehicles from 2022 to 2023, highlights the complex and often more expensive nature of EV maintenance, Mitchell noted in the report.

One of the factors driving up these costs is the complexity of EVs, especially given their reliance on advanced driver assistance systems (ADAS) and lightweight materials. The report noted that EV repair estimates are 50 per cent more likely to include work related to sensors compared to ICE vehicles. This increases the likelihood that ADAS calibrations are required post-repair, pushing costs higher. Additionally, EVs use lightweight materials more frequently than their ICE counterparts, which can complicate and increase the cost of repairs, the report highlighted.

Despite these challenges, the Canadian consumer interest in EVs remains strong, with one in 10 Canadians owning an EV. This growing adoption rate has surpassed that of the U.S. on a percentage basis.

The report also sheds light on the most frequent EV models involved in claims, with the Tesla Model 3 leading in both the United States and Canada. However, the landscape is changing as models like the Tesla Model Y and Hyundai Kona EV show different trends in claims frequency.

This rising trend in EV adoption and the associated repair challenges pose both hurdles and opportunities for the Canadian automotive aftermarket, the report found. Repair facilities will need to adapt to handle the complexities of EVs, from investing in specialized training and equipment to navigating the intricacies of advanced technologies.

As the EV market continues to evolve, so too will the aftermarket sector, requiring ongoing education, adaptation and innovation to meet the changing needs of Canadian vehicle owners, according to the report.

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