Investigation: Electric Vehicles Have More Failures, Maintenance and Insurance Costs Higher

The continuous popularity of electric vehicles is changing the landscape of the automotive industry. However, many surveys have shown that consumers are facing issues with electric cars such as high depreciation, frequent malfunctions, and high insurance premiums.

Advocates of battery electric vehicles (BEVs) argue that with fewer parts and systems compared to traditional fuel vehicles, electric cars should have fewer breakdowns and require less maintenance. However, reality may not align with these expectations.

According to the “2024 Initial Quality Study” (IQS) published by the American market research company J.D. Power, pure electric cars and plug-in hybrid electric vehicles (PHEVs) are more prone to breakdowns and require more maintenance compared to traditional fuel vehicles across all repair categories.

“Owners of cutting-edge technology-equipped electric and plug-in hybrid vehicles encounter more severe maintenance issues, with a three times higher rate of having to return new cars to the dealership for repairs compared to gasoline vehicles,” said Frank Hanley, Senior Director at J.D. Power.

Data shows that on average, every 100 electric vehicles experience 266 malfunctions, while gasoline and diesel cars only encounter 180 issues. This year, J.D. Power surveyed nearly 100,000 new car buyers and lessees in the United States, incorporating data from dealer repair visits for the first time to reach these results.

Similarly, a report from the American non-profit consumer organization Consumer Reports released at the end of last year also indicated that the likelihood of problems occurring with electric vehicles is 79% higher compared to traditional cars.

Common issues with electric vehicles include battery degradation over time, reduced range due to air conditioning systems, malfunctioning electronic devices inside the car, and poor sealing leading to water leaks. Additionally, in the unfortunate event of an electric car catching fire, extinguishing lithium batteries can be challenging.

Many car owners have also found that insurance premiums for electric cars are higher than those for traditional fuel vehicles. However, some owners believe that the insurance costs for electric cars are generally on par with fuel cars. Although individual circumstances vary, some insurance companies still show hesitation towards insuring electric vehicles.

Progressive Insurance Company, based in Ohio, pointed out that the insurance costs for electric and hybrid electric vehicles may be higher than traditional fuel vehicles, largely due to the higher maintenance and replacement costs of electric cars. For example, the price of a new electric car battery ranges from $4,000 to $20,000, depending on the brand and model, whereas the battery cost for gasoline cars is approximately $100 to $200. If an electric car battery is damaged in an accident, the replacement cost is significantly higher.

Aside from costly parts, there are fewer repair shops with specialized electric vehicle technicians compared to traditional gas car repair shops, leading to higher repair costs. Moreover, electric cars generally have higher purchase prices.

Progressive Company stated that these additional risks are not related to the drivers but are inherent to the vehicles themselves, which indeed result in higher claim costs for electric cars, prompting insurance companies to increase insurance rates for electric car policyholders. The company hopes that as electric cars become more widespread and maintenance costs decrease, insurance rates for electric cars will also decrease.

Currently, electric vehicles on the American market generally have higher prices, yet the resale value of used electric cars is plummeting.

A report from the American automotive trading website and authoritative research company Edmunds showed that electric cars have higher depreciation, with the resale value of used electric vehicles in the second quarter of this year dropping by 20.5% compared to the same period last year. A manager at a used car dealership in Southern California noted that the depreciation of electric cars is significant immediately upon purchase, with many facing substantial losses in the resale market.

Many surveys have also found that some consumers’ main concerns about electric cars include a lack of charging infrastructure and range anxiety while driving.