Electric or (Com)bust: EV Prices Drop, Claims Severity Remains High

Though electric vehicle (EV) prices have dropped, the severity of insurance claims for their repair still outpaces that for internal combustion engine vehicle (ICE) claims, according to an analysis by collision repair information provider Mitchell. These claims include auto glass repair claims.

Telsa’s prices were about 22% lower at the end of 2023 than they had been at the same time the previous year, according to Forbes. This sparked a price drop for other EVs. According to Mitchell, this means EV prices and ICE prices are much more similar to each other than they had been prior to the price drop. The analysis cites information from Cox Automotive stating that the average EV transaction price at the end of 2023 was a little over $50,000, only about $2,000 more than that of a gas-powered vehicle.

Despite the lower average vehicle prices for EVs, Mitchell says their repairable claim severity remains higher. The average U.S. claim severity for all EVs, including Teslas, was $6,066 for the first quarter of 2024, while the average U.S. claim severity for ICEs was $4,703.

Regarding total loss frequency, EVs now closely match newer ICEs. In the first quarter of 2024, EVs were considered total losses 9.93% of the time in the U.S., up 30% from the third quarter of 2023 and 8% from the fourth quarter. In the first quarter of 2024, 2021 and newer gas-powered vehicles were considered total losses 9.51% of the time.

Mitchell reports that for the first quarter of 2024, the repairable claim rate for EVs was 2.26% in the U.S., 40% higher than in the first quarter of 2023.

This article is from glassBYTEs™, the free e-newsletter that covers the latest auto glass industry news. Click HERE to sign up—there is no charge. Interested in a deeper dive? Free subscriptions to Auto Glass Repair and Replacement (AGRR) magazine in print or digital format are available. Subscribe at no charge HERE.

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