Electric Vehicle Claims Spike Amid Market Shift in Q2 2024

The second quarter of 2024 witnessed a notable rise in collision claims for battery electric vehicles (BEVs) in both the U.S. and Canada. According to recent data, claims frequency for repairable, collision-damaged BEVs increased by 45% in the U.S. and 39% in Canada year-over-year, despite a decline in EV sales during the same period. Market analysts attribute this dip in sales to several factors, including market saturation and economic uncertainties.

Interestingly, while BEV sales have slowed, hybrid vehicle sales have surged. Plug-in hybrid electric vehicles (PHEVs) saw a substantial 69.7% increase in sales in the U.S. and a 75% rise in new registrations in Canada. This increase in hybrid sales has also translated into a higher frequency of collision claims, particularly in Canada, where claims for mild hybrid electric vehicles (MHEVs) rose by 28%.

In terms of repair costs, BEVs continue to be more expensive to repair compared to internal combustion engine (ICE) vehicles, with an average severity difference of 20% in the U.S. and over 31% in Canada. However, despite the higher repair costs, BEVs are less likely to require frame labor, which may suggest that their design is more effective at mitigating structural damage in collisions.

The ongoing shift in the automotive market, marked by rising claims for both BEVs and hybrid vehicles, indicates a complex landscape for insurers and repairers as they navigate the evolving demands of the electric vehicle sector.