EV Collision Insights Report: Q1 2024

Friday, June 7th, 2024 Auto Insurance Industry Risk Management Technology

The first quarter of 2024 has seen a marked increase in the frequency of repairable claims for electric vehicles (EVs) in both the United States and Canada. According to the "Plugged-In EV Collision Insights" report by Mitchell, the U.S. saw EV repairable claims rise to 2.26%, while Canada experienced a 3.41% increase, representing approximately 40% and 38% increases respectively over Q1 2023. These increases are largely attributed to substantial price reductions in EVs, such as those by Tesla, bringing them closer in cost to internal combustion engine (ICE) vehicles.

Key Findings

Price Parity and Consumer Confidence:

• The average transaction price for a new EV at the end of 2023 was $50,798 in the U.S., only $2,040 more than a gas-powered vehicle.


• Despite the price parity, used EV prices fell over 30% year-over-year, compared to a 3.6% decline for used ICE vehicles, weakening consumer confidence in the financial viability of used EVs.

Total Loss Frequency:

• In the U.S., EVs were declared total losses 9.93% of the time in Q1 2024, up 8% from the previous quarter.


• Canadian EV total loss frequency was 7.48% last quarter, reflecting a 7% increase from Q4 2023.


• These figures align EV total loss frequencies with newer ICE vehicles, dispelling concerns of higher total loss rates for EVs.

Claims Severity and Labor Costs:

• Average severity of repairable claims for EVs was $6,066 in the U.S. and $6,810 CAD in Canada, significantly higher than their ICE counterparts at $4,703 and $5,110 CAD respectively.


• EV repairs involve more mechanical labor hours, averaging 3.04 hours compared to 1.66 hours for ICE vehicles, largely due to the complexities of managing high-voltage batteries.

EV Adoption Barriers:

• Range anxiety remains a major barrier, though public charging ports increased by 30% in Canada and 22% in the U.S. in 2023.


• Rising fuel prices may drive more consumers towards EVs, especially as price premiums diminish.

Model and Market Insights

Top EV Models by Repairable Claims Frequency:

• In the U.S., the Tesla Model 3 and Model Y were the top models, with frequencies of 32.55% and 25.58% respectively.


• In Canada, the Tesla Model 3 led at 34.53%, followed by the Model Y at 26.31%.

Top Markets for EV Repairable Claims:

• British Columbia (6.49%)


• California (4.98%)


• Quebec (4.59%)

The report underscores the evolving landscape of EV adoption, the impact of pricing strategies, and the importance of robust security measures to manage claims and repair costs effectively.

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https://www.mitchell.com/insights/auto-physical-damage/article/plugged-in-ev-collision-insights-q1-2024

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