[Summary: Insurance premiums for new electric cars in China are 20% higher than traditional fuel-powered vehicles. Electric cars tend to have greater loss ratios than internal combustion engine vehicles. In the U.S., insurance for electric cars is 15% more expensive than that for combustion engines. New energy cars in China are more prone to fires than traditional fuel-powered ones. 640 new energy vehicles reported fires in the first quarter, 32% more than in the same period last year. In the U.S., accidents involving combustion engines, hybrids, and electric cars all occur at the same rate.]
New reports have estimated the cost of insuring new electric cars to be 20% higher in China than it would be for similar old fuel-powered cars.
CNBC quoted Wenwen Chen, director at S&P Global Ratings, who leads the firm’s research for China insurance, as saying, “In general, the insurance premium for new energy vehicles, which includes electric cars, is about 20% higher than it would be for comparable traditional fuel-powered cars.”
Although a variety of factors influence pricing, according to Chen, insurance companies find that new energy cars tend to have greater loss ratios than internal combustion engine vehicles. One of the main reasons she cited for a higher loss ratio is more accidents, especially more costly ones, since new energy vehicles do not often use mass-produced parts as they are not available yet.
According to Chase Gardner of Insurify, which analyzes auto insurance prices in the U.S., insurance for electric cars in the country tends to be around 15% more expensive than that for cars with combustion engines. This is primarily because electric cars in this nation tend to be luxury vehicles.
But as Gardner noted, “fewer shops have the capability to service electric cars in the U.S.,” which contributes to higher repair costs. In general, EV drivers experience lower long-term maintenance costs. Once more, the crucial query is, “Do you have an accident?”
According to Insurify’s analysis of the U.S. market, accidents involving combustion engines, hybrids, and electric cars all occur at the same rate.
The Fire and Rescue Department of the Ministry of Emergency Management states that new energy cars in the nation are more prone to fires than traditional fuel-powered ones. 640 new energy vehicles reported fires in the first quarter, 32% more than in the same period last year.
According to the ministry, this increase was significantly higher than the 8.8% overall increase in car fires. There were no more recent statistics available.
The government reported at least 3,000 new energy vehicle fires for the entire year 2021. Without providing exact numbers, it said that the risk of fire was generally higher for these cars than for traditional cars.
As the number of new energy vehicles has grown in China, the number of fires is also increasing.
According to the China Passenger Car Association, the sold number of new energy passenger cans was 3.26 million from January to August, which is more than double the same period last year and accounts for roughly 25% of all passenger cars sold in the nation. Last year, that percentage was about 15%.
In contrast, the market for new energy cars in the United States remains very small.
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