Not ESG-Friendly: Insurers Junk Entire EVs For Minor Accidents

Not ESG-Friendly: Insurers Junk Entire EVs For Minor Accidents
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It’s a surprise that Reuters has published an article revealing that the electric vehicle revolution might not be as environmentally friendly as automakers claim. Furthermore, a scratched or slightly damaged battery pack could lead insurance companies to scrap the entire car.

“We’re buying electric cars for sustainability reasons,” Matthew Avery, research director at automotive risk intelligence company Thatcham Research, said. 

Avery pointed out, “an EV isn’t very sustainable if you’ve got to throw the battery away after a minor collision.” 

A Tesla battery pack costs tens of thousands of dollars and represents a large percentage of the vehicle’s price tag. Insurance companies have found that it’s uneconomical to replace battery packs if damaged. 

Many automotive manufacturers, including Tesla, have made battery packs a structural part of the car to reduce cost products but have shifted costs to consumers and insurers when batteries need to be replaced. 

Unless carmakers produce more easily repairable battery packs, there will be a growing number of low-mileage EVs scrapped after collisions.

“The number of cases is going to increase, so the handling of batteries is a crucial point,” said Christoph Lauterwasser, managing director of the Allianz Center for Technology, a research institute owned by Allianz. 

According to Lauterwasser, the production of EV batteries results in significantly higher CO2 emissions compared to conventional fossil-fuel models. Therefore, if these batteries are discarded with low mileage, it undermines the goal of promoting environmentally-friendly practices.

“If you throw away the vehicle at an early stage, you’ve lost pretty much all advantage in terms of CO2 emissions,” he said.

Sandy Munro, head of Michigan-based Munro & Associates, which analyzes vehicles and advises automakers on how to improve them, said the Model Y battery pack has “zero repairability.”

“A Tesla structural battery pack is going straight to the grinder,” Munro said.

So much for the EV revolution and the green “circular economy” touted by carmakers, politicians, NGOs, and climate activists… These EVs appear even worse for the environment when compared with traditional petrol-powered vehicles. 

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