EVs cost 20% more to insure than a comparable traditional fuel-powered car

Local insurance companies believe that even though Chinese manufacturers are producing new electric vehicles, they will cost more to cover. The largest auto market in the world, China, has encouraged the development of new energy vehicles by subsidising sales as well as rules that make it simpler to obtain licence plates.

More people are choosing to purchase electric vehicles as they are becoming more practical and economical. Electric vehicles are still more expensive to insure than those powered by gasoline or diesel, despite becoming more economical.

Pricing is determined by a variety of things. Insurance firms discover that new energy vehicles typically have higher loss ratios than internal combustion engine vehicles, which is a measure of cost for insurers. Since new energy vehicles frequently use parts that aren’t yet mass-produced, more accidents, especially more expensive ones, are one of the main causes of a greater loss ratio.

At least 3,000 new energy vehicle fires were recorded by a Chinese government ministry for the entire year 2021. Without providing exact numbers, it stated that the risk of fire was often higher for such cars than for conventional vehicles. In the past year, a lot of Chinese automakers have hurried to release new models, although it’s unknown how likely an accident they pose.

According to Chase Gardner of Insurify, which compares 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 partly because electric cars in the country tend to be luxury vehicles.

However, since fewer companies in the US can service electric automobiles, repair costs are another factor in higher insurance costs. While electric cars are expensive, electric car parts are even more expensive.