CCC Forecasts Future of EVs and How It Will Impact Auto Body Shops

CCC Forecasts Future of EVs and How It Will Impact Auto Body Shops

When it comes to repairing EVs, there are auto body shop owners out there who look at them differently.

Some view EVs as something to invest in with little chance of making a profit. Others believe they represent a golden opportunity for shops to differentiate themselves from the pack.

With any new technology, there will be those shops that will embrace it, but many will drag their feet or reject it altogether.

The time to decide whether or not to jump into the EV game is now. Despite a recent ramp up in sales in the U.S., there are still only a small number of EV auto claims and repairs out there, with the majority being in California and other Western states.

The latest CCC Intelligent Solutions Trends Report, "Electric Vehicles Go Mainstream, Implications for the P&C Insurance Economy," analyzes emerging trends in electric vehicles.

Senior Director/Industry Analyst Susanna Gotsch from CCC is the keeper of invaluable data and this report is surely no exception.

This year, the U.S. has joined numerous countries using the pandemic as an impetus to shift their vehicles in operation from internal combustion engine vehicles to electric vehicles (EVs). Driven by new federal requirements from the Biden Administration, as well as competition with China’s aggressive goals to move to an electric vehicle fleet, automakers and many of their suppliers have announced they will be making significant investments in electric vehicles and battery technologies.

Consumer acceptance of EVs is expected to grow, and sales in the U.S. have already begun to ramp up, according to CCC’s Trends Report.

EVs are only a small part of our national fleet, but those numbers are climbing. Over the four quarters ending Q2 2021, EVs accounted for only 0.54% of CCC’s national industry repairable appraisal volume. However, as sales ramp further, claim and repair volumes will grow, so understanding how EVs will change things like frequency, costs, cycle time and repair requirements is important.

The simple fact is EVs are here to stay, despite all of the misinformation out there.

The No. 1 complaint is EVs do not have sufficient range. Americans drive an average of 40 miles a day, according to the U.S. Department of Transportation, so range is not going to be an issue, according to experts. Even the shortest-range electric vehicles can travel more than twice that distance before needing to be tethered to the power grid.

The Nissan Leaf can run for an average 150 miles on a charge, while the Chevrolet Bolt EV can cover 238 miles, Hyundai Kona 258 miles, Tesla Model 3 310 miles and the Tesla Roadster 620 miles.

With battery prices reportedly falling 73% since 2010, electric cars are expected to cost the same or even less than fuel-powered cars in the foreseeable future. The International Energy Agency reported by 2020, there were up to 20 million electric vehicles on the road, a number expected to go up to 70 million by 2025.

People believe EVs are slower than gas-powered vehicles, but in fact, they’re generally quicker than their gasoline-powered counterparts.

Others claim EVs are too expensive, but if you live in a state that’s offering an income state credit or other incentives, they’re definitely price competitive.

Some folks say EVs are unsafe, but those that have been tested by the National Highway Traffic Safety Administration (NHTSA) generally get good marks.

Many assume EVs are greener than gas-powered autos, but some people say no. In fact, EV motors convert 75% of the chemical energy from the batteries to power the wheels, while internal combustion engines (ICEs) only convert 20% of the energy stored in gasoline.

Other doubters claim EVs are expensive to fix and maintain, but that’s another misnomer. It costs less because EVs don’t require regular oil changes or tune-ups, and there are far fewer moving parts to eventually fail and need replacing. They also use a simple one-speed transmission and eschew items like spark plugs, valves, a fuel tank, muffler/tailpipe, distributor, starter, clutch, drive belts, hoses and catalytic converter.

Will EV batteries end up in the landfill, people ask? The answer is a definitive no. Once depleted, EV batteries, like 99% of the batteries found in conventional cars, can be recycled. For example, used EV power cells can be used to store solar and wind energy, or they can be broken down with their more-valuable elements reused.

And finally, will EVs suck up all of the available electricity once they start dominating the market? That’s another urban tale because the U.S. can add millions of electric cars to the current power system without having to build any new power plants. Much of this has to do with the fact most electric vehicles tend to be charged at night during off-peak hours when power demand tends to be the lowest.

Up until now, most of the data about EVs has been derived from one OE---Tesla---but that is changing at a rapid rate, Gotsch said.

“Many OEs are going to introduce EVs to the public within the next few months and others are going to step up their production, such as the Chevrolet Volt and Bolt EV, as well as Nissan’s Leaf. There are 40-plus different companies currently in production of EVs, including Ford, Volkswagen and Kia.

“In states [like California], where there is a large number of EVs being sold, driven and crashed, body shops working on EVs will experience a return on their investment obviously quicker than in those states where EV sales will be slower,” she said. “It’s going to be very much like the advent of aluminum vehicles that happened back in 2015 when Ford released the F-150. Body shops at that time had to decide whether or not to pursue aluminum repairs. The challenge is how will this pay off over time and will it justify the investment?”

As repairers consider when they should make the investments in tooling and training to be able to repair EVs, it will be important to consider both the ramp in sales in their markets and how long it will take to ramp up capabilities to repair EVs.

These are tough decisions for any auto body shop, especially when you consider all of the other rapid evolution happening in our cars today, Gotsch said.

“We’re at a juncture where the technology is moving faster than ever before, with ADAS, autonomous vehicles, aluminum vehicles---EVs are just another challenge for the repairers," Gotsch said. "You’ve got to think about automotive diagnostics and re-calibrations now more than ever. Do you do it all in-house or contract with a company to outsource them? Keeping up with the technology is going to accelerate, and involves new tools, equipment and training. Also, with new technology comes the potential for increased liability.”

Nearly 40% of the total number of EV auto claims nationally for the four quarters ending Q2 2021 were in California, where EVs accounted for only 1.5% of its overall repairable volume. Only one other state saw a larger share of its repairable volume from EVs: Hawaii at 1.6%.

California will be the country’s poster child or its guinea pig---depending on how you look at it---when it comes to the future of EVs.

California Gov. Gavin Newsom issued an executive order requiring sales of all new passenger vehicles to be zero-emission by 2035 and additional measures to eliminate harmful emissions from the transportation sector. The transportation sector is responsible for more than half of all of California’s carbon pollution, 80% of smog-forming pollution and 95% of toxic diesel emissions---all while communities in the Los Angeles Basin and Central Valley see some of the dirtiest and most toxic air in the country.

“California has more EVs than any other state and a large concentration of non-domestic vehicles,” Gotsch said. “When we look at things like registrations and insurance claims, we can clearly see that more and more consumers in California are buying EVs.

"For body shops in California, gearing up to work on EVs is more immediate than with other states. But the payoff is better with a faster return on investment. The shops that are looking to expand their businesses have likely already made the investment in aluminum repairs and EVs, so they will obviously have a distinct advantage.”

For auto body shops that don’t have the tools, equipment and training to repair EVs, potential challenges will await them.

“We found out that there is definitely going to be a learning curve with EVs,” Gotsch said. “Some shops report that it’s taking longer to fix these cars, when you include diagnostics, for example. Getting paid for the added procedures will also be more universally accepted over time. Once shops become more comfortable repairing EVs, their cycle time will go down and make these repairs more profitable.”

So, if you’re an auto body shop owner and sitting on the fence when it comes to repairing EVs, maybe this report from CCC will inspire you to plug in. 

Ed Attanasio

Ed Attanasio is an automotive journalist and Autobody News columnist based in San Francisco.

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