Tesla Repair Costs Lead Insurance Companies to Write Off Damaged Brand-New EVs

Tesla-repair-costs-too-high-totaled

It has been covered several times how difficult Tesla vehicles are to repair. Concerned with maximizing Tesla Service Center times, the EV maker often charges a fortune to replace complete modules when swapping a single part would do the trick. 

Reuters verified this has a negative effect beyond these fixes: It is making insurance companies write off brand-new EVs because they are too expensive to repair.

Reuters checked more than 120 Model Y units totaled after crashes and listed on auction sites such as Copart and IAA in December and January. Most of them had fewer than 10,000 miles on the odometer, which shows how expensive it was to fix these vehicles and put them back to work.

The analysis did not reveal how extensive the damages were or if they affected the battery pack, a component that alone can cost more than $20,000. 

Reuters gave some repair examples that show just how serious the issue is. One 2022 Model Y Long Range built in Austin had a retail price of $61,388. Fixing the damages caused by a front collision would cost $50,388. Another Texan Model Y suffered a side crash. While it had a retail price of $72,667, repairing the EV would demand $43,814.

The media outlet tried to talk to Tesla, insurance companies, Copart and IAA, but all followed the EV maker’s lead of not answering questions. Tesla CEO Elon Musk touched on the subject at the Q4 2022 earnings call in his typical fashion.

According to Musk, premiums from insurance companies were “unreasonably high,” which explained the company’s success with its insurance branch. He did not mention---and nobody asked---if it was not the other way around: What if Tesla was forced to create its own insurance policies to cope with the high prices of fixing its own cars?

Musk also shared something that seemed like a late realization: "It's remarkable how small changes in the design of the bumper (and) providing spare parts needed for collision repair have an enormous effect on the repair cost.” 

Car companies have known that for ages. There are even insurance company organizations that suggest these changes in order to lower repair costs. 

Musk also said the company wants “to minimize the cost of repairing a Tesla if it's in a collision."

The first mass-production Tesla was delivered in 2012, and the most recent new passenger vehicle it presented dates from 2019. This must be the first time Musk or Tesla disclosed any concern with repair costs or providing the necessary components for them. In fact, the EV maker is famous for fighting against Right to Repair regulations.

We thank autoevolution for reprint permission.

Website Rt Graphic Ep.51 Nancy Rolland 600x400 1.9.24

Shop & Product Showcase