Tesla Inc (NASDAQ:TSLA) is among firms being slated for producing batteries which are virtually impossible to replace, prompting electric vehicles (EVs) to be disproportionately written off.
Tesla’s ‘structural battery,’ which is ultimately part of the vehicle's body, prevents easy repairs and leads to third-party insurers charging higher rates.
As a result, Tesla's vehicles are often written off after just minor collisions, where a fuel-burning car would otherwise be fixed, Reuters research showed.
Batteries often account for over 50% of an electric vehicle’s price tag, with a Tesla Model 3, worth around US$43,000, being powered by a US$20,000 unit.
Cost, alongside a host of issues, including a lack of shared diagnostic data and non-existent battery recycling plants in the UK, mean it is often unfeasible to fix EVs.
“An EV isn’t very sustainable if you’ve got to throw the battery away after a minor collision,” Thatcham Research director Matter Avery commented.
Thatcham, an automotive risk intelligence company, called for a “sustainable repair framework” to be implemented in the UK, citing skill shortages and a lack of repurposing infrastructure.
“While EVs are no more difficult to repair than cars with internal combustion engines, the repairability of batteries is a key element to successful adoption of electric vehicles,” it said.
According to Reuters, US and European EV salvage sales are largely dominated by Tesla’s with low-mileages on the clocks, followed by Nissan, Hyundai and Stellantis models.
It also noted a significant rise in the number of EVs being processed by Synetiq, the UK’s largest salvage company, from an average of four to 20 a day.
“The vehicle recycling landscape is ever-changing and we’re already seeing an increase in electric and hybrid vehicles coming our way for end-of-life processing," Syentiq said in a February report.
Given EV batteries are more carbon carbon-intensive to produce than internal combustion engines, early scrapping of the ‘greener’ cars wipes out any environmental advantages of adopting the tech.
"If you throw away the vehicle at an early stage, you've lost pretty much all advantage in terms of CO2 emissions," Allianz director Christoph Lauterwasser said.
"The number of cases is going to increase, so the handling of batteries is a crucial point," he added, hinting to EV sales, which surpassed diesel-powered cars in the UK for the first-time last year.
Tesla was slammed with two class action lawsuits just last week over its alleged anti-competitive warranty schemes, which exclude drivers who take cars to independent garages to be fixed.