Automotive News Canada - September 2023 - 16

16
* SEPTEMBER 2023
EVs: the big hit
For now, they cost
more to repair than
ICE vehicles - and in
turn, more to insure
By STEVE MERTL
VANCOUVER CORRESPONDENT
THE TRANSITION TO ELECTRIC
vehicles is not without complications,
including higher repair
costs for collision-damaged EVs,
and stiffer insurance premiums.
EVs cost 20 per cent to 22 per
cent more to fix than comparable
internal combustion
engine (ICE)
vehicles, according
to U.S. data
from Opus IVS,
which provides
services for the
insurance and
repair sectors.
Front-end
collisions cost
between US $3,000
and $4,000 (Cdn
$4,000 to $5,300)
more than for
comparable ICE
vehicles, said
Kevin FitzPatrick,
Opus IVS' operations
vice-president
for North
America.
Harbottle:
" We are
starting
to see
[insurance]
rates
increase
significantly
on EVs.
There is
a higher
tendency to
write off if
there is any
damage to
batteries. "
FILE PHOTO
" We see data
on the North
American side, so
you can extrapolate
from that the Canadian stuff, "
FitzPatrick said.
In the United States, insurance
premiums average about $100
more a year for EVs than for ICE
vehicles, FitzPatrick said.
" We are starting to see rates
increase significantly on EVs, "
said Bill Harbottle, president of
Jim Pattison Auto Group, which
has more than two dozen importbrand
stores in western Canada.
" There is a higher tendency to
write off if there is any damage
to batteries, which are extremely
costly to replace. "
Canadian insurers contacted by
Automotive News Canada declined
to comment on premium differentials.
BIG
HIT TO REPAIR BILL
The Insurance Bureau of
Canada's (IBC) annual How Cars
Measure Up ratings show that
EVs have a comparatively high
repair cost - Tesla ranks among
the highest - which influences
premiums, said spokesperson
Brett Weltman. But that should
improve as more EVs arrive.
A significant repair cost difference
exists between EV and
ICE vehicles, said Ryan Mandell,
director of claims performance
at the auto physical damage division
of Mitchell, a U.S. data service
provider for North American
insurers and repair operations.
Mitchell's first-quarter trends
report said EVs take an average of
1.7 hours longer to repair mechanically
and about an extra hour to
refinish cosmetically.
Several factors contribute to
higher costs and longer repair
times.
Battery packs are the single
most expensive component, running
up to $20,000 for replacement,
said Sean McIntosh, president
of Vancouver-based Kirmac
Automotive Collision Systems.
FitzPatrick of Opus IVS said
repair shops will replace a battery
if they suspect internal concussion
damage - even when damage
is not visible - which could
later cause a fire.
" It's expensive on the labour
side and expensive on the parts
side, " he said.
Mandell said Mitchell's data
does not indicate widespread battery
replacement, however.
McIntosh's experience backs
that up.
" [The EV] would have to have
undercarriage damage or maybe a
hit on the side, " he said. Kirmac's
19 locations include three Teslacertified
shops. " Your average
accident isn't involving the battery. "
POST-CRASH
COMPLEXITY
While EVs do not require the
same type of powertrain maintenance
as ICE vehicles, they
are equipped with a plethora of
electronics that often include
advanced driver assistance systems.
The related sensors require
recalibration after a collision.
EVs also use more lightweight
materials, such as aluminum
and carbon fibre. Those are less
FIXED-OPS
SPOTLIGHT
repairable, " so that's going to
drive that cost higher as well, "
Mandell said.
Another important factor is
total-loss math. Most EVs tend
to have a higher cash value
and lower salvage value than
comparable ICE vehicles. That
means EVs are more likely to be
repaired than written off.
" There's just more room to
repair those vehicles, " Mandell
said, adding that the exceptions
are entry-level models such as the
Nissan Leaf.
The salvage value of EVs
deemed a total loss is lower
because there are fewer reusable
components than for ICE vehicles,
McIntosh said. Insurers are
more likely to approve repairs.
" Which then kind of skews
things because it looks like
they're more expensive to repair,
but you just may be doing more,
larger repairs, " said McIntosh.
" The [ICE vehicle] would get total
loss. "
Repair shops also have almost
no alternative to factory replacement
parts. Mitchell's first-quarter
data found that almost 91 per
cent of EV repairs
received original-equipment
replacement
parts.
That could
change, but for
now, aftermarket
and salvaged
parts are less
readily available.
Supply-chain
problems afflicting
the entire
auto sector have
also meant delays
getting replacement
parts. Prepandemic
waits
of two days have
stretched up to a
week, McIntosh
said.
FitzPatrick:
Repair
shops will
replace a
battery even
if it appears
unscathed
after a
crash,
fearing that
internal
damage
could cause
a fire.
PHOTO:
LINKEDIN
" Anytime the
cycle time is
increased, you're
talking about the owner of the
vehicle getting a rental car for
a longer period of time, " said
FitzPatrick.
" All of these things are
increased costs to the insurance
company, which again are going
to drive up premium costs. "
- ANC
A number of factors
can make collision
damage to EVs more
expensive to repair
than for ICE vehicles.
EVs are more likely
to be fixed than
written off - driving
up the average
cost - and there's
little supply of lower
priced aftermarket
and salvage parts.
PHOTO: ISTOCK
Battery supplier's first Quebec plant might not be its last
EcoPro seeks funds from
province and the feds
for a processing facility
By DAVID KENNEDY
T ORONTO BUREAU CHIEF
A $1.2 BILLION INVESTMENT IN
Bécancour, Que., by EcoPro Co. with partners
Ford Motor Co. and SK On Co., could
be just the first step in the supplier's wider
plans for battery plants in the province.
As the company's battery-materials unit
EcoPro BM announced the long-awaited
cathode-active-materials (CAM) project
Aug. 17, another arm of the South Koreabased
supplier began talks with the federal
and provincial governments about a separate
plant in Quebec devoted to lithium
production.
According to lobbyist filings with each
level of government, EcoPro Innovation
looks to tap public funding to develop a
lithium-hydroxide manufacturing plant
at an unidentified location in Quebec.
The site, which would be capable of processing
mined lithium into battery-ready
feedstock, would likely supply the $1.2 billion
CAM plant under construction in
Bécancour, midway between Montreal and
Quebec City.
In the Aug. 13 federal filing, lobbyists
acting on behalf of EcoPro Innovation said
the company was pursuing assistance from
Ottawa's Strategic Innovation Fund. It also
seeks support from the Quebec Ministry of
Economic Development, according to the
provincial lobbyist registry.
Innovation, Science and Economic
Development Canada did not respond to a
request for comment. The department typically
declines to discuss the status of talks
with prospective investors.
SIGNS SUGGEST SECOND PLANT
While the lobbyist filings do not indicate
whether EcoPro has decided to build a second
plant in Quebec, a vertically integrated
set of plants would be consistent with
its footprint in South Korea. At the company's
Pohang campus, EcoPro Innovation
produces lithium hydroxide, which EcoPro
BM then uses to produce CAM for electric-vehicle
battery cells.
In choosing Quebec for the CAM plant,
EcoPro BM CEO Jae-hwan Joo pointed
to the province's stores of critical minerals,
its clean and cheap power supply and
its skilled workforce as key factors. He
told reporters that the company was in
Bécancour for the long term but gave no
indication about EcoPro's possible plans
for further investment.
Quebec is quickly becoming a hub for
battery-materials production as automakers
and battery-cell manufacturers build
out their North American battery supply
chains.
A joint venture between General Motors
and the chemical company Posco Future
M began building a comparable plant in
Bécancour last year. Other processing and
mining companies are pursuing plans for
facilities that will produce lithium hydroxide
as well as nickel and cobalt sulfates to
supply the downstream plants with sufficient
quantities of those battery metals.
- ANC
Automotive News Canada - September 2023

Table of Contents for the Digital Edition of Automotive News Canada - September 2023
