Mitchell's latest trends report shows a jump
in total loss frequency for both electric and newer internal
combustion engine (ICE) automobiles.
SAN
DIEGO, June 4, 2024 /PRNewswire/ -- Mitchell,
an Enlyte company and leading technology and information
provider for the Property & Casualty (P&C) claims
and Collision Repair industries, today released its Q1
2024 trends report: Plugged-In: EV Collision Insights. This
quarter's report provides an update on EV total loss frequency,
which has risen since late last year as the price of used EVs has
fallen. In the U.S. and Canada, EV
total loss rates were 9.93% and 7.48% respectively—an increase of
approximately 8% from Q4 2023 and 30% from Q3 2023 in both regions.
Despite the dramatic rise, EV total loss frequency remains in line
with 2021 and newer ICE alternatives, which ended the quarter with
a rate of 9.51% in the U.S. and 7.44% in Canada.
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"Slowing new sales, manufacturer price reductions and changing
consumer sentiment are impacting the value of used EVs," explained
Ryan Mandell, Mitchell's director of
claims performance. "As a result, the total loss frequency for
collision-damaged EVs is increasing. However, it is also increasing
for new gasoline-powered vehicles, which are comparable to EVs in
terms of their complexity and cost to repair."
Other notable auto claim differences between EVs and ICE
automobiles last quarter included:
- Repair Labor Hours: The average number of mechanical
labor hours present on estimates for repairable vehicles was nearly
twice as high for EVs as it was for ICE automobiles (3.04 versus
1.66 hours), adding to repair costs.
- Claims Severity: Average claims severity decreased in Q1
but severity costs for EVs continues to outpace ICE vehicles. In
the U.S., the severity difference between the two powertrains was
$1,363 or 29% ($6,066 versus $4,703) and in Canada it was $1,700 CAD or 33% ($6,810 versus $5,110 CAD).
- Claims Frequency: Even as EV sales slow, claims
frequency is growing steadily, rising to 2.26% in the U.S. and
3.41% in Canada. This represents
an increase of 40% and 38% respectively over Q1 2023.
- Parts Utilization and Repair: Without a robust inventory
of aftermarket and recycled parts, EV collision repairs are more
likely to include OEM parts than those completed on ICE
alternatives (89.29% versus 65.14%). EV parts tend to be lighter
weight to offset a much heavier battery, making them more difficult
to repair. In Q1, the percentage of EV parts repaired versus
replaced was nearly 13% and, for ICE automobiles, it was closer to
15%.
Visit the Mitchell website to download the Q1 2024 report and
access the latest EV claims data. You can also subscribe to future
issues or find previous reports online at
www.mitchell.com/plugged-in.
About Mitchell International
Headquartered in San Diego,
Calif., Mitchell International, Inc. delivers smart
technology solutions and services to the auto insurance, collision
repair, disability and workers' compensation markets. Through deep
industry expertise, connections throughout the insurance ecosystem
and advanced technology such as artificial intelligence and
cloud-based solutions, Mitchell enables its customers and clients
to succeed in today's ever-changing environment. Each month,
Mitchell processes tens of millions of transactions for more than
300 insurance providers, 20,000 collision repair facilities and
70,000 pharmacies. Its comprehensive solution and service portfolio
empowers clients to restore lives after a challenging event.
Mitchell, Genex and Coventry have aligned their joint industry
expertise and advanced technology solutions to form Enlyte, a
parent brand with nearly 6,000 associates committed to simplifying
and optimizing property, casualty and disability claims processes
and services.
For collision repair and property and casualty updates and
perspectives, follow us on LinkedIn or X
(@MitchellRepair and @MitchellClaims).
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SOURCE Mitchell International