As right-to-repair laws gain momentum, consumers are gaining more power to fix the products they own. However, repairability does not equate to ease or affordability. DIY auto repairs have declined, leaving local mechanics as a potential solution. Yet, for Tesla EVs, some insurance companies are reportedly opting to reject covering low-mileage vehicles as repairs for these cars can be exorbitant. While some luxury car brands are known for their high repair costs, insurance providers are becoming more selective in covering these expenses, especially for low-mileage Tesla EVs, as reported by Reuters.
A recent Reuters analysis of salvage auction listings for Model Y electric vehicles revealed that most of the 120 listed cars had fewer than 10,000 miles on the odometer. Despite their relatively low mileage, the high cost of repairs will keep these EVs off the road. An example of this was a 2022 Model Y Long Range, which had been in a front collision and would have required a repair cost exceeding $50,000, had the insurer approved it. The cause of the damage was not specified by Reuters, but it was reported that well-known insurance companies, including State Farm, Geico, and Progressive, declined to cover the repairs.
Tesla owners are not shirking from paying insurance premiums for their vehicles. In 2022, Nerdwallet reported that the average yearly insurance cost for a Model Y for a Tesla owner with good driving record and credit was around $2040 and up to $3044 for a Model X. The average cost of insuring a Model 3 was almost 30% higher than the national average. The exact difference in repair costs between a Tesla and other electric or ICE vehicles after an accident is uncertain, but Tesla is aware that its EVs incur higher insurance costs compared to industry averages. In late 2019, Tesla started offering its own insurance policies with a promise of reduced costs for its drivers. Lower insurance costs would certainly benefit customers, as demonstrated by a case reported by The Drive in 2021, where a Tesla service center quoted a Model 3 owner $16,000 to fix a battery pack coolant leak caused by road debris, but the issue was resolved for $700 by an independent mechanic, highlighting the significance of the Right to Repair for EVs.
Tesla’s insurance subsidiary is benefiting the automaker by reducing future repair costs, as stated by company executives. During a recent earnings call, CEO Elon Musk explained that the insurance business provides valuable feedback on minimizing the cost of repairing Teslas worldwide. Prior to Tesla’s insurance, the company lacked insight into repair costs, which were often unreasonably high, as covered by other insurance companies. Musk also mentioned that Tesla’s insurance is informing changes in vehicle design to further decrease the cost of collision repairs. According to Musk, small design changes in the bumper and providing spare parts for repairs can greatly impact repair costs, as most accidents are minor such as a damaged fender or scratched side of the car.