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High Tesla repair costs causing insurers to write off low-mileage EVs

According to Reuters, Tesla electric vehicles are expensive to repair, causing insurers to write off low-mileage Tesla Model Ys that have been in crashes, which are then sent to salvage auctions.


High Tesla repair costs causing insurers to write off low-mileage EVs p
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Elon Musk, Chief Executive of Tesla, described the company’s efforts to lower its vehicles’ cost of repair in a recent earnings call: 

“We’ve actually adjusted the design of the car and made changes in the software of the car to minimize the cost of repair… So it’s giving us this really good feedback before, again, reducing cost.”

“It is also giving us a good feedback loop into minimizing the cost of repair of Teslas — for all Teslas worldwide — because we obviously want to minimize the cost of repairing a Tesla if it’s in a collision… And previously, we didn’t actually have good insight into that because the other insurance companies would cover the cost. And actually, the cost in some cases were unreasonably high.”

According to a Reuters analysis, ‘the data on crashed low-mileage Teslas showing up at auction presents a slightly different – and previously unreported – picture.’

Online data from the two largest salvage auction houses in the USA, showed that the vast majority of over 120 Model Ys (retail value of approximately $60,000 to over $80,000), that were written off after collisions and then listed at auction at the end of 2022 and the beginning of 2023, had done less than 10,000 miles.

The salvage auction houses auction listings note whether the vehicles were involved in front, rear or side collisions, and typically include after-crash photos of each vehicle. But the listings do not disclose specific details on the type of damage suffered.

Insurance companies typically choose to write off a vehicle, scrap it and reimburse the owner, when the estimated cost of repair is deemed too high, but according to an online salvage auction, listings, in some cases, included the names of insurance companies that had bought back crashed vehicles, then listed them at auction. 

Insurance companies contacted by Reuters either declined to comment or did not respond immediately to requests.