Tesla Electric Vehicles Written Off Due to Repair Costs

By: Georgia | Last updated: Nov 08, 2023

Insurance companies are finding it economically unviable to repair even minimally damaged Tesla Model Y electric vehicles, according to a Reuters report.

A significant number of Model Y vehicles listed in two salvage auction houses had less than 10,000 miles on them, yet the cost of repairs made it more sensible for insurers to write them off. This situation has ignited a wider debate about the ‘Right to Repair’ laws and the future of electric vehicle (EV) repairs.

Exorbitant Repair Costs of Tesla EVs

According to Reuters, the cost of fixing a Tesla EV has skyrocketed over the years, making it less viable for insurance companies to approve repairs. For example, a $61,000 2022 Model Y Long Range EV that was in a front collision would have cost more than $50,000 to fix had the insurer approved the repair.

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This has led to insurance companies like State Farm, Geico, and Progressive to decide that repairing even low-mileage vehicles is not worth the hassle.

Can You Fix Your Own Tesla?

The ‘Right to Repair’ laws are gaining traction, giving customers more rights to fix the products they buy. However, this does not necessarily mean it will be easy or affordable.

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Repairing your own car has become less common over the years, and when it comes to Tesla EVs, some insurance companies are reportedly deciding that even low-mileage vehicles aren’t worth the hassle.

How Much Does It Cost to Insure a Tesla?

In 2022, Nerdwallet reported that the average Tesla owner with a good driving history and good credit could expect to pay about $2040 a year for a Model Y and as much as $3044 for a Model X.

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The average cost to insure a Model 3 is almost 30 percent higher than the national average for car insurance. These high insurance costs reflect the expensive repair bills associated with Tesla EVs.

Tesla's Solution: Offer Its Own Insurance

Aware of the high insurance costs for its EVs, Tesla started offering its own insurance policies for customers in late 2019, promising lower costs for Tesla drivers.

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CEO Elon Musk mentioned in a recent earnings call that Tesla insurance is helping the automaker lower future repair costs and providing valuable feedback to minimize repair costs for all Teslas worldwide.

How Tesla is Using Insurance Data to Improve Design

Elon Musk mentioned in a call that small changes in the design of the bumper and providing spare parts needed for collision repair have an enormous effect on the repair cost. “Most accidents are actually small—a broken fender or scratched side of the car,” he said.

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This insight from their insurance arm is helping Tesla make necessary design changes to reduce repair costs in the future.

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Can Independent Mechanics Save the Day?

A story from The Drive in 2021 highlighted a case where a Tesla service center quoted a Model 3 owner $16,000 to fix a battery pack coolant leak caused by road debris.

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An independent mechanic was able to fix the issue for $700, showcasing the importance of the ‘Right to Repair’ issue for EVs and the potential cost savings of seeking repairs outside of the official service centers.

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Repair vs. Replace

Insurance companies are faced with the decision to repair or replace damaged Tesla EVs. The high repair costs, even for minor damages, are leading to an increased number of Teslas being written off by insurance companies.

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This raises questions about the sustainability of current repair practices and the long-term implications for Tesla owners and the EV market as a whole.

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What Does This Mean for the Future of EV Repairs?

The increasing write-offs of Tesla EVs by insurance companies highlight the need for more affordable repair options.

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This could lead to an increased demand for independent mechanics, a push for more comprehensive ‘Right to Repair’ laws, and changes in vehicle design to make repairs easier and more cost-effective.

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The Environmental Impact

Writing off vehicles with minimal damage has environmental implications as well. Manufacturing new vehicles requires a significant amount of resources and energy.

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Finding more sustainable ways to repair and maintain existing vehicles is crucial for reducing the environmental impact of the transportation sector.

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A Road to Change

The high cost of repairing Tesla EVs is leading to increased write-offs by insurance companies, sparking a broader conversation about the future of EV repairs.

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It is clear that changes are needed in the way vehicles are designed, repaired, and insured to make EV ownership more sustainable and affordable in the long run.

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Be Part of the Solution

The high cost of Tesla repairs is a concern that affects us all. Whether or not the ‘Right to Repair’ laws are the solution remains to be seen.

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Nonetheless, by staying informed and engaged in the conversation, we can all contribute to creating a more sustainable and affordable future.

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