Electric ‘muscle cars’ place insurers in dilemma
With electric cars putting up record performances in acceleration and overtaking and becoming ‘muscle cars’ by nature, insurers are placed in a dilemma. Should they raise the premium to cover the increased risk or are EVs just safer, on the contrary, while equipped with the latest safety technology?
A short survey by financial newspaper FD with the Dutch insurers learns that in the Netherlands, model-country in Europe when it comes to EVs after Norway, insurance premiums for electric cars are already higher than for cars with a classic combustion engine.
Today, this has more to do with higher values of the car and higher repair and salvage costs than with higher accident risks. But insurers are awaiting more detailed EV accident data to adjust their policy.
Mustang Mach-E fuels the debate
The announcement of the Mustang Mach-E has fueled the discussion lately. But in fact, nearly every electric car has become a ‘muscle car’, as maximum torque is instantly available at all times, while conventional combustion engines have to rev up to build up torque.
When Ford developed the Mustang Mach-E for a price that will vary between 45.000 and 65.000 dollars, they certainly have been looking in Tesla’s direction, especially the Model 3.
The power output of the Mustang varies between 248 kW (337 hp) and 342 kW (465 hp) accordingly; the torque is 565 Nm or 830 Nm. The fastest version of the Mustang Mach-E accelerates from 0 to 100 km/hour in less than four seconds.
Tesla Model 3 ‘muscle car’
The Tesla Model 3 has a power output of 358 kW (487 hp) and sprints from 0 to 100 km/hour in 3,7 seconds. It also has plenty of torque available instantly: 639 Nm. And the top speed is also in the ‘muscle car’ range with 261 km/hour, although it’s not looking like one at all.
To compare: today’s most powerful Mustang Shelby GT500 with a big 5.2-liter supercharged V8 engine pulls out all the stops with figures like a max power of 760 hp (@ 7.300 revs) and 847 Nm of torque (@ 5.000 revs). It accelerates to 100 in less than four seconds and has a launch-control option for racing circuit use.
For the average family man
Can you imagine this kind of power in the hands of the average family man or woman without any experience of racing? It’s happening nearly unnoticed with electric cars today. While the number of accidents with EVs is low due to the fact that they only represent a fraction – often less than 1% of the total car fleet – things are changing with sales of EVs doubling in Europe.
So will insurance premiums follow and rise as more accidents with EVs are likely to happen? Or will they decrease as these types of cars on average are better equipped with Advanced Driver Assistance Systems (ADAS) and even will become autonomous in a further future?
But just today, a Dutch Safety Board report raises serious doubts whether these ADAS systems actually make driving more dangerous instead of safer as drivers tend to be less attentive and often rely too much on the technology.
No simple answer
The question has no simple answer, the Dutch insurers reply. “The fuel type of the vehicle is just one of the factors to determine the premium,” says Centraal Beheer. “Brand and type of car play a prominent role, for instance, as do the age of the driver and the area the car drives mostly.”
Apart from the fact that electric cars are becoming ‘muscle cars’ unless the industry would decide to limit them, EVs are silent and pedestrians and cyclists often don’t hear them coming, which increases the risk of accidents. On the other hand, insurers point at the higher chances that the battery gets damaged in an accident with higher fire risk and salvage costs as a result.
The lithium-ion batteries in electric cars are very difficult to extinguish when on fire. They self destruct by a chain reaction with ever-mounting heat generation. Firefighters often have to put the car in a container with water to be sure it won’t again burst into flames later. So it looks that the final word about the riks of electric cars isn’t said yet.