Toronto, Ontario — March 9, 2020 — Collision repairers who have not invested in preparing for the arrival of electric vehicles may be in for a shock.
According to Mitchell International’s Industry Trends Casualty Report, Q1 2020, the difficulty of repairing electric vehicles–which make use of light-weight materials–is leading to a significant increase in the severity of repairs, and a reduction in consumers’ choice in provider.
“Not only must bodyshops keep in-step with the seemingly endless increases in the complexity of repairs but carriers are also being challenged with how to appropriately price premiums in an environment where repair costs are increasing but frequency has yet to begin a significant decline as many have predicted over the last five years.“
The report also shows that other areas of the broader automotive sector are increasingly prepared for the widespread arrival of EVs.
“Automakers continue to push electrification into new segments of the industry, further intensifying the diversification that has driven the growth in sales over the past decade. Even late adopters of electronic vehicle industry trends like Subaru have recently announced plans to offer a hybrid or electric variant of every model by the mid-2030s and for hybrid and electric vehicles to account for 40 percent of their new vehicle sales by the year 2040.”
The report notes that automakers themselves are moving towards electrification at a rapid pace as well.
Mitchell’s report also highlights how governments have helped to ease the transition to electric vehicles with consumers by doubling the number of electric charging stations within the United States.
“The concept of ‘range anxiety’ or the fear of running out of electric charge while on the road is often viewed as the most significant barrier for consumers to overcome before seriously considering the purchase of an EV. A massive public spending commitment would go a long way toward breaking down this barrier.”
One of the most notable trends highlighted in the report was the fact that, while the electric vehicle segment did not soften, neither did the general public’s interest in them grow at the hectic pace seen toward the end of the past decade.
“Electric Vehicle (EV) sales did not continue the fast-paced growth seen in 2018 with the release of Tesla’s Model 3, but expert and consumer sentiments are pointing toward a bright near-term future for this industry-disrupting segment,” the report says. “Deloitte’s recently released 2020 Global Automotive Consumer Study shows that of the U.S. consumers surveyed, 41 percent would prefer an alternative energy (non-internal combustion engine or ICE) vehicle for their next purchase. This figure is up from 29% in 2019 and 20 percent in 2018.”
