China’s auto market is now known to be the largest in the world, and the transition to electrification is taking place at a rapid pace. However, Chinese consumers are now dealing with the unexpected side effect of moving towards new energy vehicles, which is a huge increase in insurance premiums.
THE REASON FOR THE HIGH PRICE OF ELECTRIC CAR INSURANCE IN CHINA
Reports say that insurance premiums for new energy cars that include electric and hybrid cars are 20% higher on average than conventional fuel cars, because the loss rate is much higher for new energy cars compared to internal combustion cars, which is one of the factors that enter into insurance prices This may be higher because NEVs use parts that were not mass-produced and therefore more expensive.
Another reason for the high NEV insurance prices is the higher probability of costly accidents, as data from the Chinese Fire Department show that in the first quarter of this year, 640 NEV fires were reported, a 32% increase over the same period in 2021, which is A number that is also much higher than the record, and the total increase in car fires in general was 8.8%, and the department stated that the risk of fires is greater for new energy vehicles compared to conventional ones.
In conclusion, the increase in accidents follows the explosive growth of the NEV segment, which accounted for 3.26 million sales from January to August of this year, more than double the total sales for the same period in 2021, and 25% of total passenger car sales in China .. The question for you now is, do insurance prices deter buyers from purchasing new energy cars?