Electric Vehicles: What Used Car Dealers Need to Know About Repair Costs

As electric vehicles (EVs) gain popularity used car dealers need to be aware of the potential repair costs associated with these vehicles. Our recent research shows that EVs are up to 50% more expensive to repair than their internal combustion engine (ICE) counterparts. Understanding these cost factors is essential when stocking, pricing, and selling used EVs.

Data from 800 electric vehicle warranty claims paid by us between August 2023 and August 2024 reveals that the average warranty claim for EVs is 30-50% higher than for ICE vehicles.

The most common repairs include:

• Battery charge control modules: £1,311
• Power distribution boxes: £747
• Warning lights: £875
• Shock absorbers: £588

EVs come with unique components—such as large battery packs and electric motors—that are more expensive to manufacture and replace than traditional ICE parts. The battery is the most expensive component, with replacement costs ranging from £8,000 to £12,000 for standard electric vehicles.

While the battery is often the focus of attention, EVs come with other expensive repair issues.

Common problems include:

• Battery degradation: Frequent rapid charging can accelerate battery wear, with drivers reporting faster-than-expected degradation. On average, lithium-ion batteries lose around 2.3% capacity per year, with environmental factors like temperature playing a role. For instance, batteries in Florida last around 5.2 years, whereas in Alaska, they can last up to 13.3 years.
• In-car electronics: Failures with electric doors, temperature sensors, and other electronics are common and can be costly to fix. These issues can impact the battery’s performance or the vehicle’s usability.
• Climate control systems: Inefficient electric climate control systems can reduce a vehicle’s range, particularly in colder weather, when heating demands are higher.
• Faulty seals: Water leakage from faulty seals poses a risk to electrical components, reducing the vehicle’s reliability and comfort.

Some of the largest warranty claims paid between 2023 and 2024 further highlight the high repair costs associated with EVs:

• Transfer box and electric drive system (Audi E-Tron Sportback Quattro): £5,000
• Radio unit (Nissan Leaf): £3,654
• Gearbox mechatronic unit (Audi A3 Sportback E-Tron): £3,282

These figures demonstrate that EVs can carry significant repair costs beyond just the battery, making it crucial for used car dealers to price EVs carefully and offer appropriate warranties.

Several factors contribute to the higher repair costs for EVs:

1. Specialised components: EVs feature complex power systems and electronics, many of which are costly to repair or replace.
2. Limited repair expertise: Unlike ICE vehicles, EVs require technicians trained to handle high-voltage electrical systems, which increases labour costs. Many independent garages are not yet equipped to service EVs, forcing customers to rely on manufacturer-certified repair centres.
3. Complex diagnostics: EVs rely heavily on sophisticated software and electronics, making diagnostics more complicated and time-consuming than traditional ICE vehicles.
4. Manufacturer-specific parts: EV repairs often involve replacing parts with those from the original manufacturer, which can be pricier due to limited availability and less competition among third-party suppliers.

While EVs are often touted for having lower running costs, it’s essential to look at the bigger picture. A recent study from Cap-HPI comparing the service, maintenance, and repair (SMR) costs over a three-year period found that electric vehicles are not always the cheaper option:

• Electric VW ID.3 maintenance costs: £1,050
• Diesel VW Golf maintenance costs: £615

Despite the perception that EVs are cheaper to maintain, certain costs are significantly higher. EV tyres, for instance, are around four times more expensive than those for conventional vehicles due to having to support the additional weight of the battery.

As more EVs enter the used car market, dealers need to factor in these higher repair costs when purchasing, pricing, and selling EVs.

Here are some key considerations:

1. Offer Warranties: Given the potential for costly repairs, offering extended warranties can provide peace of mind for both you and the buyer. They can also help justify higher selling prices.
2. Educate Buyers: Be transparent with customers about the potential for higher repair costs and the need for specialised repairs. Educating them on the unique aspects of EV ownership will build trust and credibility.
3. Partner with EV Specialists: Building relationships with certified EV repair shops or investing in staff training will allow your dealership to service these vehicles more efficiently, reducing the reliance on manufacturers and helping control costs.
4. Monitor Market Trends: The EV repair landscape is evolving as technology improves and more mechanics are trained to work on EVs. Staying informed about these changes will help you adjust your pricing and service options accordingly.

Used car dealers should be aware that while electric vehicles may have lower day-to-day maintenance costs, their repair bills can be significantly higher than ICE vehicles. By understanding the common issues and repair costs associated with EVs, dealers can better navigate this growing market, ensure they are pricing vehicles appropriately, and provide customers with the best possible service.