Tesla

Hertz has recently made an exciting announcement about selling 20,000 electric cars from its fleet and replacing them with gasoline vehicles. The company mentioned one of the reasons behind this decision was the frequent accidents that the electric cars were involved in.

Hertz’s CEO, Stephen Scherr, highlighted the significantly higher costs of repairing electric vehicles. Moreover, Hertz’s decision to step back from EV sales reflects a larger challenge faced by the EV industry. Researchers at LexisNexis Risk Solutions, who analysed insurance data, have discovered that it’s not just rental car drivers who struggle with maintaining EVs in good condition.

Scherr’s remarks echoed the discoveries made by insurance analysts at LexisNexis. They found that when individuals switch from gasoline-powered cars to electric cars, they tend to be involved in more accidents. Similarly, drivers also experience a slight increase in accidents when transitioning to gas-powered vehicles, but the impact is more significant with electric cars. The data reveals that the frequency of insurance claims rises by approximately 14.3%, while the severity of claims, or the amount that needs to be paid out, increases by 14.5%.

According to LexisNexis, the number of incidents tends to rise significantly in the initial year or so after drivers switch to a new electric vehicle. However, this trend gradually diminishes as people become more accustomed to driving the new model. Interestingly, the transition from one gasoline-powered vehicle to another doesn’t pose as much of a problem, as highlighted by their findings.

Mostly a Tesla thing

Both Hertz and LexisNexis primarily rely on Tesla when it comes to “electric vehicles”. Tesla dominates Hertz’s EV fleet, accounting for 80% of it. Similarly, among privately owned electric vehicles, Tesla holds the majority share as they constitute the majority of all new EVs sold in the US.

It appears that there might be a specific factor related to Tesla that is leading to a higher number of accidents compared to other vehicles. Interestingly, LexisNexis researchers had already observed similar patterns in China, a country with a larger number of electric vehicles, including those that are not manufactured by Tesla.

LexisNexis conducted a study analyzing insurance claims for new electric vehicles that were purchased to replace a gas vehicle within a household. The analysts tried to balance out various factors like driver age, household income, and insurance coverage level as much as they could.

In households where both a gas and an electric model are present, crashes occur more often. This indicates that constantly switching between the two types of vehicles worsens the problem. Additionally, the decrease in crash frequency over time suggests that lack of familiarity plays a role in these incidents. According to Xiaohui Lu, head of EV research at LexisNexis Risk Solutions, these findings highlight the importance of understanding the vehicles we drive.

The Highway Loss Data Institute, an organization in the United States that is supported by the insurance industry, has not discovered any increased crash rates for Tesla vehicles or other electric vehicles (EVs) in general, based on their analysis of insurance claims. However, it is worth noting that Tesla vehicles do tend to have higher claim costs, as reported by the HLDI.

EV driving quirks

There are several similarities between driving an internal combustion-powered vehicle and an electric model like a Tesla. Both have a brake pedal, an accelerator pedal, and a steering wheel. However, there are distinct variations when it comes to driving a Tesla or any other electric model compared to gasoline-powered cars.

For example, Tesla cars don’t come with a traditional “Start” button to power the vehicle on and off. Instead, as soon as the driver takes a seat, the car instantly turns on and is ready to hit the road. When the driver exits the vehicle, it automatically shuts down. Since it’s an electric car, there’s no engine noise or vibration, making it sometimes challenging to distinguish between the car being on or off.

Lu emphasized that electric vehicles like Tesla are particularly fast, which is crucial for insurance purposes. Thanks to their robust electric motors, they can accelerate at a much faster rate compared to conventional gasoline-powered vehicles.

Take, for example, the Tesla Model 3 Long Range. Even without being a specifically performance-focused model, it can accelerate from zero to 60 miles per hour in just 4.1 seconds, as reported by Car and Driver. In comparison, the BMW 330i takes over a second longer to reach the same speed. According to Car and Driver’s tests, the Tesla Model 3 Performance variant accomplishes this feat in a mere 3.1 seconds. Such impressive acceleration was typically associated with high-performance sports cars until Tesla came along.

In the world of insurance, there has always been a strong correlation between the power of a vehicle and the number and severity of insurance claims. Speedy cars tend to collide more frequently and with greater impact, resulting in a higher number of accidents that are more severe in nature. Additionally, electric vehicles (EVs) do not produce the typical engine noises associated with rapid acceleration and high speeds, which could potentially make drivers less conscious of their speed.

In addition to their increased speed, electric vehicles (EVs) are also bulkier compared to gas-powered vehicles due to their sizable and compact battery packs. Consequently, this weight disparity contributes to greater impact and damage when an EV collides with another vehicle, leading to elevated insurance claims.

Lu explained that it’s not just about high speeds. The ability to control speed is crucial, especially in low-speed areas such as parking garages, where there are other vehicles and concrete posts nearby. Unlike gas cars, electric vehicles don’t need the engine to rev up before they can start moving. They respond to pedal pressure in a different way.

Lu explained that most drivers are accustomed to operating internal combustion vehicles and tend to apply the usual amount of pressure on the accelerator pedal. However, the driving experience is quite distinct, especially in areas with lower speeds.

Electric cars are equipped with a feature called “one-pedal driving,” which allows the vehicle to slow down quickly when the driver releases the accelerator pedal instead of coasting. However, relying solely on one pedal for both starting and stopping can be confusing during emergencies, as it may require a sudden and forceful press on the brake pedal.

Lu stated that many drivers are likely to feel at ease operating their new electric vehicles even with less than three years of experience.

However, the research findings suggest that the confidence could be unfounded.