EV battery replacement insurance query

The owner of a 2013 Nissan Leaf is keen to keep his EV but has learned his insurer won’t help with battery upgrade or replacement options.

The man says his battery state of heath (SOH) is down to about 60% after five years of owning the Leaf and that a battery upgrade/replacement will cost about $20,000.

He says his insurer will pay market value for the 2013 Leaf in the event of a total loss and says it could be a serious issue for EV owners who “may not have considered this fly in the ointment before mortgaging their home for such an upgrade”.

The EVs and Beyond subscriber says an alternative would be to spend the $20,000 trading in his Leaf for a later model which would see his insurer happy to cover its true value.

“But my Leaf is otherwise in as-new condition and I’d much prefer to keep it,” he says, adding it would be a waste to scrap the EV.

An insurance expert says it appears from an insurer’s point of view the insurance company involved will only cover the market value, or if even an agreed value it would not be at an inflated value to what the market would pay for the vehicle even if it had a new battery.

“If an EV owner upgrades their battery, they may well be over investing in the unit to what it is worth to replace or resell. The same would be if a consumer spent a considerable amount to replacement a new motor in a vehicle or even, say, a large amount to renovate a house that was over capitalising on its resale sale.

“If a 2013 unit is worth, say, between $6k-$12k, to spend a further $20k on a replacement battery, there would be no way to get it back in its value for insurance or as a resale perspective.”

The insurance expert suggests trading or selling the 2013 Leaf privately and perhaps upgrading to a new 2017 model with a $26k-$30k value.

“I do understand his attachment to his vehicle, and this is a hard one.”

The expert says “that if in the future if the cost of a replacement battery cost comes down to say the $10k mark (within the next 10 years or so), then this exercise may be more financially viable when a battery is replaced to have the vehicle retain its resale or Insurance market value”.