Electric Vehicle Collision Claims Surge Amid Tax Incentive Expiration

Recent Trends in Electric Vehicle Collision Claims

As the market for electric vehicles (EVs) continues to evolve, recent insights from the Plugged-In EV Collision Insights report, produced by Mitchell International, have shed light on remarkable trends in collision claims and sales.

In the third quarter of 2025, the frequency of collision claims for repairable battery electric vehicles (BEVs) reached a staggering 3.21%. This figure marks a significant rebound from a prior decline recorded in the second quarter, catalyzed by the pending expiration of government tax incentives which has ignited a surge in BEV sales across the United States and Canada.

According to Ryan Mandell, VP of Strategy and Market Intelligence at Mitchell, these fluctuations underscore an immediate correlation between policy changes and the adoption rates of BEVs, as well as the related collision claim trends in both nations. "With uncertainty arising from recent political and trade scenarios, automakers are diversifying their product lines to include more hybrid and gasoline options, prompting a reassessment of their BEV investment strategies," Mandell noted.

Breaking Down the Data

The latest report reveals critical metrics regarding the severity and frequency of claims. On average, the collision claim severity for BEVs diminished to $6,185 in the U.S. and $6,954 in Canada, indicating slight decreases of 2.4% and 1.5% respectively since the last quarter. In stark contrast, vehicles powered by internal combustion engines (ICE) demonstrated the lowest average claim severity, followed closely by mild hybrid electric vehicles (MHEVs) and plug-in hybrids (PHEVs).

Geographical analysis shows that regions with higher concentrations of BEVs are experiencing greater collision claim frequencies. For instance, British Columbia reported that 8.74% of all repairable vehicle claims were attributed to BEVs last quarter, while Quebec and California followed closely with 8.37% and 6.50% respectively.

When considering total loss market values, BEVs averaged around $29,827, a decrease of roughly 1% from the previous quarter, comparing unfavorably to the $13,979 value for ICE vehicles. Such discrepancies illustrate the financial implications of transitioning toward fully electric frameworks in the automotive landscape.

Moreover, lacking a robust alternative parts ecosystem for BEVs, original equipment manufacturer (OEM) parts account for the majority of repair expenditures. The report indicates that approximately 85% of parts financing for repairable vehicles during Q3 were allocated towards OEM parts, a figure that reflects a slight uptick from prior trends, while the proportion for ICE parts stood at 62%.

Conclusion

This data not only marks a pivotal moment in electric vehicle dynamics but also poses ongoing challenges for auto insurers and collision repairers. With the landscape of vehicle electrification becoming increasingly complex, both sectors must adapt strategies to accommodate a wider variety of drivetrains. This transition represents a gradual yet uneven progression toward a more electrified automotive future, thereby reinforcing the need for enhanced training and preparedness within these industries. As the market changes, stakeholders will need to stay agile and informed to effectively navigate this evolving terrain.

For those interested in a deeper dive, the complete Plugged-In EV Collision Insights report can be accessed via Mitchell's official website. Interested parties can subscribe to future publications as well to stay abreast of ongoing trends in this burgeoning sector.