China’s Electric Vehicle Insurance Market Faces Mounting Losses Amid Soaring Claims
Beijing – China’s once-thriving electric vehicle (EV) insurance sector is turning into a major financial burden for insurers, as claim volumes and repair costs surge far beyond expectations. Industry data show that insurers collectively lost 5.7 billion yuan ($802 million) underwriting EV policies in 2024, despite collecting nearly 141 billion yuan in premiums, according to the China Association of Actuaries.
The losses highlight how rapidly EV adoption has outpaced insurers’ ability to assess and price risk. With more than 20 million new energy vehicles (NEVs) — including pure electric and plug-in hybrids — now registered nationwide, EVs have begun outselling gasoline-powered cars in several Chinese cities. However, their owners, often younger and less experienced drivers, are filing roughly twice as many claims as traditional motorists.
Repair costs have also become a key challenge. Batteries, which account for nearly a third of an EV’s value, are vulnerable to damage and extremely expensive to replace. Meanwhile, advanced components such as sensors and chips remain costly and difficult to source, and repairs often require authorized service centers with higher labor rates.
Regulators are now stepping in. In January 2025, China introduced its first insurance guidelines for EVs and plug-in hybrids, promoting standardized coverage and data sharing between automakers and insurers. The government has also launched an “Easy to Insure” platform, which has already helped secure coverage for over 500,000 vehicles.
Despite the challenges, analysts remain optimistic. The EV insurance market is projected to reach 500 billion yuan by 2030, accounting for more than one-third of China’s auto insurance industry. Leading insurers such as Ping An, PICC, and China Pacific Insurance dominate the field, holding over 65% of market share, while automakers including BYD, Tesla, and Xiaomi are moving into the insurance space themselves. – News Agency