An insurer has warned about the high risks and costs associated with electrical vehicle (EV) fires, urging greater vigilance from motor traders
The warning from Allianz UK follows two recent fires at motor trade premises that resulted in over £5 million and £1.5 million worth of claims. As stated by the insurer, both fires were “the result of a faulty EV battery that had been removed and was stored at the garage awaiting collection from the manufacturer for investigation”.
Such fires can cause “extensive damage” and create “unique challenges”, Allianz said, with lithium-ion batteries, which are used in EVs, having been identified as a “potential risk due to their thermal instability”.
Referring to data from Thatcham Research, Allianz said that while EVs were “generally less likely to catch fire” compared to traditional combustion engines, the “intensity and severity of these fires can be significantly greater”. This was primarily “due to the ferocity with which lithium-ion batteries can burn, posing unique challenges for motor traders, particularly in relation to health and safety”.
“This has been observed in several high-profile cases within the motor trade sector. Additionally, some EV batteries have increasingly been found to have manufacturing defects, raising the risk of combustion.”
Head of motor trade at Allianz UK, Olivia Baker said: "The severity and financial impact of lithium-ion battery fires are considerable. Due to the chemical reactions and toxic material that are left behind, these fires can render buildings beyond economical repair.
“Understanding the risks and implementing effective prevention and management strategies are crucial to safeguarding businesses and ensuring the safety of employees, though thankfully at the moment the total number of claims is relatively low."
Allianz added that the “risks are heightened when vehicles are showing signs of battery defects or are subject to recalls or advisory notices linked to the battery”. To mitigate the risks, the insurer recommends motor traders:
- implement rigorous inspection protocols for damaged batteries
- Ensure proper storage and charging practices
- collaborate with insurers and brokers to prevent incidents.
The risk is not limited to just EV batteries, and in November 2024, separate research carried out by Allianz revealed that the average cost of fire-related claims involving lithium batteries was £50,000. These fires were caused by “leaking and damaged batteries and overcharged e-vehicles combusting at home”.
Angela Everington, Allianz fire-safety partner and Surrey firefighter, said: “Overcharging, or using incorrect wattage when charging, can damage the battery, causing it to overheat and even explode. Allianz’s research chimes with the trends we’ve witnessed when attending house fires, which are more frequently caused by lithium products.”
Commenting on Allianz’s most recent warning, Motor Finance Online reiterated that EV fires were rare, with the likelihood of them occurring being statistically low.