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Crashed Teslas With Low Mileage Are Being Scrapped Because They’re Too Expensive to Fix

Insurers are opting to total the EVs, many of which have less than 100,000 miles on the dial, instead of repair them.

Tesla's current model lineup Tesla

To repair, or not to repair? That is the question facing many broken Teslas.

The EVs are currently so expensive to fix that many top insurance companies are writing off low-mileage models and sending them to salvage auctions, according to a recent Reuters analysis.

Of more than 120 crashed Model Ys that were totaled and then put up for auction in December and early January, the vast majority had fewer than 10,000 miles on the odometer, according to online data from auction houses Copart and IAA.

Insurers typically total a car—that is, scrap it and reimburse the owner—when the estimated cost of repair is higher than the actual cash value of the vehicle. The retail prices of the aforementioned rides, which were all 2022 or 2023 models, ranged from roughly $60,000 to more than $80,000. Some estimated repair costs sat just under that, according to Reuters.

Tesla Model Y
Tesla Model Y. Courtesy of Tesla

For example, a 2022 Model Y Long Range that was involved in a front collision and listed by IAA in early January had a retail price of $61,388 and an estimated repair cost of $50,388. Another Model Y that suffered a side collision had a retail price of $72,667 and an estimated repair cost of $43,814.

During Tesla’s fourth-quarter earnings call on Wednesday, CEO Elon Musk said the automaker is making changes to vehicle design and software to lower repair costs and premiums. With such technologically advanced EVs, even minor bumps and scrapes can cost a fortune to fix.

“It’s remarkable how small changes in the design of the bumper (and) providing spare parts needed for collision repair have an enormous effect on the repair cost,” Musk explained. “Most accidents are actually small—a broken fender or scratched side of the car.”

The CEO added that premiums from third-party insurance companies “in some cases were unreasonably high.” He said the company was trying to counter that by offering lower rates to Tesla owners. To recap, Tesla launched its own insurance arm in August 2019, promising rates up to 30 percent lower than competitors.

Costly repairs and premiums haven’t hampered Tesla’s popularity, though. It was the best-selling EV and luxury car maker last year. It also posted nearly $3.7 billion in profits and $24.3 billion in sales for the last quarter of 2022. That’s a 59 percent increase and a 37 percent increase, respectively, from the year prior. That’s certainly something Musk can smile about.

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