As the automotive industry transitions towards EVs, many important questions have arisen about maintaining these increasingly complex and expensive vehicles. The average cost of a new car is 28% higher than it was pre-pandemic, and as technology continues to advance, it is likely that the cost to maintain these vehicles will become a major financial burden for consumers without financial assistance. In order to offset some of these concerns, OEMs have offered extended manufacturer warranties on their new vehicles, guaranteeing that issues with new cars are addressed in a sustainable manner that does not overburden the consumer. However, questions are starting to arise concerning the larger coverage afforded to EVs and specifically EV batteries. Often involving expensive and complicated repairs, OEMs need to be prepared to adjust to the changing realities of the green vehicle market. An approach that OEMs can implement to sustain these extended warranties is the monitoring of battery health through connected services.
Generally, the average warranty for an ICE car is five years/60,000 miles. For hybrids and EVs though, the warranty requirement has been increased to 8-10 years/100,000 miles. This is intended to protect EV owners from the degradation of the vehicle’s battery packs, which make up 30-40% of the total production cost of each unit. If a battery pack dips below 70% (may slightly vary) within the valid time frame of the warranty, automakers are on the hook to replace the unit. On a $120,000 Lucid Air, that new battery pack may cost up to $40,000 alone. It is obvious that consumers need protection from incredible costs like this, but OEMs are looking to develop methods to reduce the frequency in which these kinds of warranty claims have to be processed and paid out. As the OEMs increase production of EVs, this financial risk will only continue to rise, perhaps deterring some manufacturers from developing better EVs and more advanced battery technology.
The answer lies in the connected car space. With so many capabilities already available, connected vehicles communicate thousands of different points of data to manufacturers nearly constantly, essentially providing live vehicle status to an OEM. In order to reduce the probability of warranty claims, OEMs can incorporate battery health preserving strategies into the connected vehicle systems. For example, a user facing methodology could involve having messages on the infotainment screen recommending the optimal temperature or warning of excessive heat/cold that could damage the battery. Other messages may include tips encouraging owners to prevent their vehicles from dying completely or remaining at 100% charge for an extended period of time. Messages and advice delivered directly to the user would be a cost effective and relatively simple initiative to cut warrant claims down and therefore reduce both risk and cost.
In a more complex sense, OEMs could retool their connected vehicle architecture to implement elements of predictive maintenance. While not nearly as economical as messaging, taking this approach would allow owners and manufacturers to learn the strengths and pitfalls of the way their vehicles are being managed and possibly steer them towards more sustainable ownership and maintenance. On the OEM side of the equation, using predictive maintenance for batteries could be a very effective way to anticipate costs and better understand the hard data behind why battery packs fail. As more EVs are produced and end up on the road, the sample set for OEMs to draw data from will only increase, leading to better predictions and the reduction of costs. Predictive maintenance data could even serve to improve vehicle and battery designs. Using connected vehicle strategies and technology to answer battery longevity concerns is a very feasible way to overcome the struggles of EV ownership and maintenance costs.
As with all new technological advancements, unanticipated growing pains are an inevitability. Thus far, the movement toward EVs has been increasingly successful, but in order to ensure that their adoption can continue unabated, mitigation of maintenance costs must be researched and implemented. Connected vehicle is one of the fastest growing and most cutting edge components of the greater EV market, and utilizing it to solve battery issues is one of the most straightforward paths toward cost reduction and quality improvement. As vehicle costs increase, consumers and manufacturers will continue to demand ways to both save money and make a profit, and focusing on maintenance, health, and quality are the best ways to not only answer these questions, but to also guarantee a sustainable future.
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