Breaking the Dilemma of New Energy Vehicle Insurance: The "Vehicle-Battery Separation" Model Offers a New Solution

Xinhua Finance, Shanghai, March 18 (Reporter Xu Xiaoxiao) — Currently, new energy vehicle insurance faces the dilemma of “car owners complain about high costs, insurers call it unprofitable” — for new energy vehicle owners, the high cost of parts, especially the large proportion of repair costs for power batteries, drives up insurance quotes; for insurance companies, issues such as high claim ratios, difficulty in damage assessment, and immature risk models persist.

To address this problem, Shenzhen recently proposed exploring a “separate vehicle and battery” model for auto commercial insurance products in specific scenarios like urban transportation. Local property insurance institutions have already established special working groups for new energy vehicles to study the feasibility of implementing the “separate vehicle and battery” approach.

Industry insiders say that the “separate vehicle and battery” model offers a new path for industry breakthroughs and reducing consumer burdens. By selling and insuring the vehicle and the power battery as independent objects, it is expected to significantly lower insurance premiums and reshape the pricing logic.

Exploring the “separate vehicle and battery” model

The so-called “separate vehicle and battery” means selling, managing, and insuring the vehicle and the power battery as independent objects.

In traditional new energy vehicle insurance, the power battery, as a core high-value component, accounts for a large share of repair costs in total vehicle claims, and also faces residual value decline risks. In January 2025, multiple departments jointly issued the “Guiding Opinions on Deepening Reform, Strengthening Supervision, and Promoting High-Quality Development of New Energy Vehicle Insurance,” which proposed researching and exploring the “separate vehicle and battery” model for auto commercial insurance products.

In February this year, Shenzhen issued the “Action Plan for Supporting Technological Innovation and Industrial Development by the Insurance Industry (2026–2028),” explicitly exploring the “separate vehicle and battery” model for auto commercial insurance products in specific scenarios like urban transportation.

“Shenzhen, as the first city in the country to introduce relevant regulations, has a pioneering approach,” said Zhang Xiang, researcher at the Automotive Industry Innovation Research Center of North China University of Technology. Compared with integrated vehicle and battery models, the “separate vehicle and battery” technology has lower risks of fire and explosion. This is mainly because the charging process is handled by battery swap stations, which have better safety measures; additionally, after each swap, the battery undergoes systematic checks to ensure good condition.

Zhang Xiang believes that, based on higher safety, products based on the “separate vehicle and battery” approach should receive lower damage assessment standards. As the number of swap vehicles increases, market demand for such insurance products is also growing. Continuing to use traditional new energy vehicle insurance models would put car owners at a disadvantage, increasing operational costs for swap vehicles and affecting their sales.

Expected reduction in body insurance premiums

It is reported that the “separate vehicle and battery” insurance model has already been implemented in some regions. Moreover, Shenzhen has established a special working group for new energy vehicles to study the feasibility of implementing this model.

The key impact lies in the pricing logic of new energy vehicle insurance. Xu Yuchen, partner at Yuchun Consulting and a senior actuary, said that if the “separate vehicle and battery” model can be realized, with the vehicle and battery priced and insured separately, the pure risk premium for the vehicle body part in insurance could significantly decrease.

The head of a leading insurtech company, CarCar Technology, stated that under the “separate vehicle and battery” model, the battery assets are usually held by the battery operator or the vehicle manufacturer’s asset platform, while the car owner purchases coverage for the vehicle body. Therefore, the insured value of the insured object decreases, and the premiums and rate bases for main coverage like vehicle damage insurance will also decrease accordingly, potentially alleviating the issue of “high premiums” faced by some new energy vehicle owners.

However, batteries are often priced separately through rental or service fees, and sometimes include battery protection services or insurance. From a total cost perspective, the owner’s expenditure structure may shift from “whole vehicle insurance costs” to a combination of “vehicle body insurance + battery service or protection fees,” but the overall cost structure will become more transparent.

Clarifying responsibility boundaries is still necessary

Industry insiders say that to optimize the premium structure of new energy vehicle insurance, two major issues must be addressed: one is clarifying the responsibility boundaries among different parties to ensure clear risk units; the other is defining the scope of insurance coverage.

In traditional auto insurance, the whole vehicle is insured as a single object. Under the “separate vehicle and battery” model, the vehicle and battery are two relatively independent assets. Therefore, in case of accidents or battery performance issues, responsibilities must be clarified in advance.

For example, CarCar Technology’s business leader explained that damage to the battery caused by vehicle accidents is usually covered by auto insurance or the responsible party; issues related to battery quality or degradation are more likely to be borne by the battery operator or warranty system; risks arising during battery swap or charging are the responsibility of the swap station operator.

Regarding coverage scope, Xu Yuchen believes that in the pricing models for battery-related risks, insurance pricing should revert to traditional evaluation dimensions based on driving behavior and driver characteristics, i.e., “people and vehicle” factors, mainly including the driver’s age, driving experience, accident history, and other indicators reflecting driving habits and risk preferences.

To further resolve damage assessment disputes, Zhang Ruofeng, secretary-general of the Guangdong Greater Bay Area New Energy Vehicle Industry Technology Innovation Alliance, suggested establishing a unified data sharing mechanism. In the “separate vehicle and battery” model, the battery is managed by the operator, and its full lifecycle data (such as charge/discharge cycles, health status, temperature, and maintenance records) can be continuously recorded. If standardization and sharing can be achieved among automakers, battery operators, and insurance companies, a dynamic residual value assessment model for batteries can be gradually built. Through long-term accumulation of operational and accident data, more accurate judgments of battery damage and repair needs can be made, ultimately forming an industry-wide reference system for battery residual value.

Editor: Liu Runrong