Sales of electric vehicles (EV) grew nearly 200% between 2020 and 2021, and these vehicles are projected to make up a third of all automobiles on the road by 2030.¹ While these vehicles are highly desirable for a variety of environmental reasons, EVs also bring new risks that require specific skills and knowledge to repair and maintain.

The powerful lithium-ion batteries in EVs are more fragile than batteries in internal combustion engines and can be prone to fire if they are improperly manufactured or installed. In late 2021, General Motors recalled more than 140,000 Chevrolet Bolts because of a battery issue that led to fires.² And fires from the lithium-ion batteries in EVs can heat to 1,300 degrees in seconds and take a full day and require enough water to fill a swimming pool to put out.³

5 Steps to Reduce the Risk

As with any evolving technology, EVs bring unknown risks. Dealers planning to service and sell EVs need to educate and train themselves and staff on the potential exposures. Auto dealers should follow these five steps:

1. Educate and train staff. Everyone on site — from mechanics to salespeople to administrative staff — must be trained in the risks related to electric vehicles. This includes safety measures for charging EVs, the proper protective equipment (PPE) needed for handling batteries and safe disposal methods. Don’t forget to address less obvious hazards, such as the potential for hydrogen fluoride to build up in unventilated areas during the charging process, and the risk of electrical shock when working on charging stations and EVs without high voltage safety gloves.

2. Consider risks of charging stations. Auto dealerships servicing and selling EVs will need charging stations, which can pose a fire risk if they lack adequate ventilation or temperature controls, if charging vehicles are placed too closely together or if electrical circuits are not properly installed. Ensure circuits are dedicated to charging stations and can handle the electrical load associated with EV charging, and consider segregating these areas from the main dealership buildings.
   Many dealers are offering after-hours access to charging stations and placing them in front of showrooms. Dealers need to consider surveillance upgrades to maintain the safety and security of the premises after hours and add automatic fire detectors and warning systems to charging areas.

3. Check cyber security. EVs require regular software updates, and additional cyber controls and insurance may be needed to protect the dealership from potential data breaches related to those activities. Be sure to consider the security of charging stations as well, which hackers have targeted to steal driver financial information or access EV operating systems.

4. Develop formal processes. Create policies for battery handling, systems checks and EV charging, and include procedures for the disposal of lithium-ion batteries. For example, outline PPE requirements for handling damaged or end-of-life batteries, and rules for storage, such as placing depleted batteries in containers of sand away from combustibles until they can be recycled.

5. Build a relationship with experts. With large auto manufacturers competing to release new EV models, they’re eager for their dealers to understand the technology and be able to explain the incentives of purchasing EVs to consumers. Reach out to EV experts who can help with education and training and help the dealership stand out as a knowledge leader of EVs.

Contact HUB International’s transportation insurance experts to learn more about the managing risk associated with electric vehicles.

¹ McKinsey & Company, “A turning point for US auto dealers: The unstoppable electric car,” September 23, 2021.
² AP News, “GM extends recall to cover all Chevy Bolts due to fire risk,” August 20, 2021.
³ Forbes, “Considering an Electric Car? Review the Risks and Learn How to Stay Safe,” July 27, 2021.