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

◎ 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 attributed to the power battery, 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 challenge, Shenzhen recently proposed exploring a “vehicle-battery separation” 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 “vehicle-battery separation.”

Industry insiders say that the “vehicle-battery separation” model offers a new path for industry breakthroughs and consumer relief. By selling and underwriting vehicles and power batteries as separate objects, it is expected to significantly reduce insurance premiums and reshape premium pricing logic.

Exploring the “vehicle-battery separation” model

The so-called “vehicle-battery separation” means selling, managing, and underwriting 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 portion 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 “vehicle-battery separation” 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 “vehicle-battery separation” model for auto commercial insurance in specific scenarios like urban transportation.

“Shenzhen, as the first city nationwide to introduce relevant regulations, provides a valuable reference,” said Zhang Xiang, researcher at the Automotive Industry Innovation Research Center of North China University of Technology. Compared to integrated vehicle and battery systems, the vehicle-battery separation technology has a lower risk of fire and explosion. This is mainly because the charging process is handled by swap stations, which have better safety measures; additionally, after each battery swap, the battery undergoes systematic inspection to ensure its condition.

Zhang Xiang believes that, based on higher safety standards, products based on vehicle-battery separation should receive lower damage assessment standards. As more swap vehicles enter the 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 stations and affecting the sales of swap vehicles.

Expected reduction in vehicle body insurance premiums

It is reported that the “vehicle-battery separation” underwriting 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 “vehicle-battery separation.”

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 “vehicle-battery separation” model can be realized, with separate pricing and underwriting for the vehicle and the battery, the pure risk premium for the vehicle body in insurance could significantly decrease.

The head of a leading insurtech company, CarCar Technology, stated that under the “vehicle-battery separation” 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 fees or service charges, and sometimes include battery warranty or insurance services. 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 warranty 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 vehicle is insured as a whole object. Under the “vehicle-battery separation” 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 swapping or charging need to be borne by the swap 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 “vehicle-battery separation” 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.