SEOUL, March 2 (Korea Bizwire) — A number of insurance companies have filed a protest against U.S. electric vehicle maker Tesla Inc.’s policy of collecting old batteries when replacing them with new ones for their EV models.
The Korea Insurance Development Institute’s Korea Automobile Insurance Repair Research and Training Center sent a letter of inquiry to Tesla Korea last month regarding the legality of the company’s battery replacement policy, industry sources said.
In South Korea, insurance companies claim ownership of old, replaced parts when their insurance plans cover their replacement with new ones.
In contrast, under company policy, Tesla collects old batteries when replacing them with new ones. If an insurance company claims ownership of old batteries, Tesla asks the company to pay around US$5,000.
In response to the inquiry, Tesla Korea has asked a professional law firm to conduct a legal review into the company’s battery replacement policy.
“The problem arises from the fact that, unlike other car parts, EV batteries are costly. It costs thousands of dollars for even old, used batteries,” an industry source said.
Other non-life insurance companies, however, are keeping their distance from the issue, believing that Tesla’s decision to change its battery replacement policy would hardly benefit consumers and insurance companies.
“Currently, Tesla offers a very competitive price for battery replacement. If insurance companies begin to claim ownership of the old batteries, Tesla will have to raise prices on par with other competitors,” an industry source said.
“It is unclear how this will affect consumers and insurance companies. It is something that we need to approach with utmost caution.”
Kevin Lee (email@example.com)