‘Vehicle-Battery Separation’ Insurance Accelerates Exploration

Under policy guidance, the new energy vehicle insurance market accelerates its transformation. On June 23, nine departments including the Ministry of Commerce jointly issued the 'Notice on Several Measures to Cultivate and Expand Automobile Aftermarket Consumption', which mentioned further improving the insurance coverage and service levels of vehicle insurance, and establishing a comprehensive classification system for insured vehicle models. Innovate and optimize the supply of vehicle insurance products, provide a combination product of 'basic + variable', and explore the 'vehicle-battery separation' insurance model. Currently, new energy vehicle insurance faces the dilemma of 'owners complaining about high costs and insurers complaining about losses', and the 'vehicle-battery separation' model for commercial auto insurance is considered one of the models to reshape the pricing logic of new energy vehicle insurance. In the industry's view, the 'vehicle-battery separation' model provides a new path for industry breakthroughs and consumer burden reduction. By selling and insuring the vehicle and power battery as separate subjects, it enables more precise and fairer pricing of vehicle insurance. 'Vehicle-Battery Separation' Model Offers New Ideas Since the launch of exclusive insurance for new energy vehicles in China at the end of 2021, premiums for new energy vehicle insurance have continued to grow rapidly. However, due to multiple factors such as high claim rates and incomplete social repair systems, the phenomenon of 'owners complaining about high costs and insurers complaining about losses' is common in new energy vehicle insurance. From the consumer's perspective, the high repair costs of power batteries and rapid residual value decline directly increase the insurance price of the entire vehicle, adding to the burden of car ownership. From the perspective of insurance institutions, the claim frequency of new energy vehicles is generally higher than that of fuel vehicles. Coupled with complex battery damage assessment and relatively simple risk quantification models, the loss ratio remains high for a long time, putting significant pressure on vehicle insurance operations. Against this background, the 'vehicle-battery separation' insurance model provides a new way to solve the problem. The so-called 'vehicle-battery separation' insurance is essentially about completely splitting the coverage responsibilities of the vehicle body and the battery, and underwriting them separately. As early as January 2025, the National Financial Regulatory Administration, the Ministry of Industry and Information Technology, the Ministry of Transport, and the Ministry of Commerce jointly issued the 'Guiding Opinions on Deepening Reform and Strengthening Supervision to Promote High-Quality Development of New Energy Vehicle Insurance', which proposed researching and exploring the 'vehicle-battery separation' model for commercial auto insurance products to provide scientific and reasonable insurance protection for related new energy vehicles. Currently, some regions have launched pilot programs for 'vehicle-battery separation' underwriting and have achieved initial results. For example, Chongqing Qiantu Logistics implemented the replacement of the first batch of 10 new energy trucks. Compared with traditional procurement methods, the initial investment cost was reduced by 30% to 50%, and insurance premiums were also reduced by about 30%. 'Vehicle-battery separation' is not a simple product adjustment but a fundamental innovation in the pricing system and risk management model of new energy vehicle insurance. Fu Yifu, a special researcher at Suning Bank, said that from the perspective of insurance companies, separate underwriting of the vehicle body and battery avoids the problem of excessively high loss ratios caused by mixing battery and vehicle body risks. As a standardized asset that can be transferred and monitored, battery risks are easier to quantify and manage, alleviating the high claim pressure of insurance companies caused by power battery accidents (such as fires, collision damage). The fundamental change in the pricing system is: from the original 'bundled risk pricing' to 'modular precise pricing'. Insurance companies can set rates based on independent data such as battery model, residual value, and number of battery swaps, while the vehicle body premium is only linked to the vehicle hardware risk, making pricing more precise and fair. Operational Scenarios Expected to Be First to Implement Compared with traditional vehicle insurance underwriting models, 'vehicle-battery separation' insurance opens up new ideas for solving the pain points of new energy vehicle insurance. However, as a new business model still under exploration, its implementation still needs to solve many difficulties. The core difficulty at present is data integration and the division of rights and responsibilities among multiple parties. Industry insiders said that if the asset ownership of the battery and the vehicle body of new energy vehicles is not unified (some batteries are held by battery swap operators), the battery status during swap circulation is difficult to synchronize with insurance companies in real time. In addition, the industry lacks unified battery grading standards and damage assessment rules, leading to vague liability determination during claims. According to Fu Yifu, the bottleneck that insurance companies need to break through is establishing a dynamic battery assessment model and data interfaces with battery swap operators; automakers need to solve the unification of communication protocols between the battery and the vehicle body and open battery information interfaces; battery swap operators need to improve the full life cycle traceability system for battery circulation and assume responsibility for battery safety testing and risk sharing. It must be admitted that the 'vehicle-battery separation' model for vehicle insurance still requires time to move from pilot programs to full promotion. However, the industry generally believes that as the supporting system continues to improve, the application scenarios that this model can cover will continue to expand. Fu Yifu said that the first scenarios to be promoted are operational vehicles, such as logistics vehicles, taxis, and ride-hailing vehicles. Their high-frequency battery swaps and standardized operation models can maximize battery risk controllability, and the reduction in initial costs is highly attractive to such commercial users. Home-use battery-swappable private cars are difficult to implement on a large scale in the short term, mainly because the battery circulation frequency of household cars is low, battery swap station coverage is insufficient, and consumers' psychological acceptance of battery ownership and depreciation still needs to be cultivated. In the long run, the vehicle insurance market will form a pattern where the integrated vehicle-battery model and the 'vehicle-battery separation' model coexist: the integrated model is suitable for traditional charging scenarios, while the separation model serves areas with dense battery swap networks or cost-sensitive user groups. The two complement each other to meet different needs, and the share of the 'vehicle-battery separation' model will gradually expand as battery swap infrastructure improves.

(Editor: Qian Xiaorui)

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