Allianz UK is advising motor traders to be aware of the risks associated with electric vehicle (EV) battery fires.
Lithium-ion batteries, used in EVs, pose a potential risk due to thermal instability. These batteries could undergo a rapid self-heating process when handled incorrectly, leading to fires and explosions that can sometimes occur days or weeks later.
Citing data from business insurer QBE, the British Safety Council previously reported that the number of fires linked to lithium-ion batteries in the UK rose 46% in 2023. Fires related to electric trucks saw a 300% increase from the previous year.
However, research, including findings from Thatcham Research, suggests that EVs are generally less likely to catch fire than traditional combustion engine vehicles. But when fires do occur, they can be more severe due to the way lithium-ion batteries burn. This creates several challenges for motor traders, Allianz UK said.
“The severity and financial impact of lithium-ion battery fires are considerable,” said Olivia Baker, head of motor trade at Allianz UK. “Due to the chemical reactions and toxic material that are left behind, these fires can render buildings beyond economical repair.”
There have been several incidents within the motor trade sector where lithium-ion battery fires have caused significant damage. Allianz UK said that two recent fires at motor trade premises resulted in claims exceeding £5 million and £1.5 million. Both incidents were linked to faulty EV batteries that had been removed and stored while awaiting collection for investigation.
Businesses should also be aware of risks associated with lithium-ion batteries in portable tools, the company said. A fire at a tyre fitting centre resulted in a £250,000 claim after a power tool caught fire while charging.
To manage the risks, Allianz UK recommended implementing inspection protocols for damaged batteries. The company said that risks for motor traders increase when vehicles show signs of battery defects or are subject to recalls or advisory notices.
The company also encouraged businesses, such as sales companies and repairers that have high vehicle throughput, to review safety procedures and risk management strategies to minimise potential hazards.
“Understanding the risks and implementing effective prevention and management strategies are crucial to safeguarding businesses and ensuring the safety of employees,” Baker commented.
