Allianz UK warns motor traders of EV battery fire risks

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Allianz UK, part of the global Allianz Group, has urged motor traders to be vigilant over the risks posed by electric vehicle (EV) battery fires, which have resulted in significant damage and present unique challenges for the sector. Lithium-ion batteries, commonly used in EVs, have been identified as a potential fire risk due to their thermal instability. When damaged, mishandled, stored, or transported incorrectly, these batteries can enter a state known as 'thermal runaway', where rapid self-heating can lead to explosions.

Such incidents can occur days or even weeks after an initial event deemed responsible for the fault.

EV fire evidence

While research, including studies from Thatcham Research[1], suggests that EVs are generally less likely to catch fire than internal combustion engine vehicles, lithium-ion battery fires are far more intense and difficult to extinguish. According to EV FireSafe[2], funded by the Australian Department of Defence, "a burning ICE car may reach 815-1,000 degrees celsius, an EV up to 1,200 degrees celsius." Initial research from EV FireSafe[3] indicates that the likelihood of a passenger electric vehicle (EV) battery catching fire is 0.0012%, based on global data from 2010 to 2020.

Comparative statistics for ICE vehicles on a global scale are limited. However, country-specific reports reviewed by EV FireSafe suggest that the probability of an ICE vehicle fire is around 0.1% -- significantly higher than that of EVs. Olivia Baker, head of motor trade at Allianz UK[4], said: "The severity and financial impact of lithium-ion battery fires are considerable.

Due to the chemical reactions and toxic materials left behind, these fires can render buildings beyond economical repair. Understanding the risks and implementing effective prevention and management strategies are crucial to safeguarding businesses and ensuring the safety of employees. Thankfully, the total number of claims remains relatively low at present."

Recent incidents have demonstrated the scale of potential losses. Two motor trade premise fires, both caused by faulty EV batteries awaiting collection for manufacturer investigation, resulted in claims of over GBP5 million and GBP1.5 million, respectively.

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The risks are not limited to vehicle batteries; lithium-ion batteries in power tools have also contributed to fires. A recent blaze at a tyre fitting centre, triggered by a charging power tool, led to a GBP250,000 claim. Motor traders, particularly those dealing with high vehicle throughput, are at greater risk, especially when handling vehicles with battery defects, recalls, or advisory notices.

Franchised dealers and repairers often face additional exposure when EVs are brought in for diagnostics or warranty work. Breakdown recovery operators must also assess vehicle battery issues promptly to mitigate risks. To enhance safety and reduce the likelihood of incidents, Allianz UK recommends that motor traders:

• Implement rigorous inspection protocols for damaged batteries
• Ensure correct storage and charging practices
• Collaborate with insurers and brokers to adopt preventive measures

Risk management guidance is available from Allianz for brokers and policyholders, aiming to improve awareness and education around lithium-ion battery hazards.

By taking proactive steps, businesses can better protect their employees and assets while adapting to the growing presence of EVs in the market.

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References

1. ^ Thatcham Research (www.thatcham.org)
2. ^ EV FireSafe (www.evfiresafe.com)
3. ^ EV FireSafe (www.evfiresafe.com)
4. ^ Allianz UK (www.allianz.co.uk)
5. ^ View profiles in store (www.globaldata.com)
6. ^ Privacy Policy (www.verdict.co.uk)