Allianz UK warns of EV battery fire dangers after multi-million-pound insurance claims

The latest warning from the UK arm of the German insurance giant comes as research from Thatcham Research shows that although EV batteries are considerably less likely to catch fire, the nature of lithium-ion batteries means that when they do happen, they tend to be more intense and result in greater damages.

Motor traders globally face significant challenges in conforming to relevant health and safety regulations due to the risks of lithium-ion batteries catching fire. Most recently, two motor trade premises in the UK saw fires caused by lithium-ion batteries cause £5 million and £1.5 million in damages.

In both cases, these fires resulted from faulty EV batteries that had been correctly removed from vehicles but stored in garages, where they subsequently ignited.

Allianz UK’s head of motor trade, Olivia Baker, said, “The severity and financial impact of lithium-ion battery fires are considerable. Due to the chemical reactions and toxic material that are left behind, these fires can render buildings beyond economical repair.”

The insurer has emphasized that dealerships and auto manufacturers must have protocols to prevent EV battery malfunctions. Typically, risks are heightened when vehicles begin showing the symptoms of battery defects or when vehicles are brought in as part of a general recall.

Businesses experiencing high vehicle traffic, like garages and dealerships, are considered the highest risk because they often lack the safety protocols auto manufacturers have in place to prevent these problems.

Baker went on to say, “Understanding the risks and implementing effective prevention and management strategies are crucial to safeguarding businesses and ensuring the safety of employees, though thankfully, at the moment, the total number of claims is relatively low."

Despite these alarming stories, it’s vital to mention that lithium-ion EV batteries are considered to be safer than batteries found within internal combustion engines. The extra reliability is one reason EVs are seen as the way forward as the world tackles the issue of climate change.