Insurance for electric and hybrid cars is more expensive in Ecuador, but sales of these vehicles are growing

The market for electrified vehicles (a term that includes 100% electric vehicles and hybrids that combine fuel in their operation) has grown 642% in the last five years.

Access to new technologies and tax breaks have boosted sales of electrified cars in Ecuador.

The trend continues this year, as a total of 8,364 new electrified vehicles were sold in the first nine months of 2023 (January to September), an increase of 58.1% compared to the same period in 2022.

In the same period of 2019, 1,127 electric and hybrid cars were sold.

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Namely, September was the month in which the most of these vehicles were sold since they became available in the country with a total of 1,091, which is 87.8% more than in the same month of 2022.

Diversification of supply is also fueling the electrified market, as the number of available models has increased by 720%, from 13 models in 2015 to 107 in 2023, according to Genaro Baldeón, executive president of the Association of Automobile Companies of Ecuador (Aeade).

Although sales of this type of car are on the rise, insurance is more expensive compared to classic gasoline or diesel cars.

Karina Galarza, technical manager of Marseguros, explains that the same coverages valid for other types of vehicles are regularly offered, because it is the same standard product.

Although he admits that “spare parts tend to be more expensive and more specific.” Therefore, the price of the monthly premium depends on the insurer. “But what is being negotiated is that they are sent to the dealer when they have an accident, directly to the dealer, not to a multi-brand workshop.”

One of the differences is that the deductible is slightly higher than the one paid for gasoline vehicles, he adds.

“There is no standard rate, it depends on other factors, such as the driver’s age, marital status, the price of the car and who is driving, because there is no special product for that type of car,” says Galarza.

The international insurer’s website publishes one available for Ecuador in the electric and hybrid vehicle category in its network of plans that offers a monthly premium of $81 for a range of coverage amounts ranging from $40,000 to $80,000.

The costs have not yet been fully defined as insurers are still calculating the average prices that result when repairing an electric car.

It is clear that their repair cost is higher compared to gasoline or diesel ones, especially because of the battery.

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An article about Hertz, which renewed its fleet of rental cars by purchasing electric ones, shows that car repairs can become twice as expensive as fossil fuel cars in the United States, because the battery is replaced frequently.

Claims related to electric vehicles are 25% higher than those for combustion. And repairs can take 14% longer due to challenges in procuring spare parts and finding specialist technicians, according to a study by consultancy Thatcham.

Since these are relatively new cars on the market, there is no historical maintenance data, which makes it difficult to determine average prices.

Patricio Salas, president of the Federation of Insurance Companies (Fedeseg), confirms that insurers operating in the country are dealing with this problem due to the increase in sales of this type of vehicle: “The domestic market has not yet harmonized its prices. technicians to that reality. It is a global trend that will have to be resolved, for the sake of the sustainability of insurance,” he points out.

What are the best-selling electrified cars?

Electrified vehicles already have a share of 8% in the total number of cars sold in Ecuador by September of this year. They are three points more than the weight they had on the market until the same month last year.

It is the second market with the highest penetration of these technologies in the Latin American region, surpassed only by Colombia.

The cheapest model is the JY7222 of the Jiayuan brand, whose reference value is $9,200. It is fully electric and for city use. It allows you to travel with a range of 80 to 100 km and charge from a 110 or 220 volt outlet in six to eight hours.

Therefore, the following ones with higher passenger capacity and distance covered after each charge (range) cost starting at $17,000. These include hybrids that combine electricity and fossil fuels, although they use less gasoline than conventional ones, such as the Suzuki Swift, which is the best-selling electrified car in the country.

Electrified vehicles include MHEV (light hybrid), HEV (conventional hybrid), PHEV (plug-in hybrid), EREV (extended range electric) and BEV (battery electric) technologies.

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The number of electric stations has almost tripled since December 2022

Of the 8,364 new electrified vehicles sold this year, 9.2% correspond to electric and plug-in hybrid cars, of which there are 770 (507 electric and 263 hybrid).

They require a power connection as part of their operation.

Electric and hybrid cars use several types of technology that are generally summarized in three.

The first corresponds to 100% battery electric vehicles known by the acronym BEV (Battery Electric Vehicle), which after reaching a certain autonomy must be connected and charged from an external energy source. They are emission-free, but have limitations when moving from one place to another because they require charging.

Its participation in the market of electrified cars is negligible precisely because of the limitation of movement between cities, because the infrastructure of electric stations is missing.

Another technology is known by the acronym PHEV (Plug-in Hybrid Electric Vehicle), which includes hybrids that can work either with an electric motor that needs to be plugged in and charged or with a fossil combustion engine, these are plug-in hybrids.

Sales of new plug-in electric vehicles per year

Sales of new plug-in hybrid vehicles per year

Source: Association of Automobile Companies of Ecuador (Aeade)

Electrical installations for connecting them are found in homes or even in companies that have them, but there are also options in the cities of the country, such as gas stations, shopping centers and public charging stations in certain places.

They make it possible to cover longer distances since there are electric stations in the middle of the routes and these cars have a specific autonomy with each full charge.

Aeade reports a total of 214 charging points as of this October in the country. As of December 2022, there were 82 charging stations (power lines) distributed in Guayaquil, Quito, Ambat, Cuenca, Loja, Azogues, Atacames, Puerto Ayora and Puerto Baquerizo Moreno. That is, their number has almost tripled.

Of those available today, there are fast charging connectors in Samanes Park and two more at Terpel Station in Guayaquil.

In Quito, there are fast charging points at the Quito Electric Company and in Terpel.

Those with fast charging are 50 kW and 100 kW, which means that the battery can be fully charged between 40 minutes and an hour and a half, depending on the vehicle and the kilowatts of the power plant.

After payment, only those with fast charging are accessed. In the others, which are the majority, charging is free.

Number of electric stations in Ecuador

Source: Association of Automobile Companies of Ecuador (Aeade)

The third technology is known under the acronym HEV (Hybrid Electric Vehicle), the best-selling and most popular in Ecuador, which includes hybrids that move alternately with an electric motor, which does not require switching on and charging, and a fuel engine. .fossil, which consumes less gasoline precisely because of this combination. They run on battery regeneration and fuel as they have an internal combustion engine and a few electric ones.

Conventional plug-in hybrids have the lowest price.

Savings come with every start, even when waiting at traffic lights, because there the electric motor continues driving.