The Risk of EVs in the Auto Service Industry

EVs are likely here to stay. Under former President Biden, the federal government set a goal that 50% of all vehicles sold in the United States will be EVs by 2030. This goal increased investments in infrastructure and funding for charging stations. Many tax credits and incentives were also available from both federal and state governments.

Automakers are following suit as demand for EVs grows. In 2023, EVs' estimated annual electricity consumption in the United States was 7,596 GWh, almost five times the consumption in 2018. A record 1.4 million EVs were sold in the U.S. in 2023, a 40% increase from 2022. Globally, 14 million EVs were sold in 2023. The new administration under President Trump ended the EV mandate with an executive order. However, many U.S. and international automakers have already invested in the production of EVs.  Auto industry analysts believe that this will just mean a slower EV transition.

Benefits of EVs

EVs have many benefits, such as lower emissions than their gas-powered counterparts. Additionally, EVs can be more cost-effective to operate than gas-powered vehicles. For example, a 37-mile daily commute in an EV costs just over 5 cents per mile, while the same commute in a gas-operated car costs over 200% more. An EV charged with electricity generated by methane gas uses about half as much energy as a similar car powered by gasoline.  Also, electric vehicles require less maintenance than traditional vehicles. However, while energy costs are lower, the purchase price of electric vehicles is much higher than that of conventional vehicles. Prices will likely reduce as production increases and battery technology improves. 

While the average lifespan of gas-powered automobiles and trucks in the U.S. is about 12 years or 200,000 miles, the average lifespan of an electric vehicle ranges from 100,000 to 200,000 miles, and batteries may last between 12 and 15 years in moderate climates. The U.S. government has mandated that the manufacturer’s warranty last at least eight years or 100,000 miles. However, battery replacements can range from $13,000 to $26,000 with labor.  

EV Risks for Auto Dealers, Repair & Service Shops

With all the benefits and the rise in EV sales, there are also several risks for auto dealerships, repair, service, and collision repair centers. Servicing and repairing EVs pose unique risks to employees, property, and customers. The risks can be mainly attributed to the high voltage, flammable materials, and unique characteristics of lithium-ion batteries. Based on the experience of fires from EVs and employee injuries, standards have been set by many regulatory and reference standard associations.

EV Regulatory and Reference Standards

While the Occupational Safety and Health Administration (OSHA) does not have standards specific to EVs, there are many standards available to reference concerning employee exposures related to EV service and repair. For example, OSHA Standard 1910.147 Lockout/Tagout identifies that hazardous energy must be controlled regarding employees servicing or maintaining equipment that may have unexpected energizing, startup, or release of stored energy. OSHA has electrical and personal protection standards that apply as well. OSHA 1910.137 addresses electrical personal protective equipment (PPE) design and testing. The American Society for Testing Materials also has an EV maintenance personnel protection standard, and D120 focuses on insulated gloves. 

Additional compliance standards exist in the manufacturing of EV components from Underwriters Laboratories (UL) to ensure components have hazard-based safety engineering for the fuses, charging equipment, batteries, plugs, and wiring. The National Fire Protection Agency (NFPA) has several standards that apply to EV maintenance and storage. The NFPA has published fire safety resources, guides, and standards related to EVs for personal users, firefighters, and commercial building owners. NFPA 885 includes fire detection and suppression requirements, explosion control, and thermal runaway. The fire sprinkler systems required per the NFPA 885 address the greater need for output as well as duration to suppress lithium-ion related fires. NFPA 70E addresses requirements for arc flash/flame-resistant clothing that those completing high voltage electrical work must wear.  Finally, the National Institute for Automotive Service Excellence (ASE) published ASE Electrified Propulsion Vehicles High-Voltage Electrical Safety Standards that identify conditions and requirements that are required and recommended to be met to protect service professionals working on EVs.   

Mitigation Strategies to Reduce Risk

In addition to standards, auto dealerships, service, and collision repair centers need to implement mitigation strategies and controls to reduce risk and potential loss associated with EV service and repair. Ensure technicians are certified and receive regular training on EV battery systems and safety protocols for customer, property, and employee risks. The use of proper tools and equipment, including insulated tools, personal protective equipment, diagnostic software, and lifting devices, will protect employees, provide quality repairs, and reduce damage to property and the risk of fires. Planning for EV-related fires and installing specialized fire systems to handle lithium-ion fires can minimize damage in service areas.

Employee Risks

Employee risks include electrical shock, thermal runaway, chemical exposure, heavy lifting injuries, burns related to fire hazards, and mishandling and accidents due to inadequate training. The high-voltage exposure to repair, replace, or maintain EVs clearly indicates an increased need for employee training and certification and specialized, insulated tools. Personal protective equipment is also needed for EV service technicians. PPE for reducing hazards when working on EVs includes safety glasses, electrically insulated gloves, dielectric footwear, face shields, cotton clothing, and voltage-rated tools. The exact personal protection gear needed for a repair should be spelled out in vehicle service repair manual procedures. Additional PPE may include an insulated apron, coveralls, arm sleeves, an arch flash face shield with neck protection, and insulated mats or blankets. Because of the risk of arc flash and burns associated with electrical exposure, EV technicians should wear approved arc-flash/flame-resistant clothing made of natural fibers such as cotton, but not polyester. This clothing should comply with NFPA 70E.

Electrically insulated gloves must be class 0, 1000 volts AC, and 1,500 DC rated and compliant with IEC 60903 (International Electrotechnical Commission) and ASTM D120 (American Society for Testing and Materials). These gloves must be recertified every six months and tested before each use per OSHA 1910.137. Cotton under and leather over gloves are companions to the insulated gloves for comfort and extension of use. Footwear should be a leather boot, slip resistant, composite toe (impact resistant), electrical shock resistant, and meet the standards in ASTM F2413-11.

“Danger High Voltage” warning signs on orange cones with caution tape must be placed around vehicles when working on EV components. This warns other technicians on the shop floor to keep their distance. As the best practice, the vehicle owner and other non-needed personnel should not be allowed in the shop while EVs are being repaired. A hot stick is also recommended. A hot stick is an insulated safety hook that another area technician can use to separate an employee/victim exposed to electrical components from the energized equipment and protects them from being electrocuted as well. Employees are never to work on EVs alone.

Category 3-rated voltage multimeters are needed for EV and hybrid vehicle work. Lesser-rated voltage multimeters would risk damage to basic voltage meters. Batteries on EVs weigh around 1,000 lbs. on their own, so there is an increased need for lifting capacity with overhead cranes, hoists, and/or other lifts.

Property Exposures

Property exposure risks include fires and explosions because of thermal runaway, battery damage, equipment damage, and environmental contamination.  Batteries in EVs are made up of multiple lithium-ion cells. Thermal run-away happens because of damage to battery cells due to a collision, water damage, or improper maintenance. The battery damage causes heat and flammable gases to be produced, which heats nearby battery cells and releases more heat and gas to adjacent cells. The fire becomes self-sustaining and very hard to extinguish with conventional firefighting methods. The EV batteries can have stranded energy in an unknown state due to collision or natural disaster (such as flood, hurricane, etc.). These fire risks from damaged vehicles can affect service and collision center employees and may cause loss of physical property and the property of other customer-stored vehicles.

The spread of fire or fumes could be reduced by designating specific, well-ventilated areas for EV battery service. Finally, when EVs are not actively being serviced, they should be stored and charged outside of the building with adequate separation from other vehicles and buildings, combustibles like tire piles, wooden pallets, and combustible gas (propane for forklifts).

Environmental Risks

Lithium-ion batteries are currently the most used batteries in EVs. While EVs produce fewer emissions, these batteries have environmental implications. Lithium-ion batteries are difficult to recycle and require a large amount of energy and water to extract. Water used during extinguishing efforts of EV battery fires can create toxic fumes. Improper handling and disposal of batteries can result in toxic chemical leaks and affect the surrounding environment.

Customer Risks

Finally, risks to customers include injury or damage from incorrectly serviced batteries. This can lead to malfunctions, accidents, or breakdowns while the customer is driving. Issues missed or undetected during servicing can result in overheating, fires, or battery failures after they are returned to the customer. Additionally, if batteries are not properly sealed during servicing, leaks or fumes can be emitted.

There is good news: fewer fire-prone batteries are already being manufactured and are beginning to be used in EVs. These battery chemistries are more complex to ignite. In 2025, Tesla introduced the sodium-ion battery. Sodium-ion batteries are in a solid state, with lower extraction costs, natural abundance, and safer handling, storage, and transportation. Lithium-ion batteries were initially manufactured to charge quickly and hold lots of energy, which was an incentive for EV drivers. However, those batteries were more likely to enter thermal runaway (and resulting overheating) at lower temperatures.  Newer manufactured EVs should drop in price, be more efficient, and have less fire risk as technology develops. 

Insurance Implications

Underwriters rely on standards for fire protection and require compliance for many policy coverages. Auto dealers and service providers maintain many coverages to protect their businesses. Garage liability insurance is a standard product that protects dealerships from liabilities resulting from accidents experienced by customers on the premises, vehicles while in dealership/service center custody, and faulty repairs. Property insurance protects the building and business-related contents for dealerships. Environmental/pollution insurance focuses on reducing liability related to operations and handling vehicle fluids and parts. Worker's compensation covers employee injuries or illnesses caused by work activities. 

EVs have implications for each of the reviewed coverages. Because EV values are very high, there are significant impacts on EV garage liability insurance. Also, as EVs tend to cost more than their gas-powered counterpart, which, compounded with the loss of building and contents, can be challenging property insurance underwriting.