Allianz UK has warned motor traders to be aware of the risks associated with electric vehicle battery fires, which have caused extensive damage in recent cases.

Lithium-ion batteries used in EV have been identified as a potential risk due to their thermal instability. When damaged, mishandled, stored or transported incorrectly, these batteries can experience ‘thermal runaway’, a rapid self-heating fire that can lead to explosions which can happen days or even weeks later.

While research, including findings from Thatcham Research, indicates that EVs are generally less likely to catch fire compared to traditional combustion engines, the intensity and severity of these fires can be significantly greater. Olivia Baker, head of motor trade, Allianz UK, 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.

“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.”

Two recent motor trade premise fires resulted in over £5m and £1.5m worth of claims. Both were the result of a faulty EV battery that had been removed and was stored at the garage awaiting collection from the manufacturer for investigation.

To mitigate the risks, Allianz recommends implementing rigorous inspection protocols for damaged batteries, ensuring proper storage and charging practices, and collaborating with insurers and brokers to prevent incidents.