Hyundai Dealership Scams Ioniq 5 Owner and Their Insurance Company for Battery Replacement

Repairing electric vehicles could be expensive, especially when the damage affects the battery pack. This happens because repair shops don't want to assume the risk if something goes wrong with the battery after a repair. Instead, they just recommend replacing the battery pack even for minor damage. And because the battery packs are expensive, more often than not, an electric car gets written off and scrapped even if it's brand new.

This is a fact, and it's been known for some time. However, legacy carmakers' dealers make it worse by trying to squeeze maximum profit out of this situation. This has become clear to Kyle Hsu, the Canadian owner of a Hyundai Ioniq 5. Kyle recalls that he noticed his 2022 Ioniq 5 was not functioning very well while on vacation, so he decided to take it to a dealership in Richmond. The car was also part of a recall, so he asked the staff to take care of it.

As the mechanics began working on it, they found a scratch on the panel that was supposed to protect the battery pack precisely from this kind of damage. Hsu had no recollection of how the scratch might have happened. Since the mechanics insisted that the battery pack was affected, the eight-year warranty of the battery pack was deemed void, and he was told he needed to pay $30,000 (CAD) for a replacement. Although this sounds like a lot, it's not much different from other electric vehicles' battery pack replacements.

Because the price was too high, Hsu decided to solve this through his insurance company, ICBC. However, when the insurer contacted the dealership, the battery pack replacement price doubled to more than $61,000 CAD ($45,500 USD). That's $10,000 more than the price of the Ioniq 5 when it was new. It also meant that Hsu's low-mileage 2022 Hyundai Ioniq 5 was now a write-off, heading to the scrapyard. Hsu would also face a 50% insurance premium because he lost his clean driving record with this write-off.

It's intriguing why the price of a battery replacement varies depending on who's asking, and a Hyundai representative could not explain it either. Speaking to Motormouth, Jennifer McCarthy with Hyundai Canada said the company is looking into this. Asked about the replacement quote, she admitted that such high repair costs are rare, but each case is unique. McCarthy also said that Hyundai Canada should've had the opportunity to assess the situation prior to the suggested replacement cost being shared with ICBC.

My guess is that the dealer wanted to make a quick buck, and insurance companies are the ideal target because they pay no questions asked. But that is also the reason why everyone pays high insurance premiums, and EV owners are the most affected. On the other hand, it makes you think twice, knowing that your EV's battery might not be covered under warranty, even when the car is brand new. And when things go sideways, only good insurance can save the day. Although that is also expensive, it's nowhere near as expensive as buying a new car.