Troubles facing ailing Chinese electric vehicle (EV) maker Neta could have a drastic spillover effect on Thai car dealers, possibly forcing them to shut down, while insurance companies may choose to collect premiums directly from policyholders, says Allianz Ayudhya General Insurance (AAGI).
AAGI chief executive Lars Heibutzki said the risk profile for EV insurance is increasing.
Claims for EVs tend to be 50-60% higher than for traditional vehicles, mainly due to expensive battery replacements and specialised repair work.
EVs also involve unique risks such as battery fires and cybersecurity concerns, he told the Bangkok Post.
AAGI is adjusting its underwriting and pricing to manage these risks. At the same time, the company remains committed to supporting EV adoption in Thailand, aligning with the country's sustainability goals, said Mr Heibutzki.
Neta Auto Thailand recently clarified that its parent firm — Hozon Auto — is pushing ahead with reforms, partly by turning the company's debt into shares for creditors as well as raising funds to ease the company’s financial shortcomings.
As Neta dismissed a news report that alleged its parent firm is involved in a bankruptcy case, it said the firm is facing a complaint lodged with the court to inspect its debt repayment capability.
“The rapid rise of EVs has created both opportunities and significant challenges for insurers, leading to higher premiums, stricter underwriting and new regulatory requirements. While some insurers have become more selective or cautious, leading players continue to support the EV transition, expanding and refining their insurance offerings to meet evolving consumer and industry needs,” Mr Heibutzki said.
In his view, the financial instability of certain EV firms like Neta does raise concerns in the insurance market.
“If a manufacturer exits or reduces its presence, it can impact the availability of parts and repair services, which increases the risk and cost of insuring those vehicles.”
For insurers, this could mean higher premiums, more selective underwriting or even limited coverage for certain models, he noted.
“When consumer confidence declines, it can lead to the closure of car dealerships. As a result, insurance companies may choose to collect premiums directly from policyholders, rather than through car dealerships or manufacturers — for example, in cases where the manufacturer offers free insurance as part of the car purchase package,” Mr Heibutzki said.
“We’re monitoring these developments closely. We believe the industry will need to adapt, with more localised parts supply, clearer underwriting standards and potentially new insurance products tailored to the EV market. Our goal is to manage these risks while still supporting Thailand’s ambition to grow as an EV hub.”
Citing data from the Thai General Insurance Association, total motor insurance premiums grew 2.1% in the first three months of 2025 as total car sales dropped by 6.45% year-on-year, due to slow economic growth and the high level of household debt.
EV sales, however, have continued to grow, driven by price competition, launches of new models and more consumers turning to EVs because of environmental preferences and affordable prices.