Up to 8.33% discount, small and quick adjustments to new energy vehicle insurance premiums

As the penetration rate of new energy vehicles continues to rise, the new energy vehicle insurance, as an important supporting service, is undergoing a profound transformation in its pricing mechanism. On March 23, a reporter from Beijing Business Daily learned that the self-pricing coefficient for new energy vehicle insurance has recently undergone a new round of optimization, expanding from [0.6, 1.4] to [0.55, 1.45]. This marks the second expansion since September 2025. At the same time, the industry is continuously exploring reforms in new energy vehicle insurance, from optimizing pricing coefficients to make premiums more closely aligned with risks, to exploring the “separation of vehicle and battery” model to clarify the risk boundaries of battery assets, and promoting car manufacturers to leverage data and technological advantages throughout the industrial chain. This innovation covers the entire chain from controlling repair costs, precise insurance pricing, improving industry regulation, to future development layouts, fundamentally reshaping the ecology of new energy vehicle insurance and promoting a new win-win situation for vehicle owners and insurance companies.

Expansion of Pricing Range

A reporter from Beijing Business Daily learned from the industry that the self-pricing coefficient range for new energy vehicle insurance has recently completed a new round of adjustments, expanding from [0.6, 1.4] to [0.55, 1.45], and has now been implemented nationwide.

The so-called self-pricing coefficient for vehicle insurance is a range factor that insurance companies adjust based on the benchmark premium, taking into account factors such as vehicle model risk, usage nature, and owner driving behavior. The floating range of the coefficient directly determines the pricing boundary for insurance companies, and obtaining greater self-pricing authority means that insurance companies have more flexibility in adjusting premiums, allowing them to differentiate pricing based on the actual risk levels of vehicles. This helps insurance companies match risks more accurately and improve underwriting efficiency, while also allowing high-quality vehicle owners to enjoy more favorable premiums.

For ordinary consumers, the most concerning issue is whether their future vehicle insurance premiums will rise or fall, and how much adjustment space there is. Based on the commercial vehicle insurance premium calculation formula: commercial vehicle insurance premium = benchmark premium × no-claims discount coefficient (NCD coefficient) × self-pricing coefficient, theoretically, after the adjustment, the vehicle insurance premium can be reduced by up to 8.33%, that is, (0.55-0.6)/0.6=-8.33%. The potential for price increases follows the same logic, (1.45-1.4)/1.4=3.57%.

However, it should be noted that this is only the theoretical floating range, and actual premium changes will also be constrained by other factors. Jiang Han, a senior researcher at Pangu Think Tank, stated that the reduction in the self-pricing coefficient means that the theoretical maximum discount for high-quality low-risk vehicle owners will be larger. The theoretical maximum reduction does not equal the actual full reduction received because premiums are also constrained by multiple factors such as traffic violation records and the vehicle’s zero-to-whole ratio. The coefficient adjustment merely opens up the “ceiling” and “floor” for pricing.

Which new energy vehicle owners’ insurance can reach the new price “floor”? Sun Yuhao, a senior partner and lawyer at Shanghai Haihua Yongtai Law Firm, stated that typically, home-based new energy vehicle owners with good driving habits, zero accident records, and low vehicle zero-to-whole ratios will be the first to enjoy price reductions, as insurance companies are motivated to compete for this quality business through lower prices. Conversely, operational vehicles such as ride-hailing cars with high mileage and accident rates, as well as high-end models with exorbitant maintenance costs or specific models with excessively high zero-to-whole ratios, may face potential premium increases due to their high-risk characteristics.

Progressive Reform

In fact, this is already the second adjustment of the self-pricing coefficient for new energy vehicle insurance. In September 2025, the self-pricing coefficient for new energy vehicle insurance was first adjusted, expanding from [0.65, 1.35] to [0.6, 1.4].

Compared to the floating range of the self-pricing coefficient for traditional fuel vehicle commercial insurance in 2023, which directly expanded from [0.65, 1.35] to [0.5, 1.5], the adjustments for the new energy vehicle insurance self-pricing coefficient occur more frequently, with each adjustment being smaller and not happening all at once. Sun Yuhao pointed out that this “small steps, quick pace” approach aims to prevent a vicious price war or dramatic fluctuations in premiums due to the sudden release of the pricing range. It gives insurance companies sufficient time to upgrade their actuarial models and accumulate multidimensional data on driving behavior and vehicle wear and tear, thus achieving a more stable precise matching of risk and price.

This “small step” adjustment approach also aligns with regulatory guidance. Early last year, four departments, including the Financial Regulatory Administration, issued the “Guidance on Deepening Reform, Strengthening Regulation, and Promoting High-Quality Development of New Energy Vehicle Insurance” (hereinafter referred to as the “Guidance”), which mentioned the need to steadily optimize the floating range of the self-pricing coefficient, reasonably optimizing the floating range of new energy commercial vehicle insurance self-pricing coefficients, effectively leveraging market mechanisms, promoting better alignment of new energy vehicle insurance prices with risks, and improving the scientific nature of pricing by market operators.

Industry insiders believe that the continuous expansion of self-pricing authority will drive insurance companies to further combine their own risk control capabilities, business structures, comprehensive cost ratios, and other core factors to dynamically adjust the average premium for new energy commercial insurance, which is expected to further optimize their underwriting profit margins. However, this also places higher demands on insurance companies’ pricing capabilities and risk control levels, forcing insurers to achieve more precise pricing and more efficient risk management.

Sun Yuhao stated that insurance companies must abandon rough pricing models and shift to refined management. Insurers need to be able to use big data, artificial intelligence, and other technologies to accurately identify risk differences among different vehicle models, usage types, and even different driving behaviors, and establish a rate system that matches these differences. Otherwise, they will face dual operational risks of customer loss due to excessively high pricing or underwriting losses due to excessively low pricing.

Exploring “Separation of Vehicle and Battery”

Facing the long-standing dual dilemma of “vehicle owners complaining about high prices, insurers claiming losses” in new energy vehicle insurance, the industry has not stopped at rate adjustments but has turned its attention to deeper structural changes.

Entering 2026, the industry’s exploration of the “separation of vehicle and battery” model for commercial vehicle insurance is accelerating. The so-called “separation of vehicle and battery” means that the vehicle and power battery are sold, managed, and insured as independent entities.

Signals for exploration have already been released in relevant policies. The “Guidance” proposed researching and exploring commercial vehicle insurance products based on the “separation of vehicle and battery” model to provide scientifically reasonable insurance protection for related new energy vehicles. In February of this year, an action plan jointly issued by the Shenzhen Municipal Financial Management Bureau and four other departments titled “Action Plan for the Insurance Industry to Support Technological Innovation and Industrial Development (2026-2028)” also pointed out the need to explore commercial vehicle insurance products based on the “separation of vehicle and battery” model in specific scenarios such as urban traffic.

Currently, some regions have already initiated pilot projects for “separation of vehicle and battery” insurance and have seen initial success. A reporter from Beijing Business Daily learned that Chongqing Qiantou Logistics implemented a replacement of the first batch of 10 new energy trucks, which reduced initial investment costs by 30% to 50% compared to traditional procurement methods, and insurance premiums were also reduced by about 30%.

Why can “separation of vehicle and battery” effectively lower premiums and optimize risks? In Jiang Han’s view, under the traditional model, the battery, as one of the most expensive components of the vehicle, directly pushes up the overall vehicle insurance amount and premium due to its high risk. After separation, the vehicle insurance only covers the part excluding the battery, significantly lowering the insured amount, which directly drives down premiums, with pilot data showing a reduction of over 30%. Additionally, this model indeed helps reduce the comprehensive risk exposure of the vehicle itself. The battery is uniformly managed and maintained by professional operators, whose expertise far exceeds that of individual vehicle owners, effectively reducing the risk of battery failures and self-ignition caused by improper charging and discharging, thereby lowering the accident rate from the source.

Sunshine Property & Casualty Insurance’s Shenzhen branch has also publicly emphasized that the “separation of vehicle and battery” model is seen by the industry as a key innovative path to systematically solve the core contradiction of “vehicle owners’ anxiety over value preservation and complex loss assessment for insurance companies,” aiming to clarify risk subjects and achieve precise matching of assets and risks, thus providing more scientifically-based insurance solutions for the market.

Beijing Business Daily Reporter: Li Xiumei

(Editor: Qian Xiaorui)

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