Whether you're buying your first or fifth EV, chances are you've wondered about long-term maintenance and repair costs.

What components of your EV can you cover with an extended warranty, and is it worth it? How do you decide if an extended warranty makes sense for you?

How Protection Products Differ Between EVs and ICEs

When you purchase a vehicle from a dealership, the penultimate step (before driving away) involves sitting down with the Finance & Insurance (F&I) Manager. This person will complete your registration paperwork and offer you a variety of after-sale products.

Examples include extended warranties, tire and wheel protection, gap insurance, lease-wear coverage, key fob replacement, and prepaid maintenance plans—to name a few.

Most of these after-sale protection products, such as gap insurance or interior lease wear coverage, are powertrain-independent; they're the same whether your vehicle is an EV or ICE.

The biggest difference between EVs and ICEs is the extended warranty, what components it covers, and for how long.

If your EV is no longer covered under the manufacturer's warranty, or it will soon expire, consider an extended warranty to cover the pricey EV-specific parts such as the battery, high voltage components, cables, and connectors.

Manufacturer Warranty vs. Extended Warranty vs. Prepaid Maintenance: What's the Difference?

New vehicles carry a warranty from the manufacturer. It lasts for a certain period of time and is often capped by a mileage limit. For example, a powertrain warranty for 10 years or 100,000 miles, whichever comes first, would expire in year 4 if you drove 25K miles per year.

Manufacturer warranties typically exclude wear-and-tear items such as wiper blades and brake pads.

Extended warranties (sometimes referred to as vehicle service contracts) often go into effect when the manufacturer's warranty expires and provide coverage for an additional period of time/miles. Extended warranty costs differ by the vehicle (an Audi is more expensive than a Honda) and your level of coverage.

While warranties cover items that break or malfunction, prepaid maintenance plans cover services such as tire rotations and oil changes for a period of time.

checkin oil level in a vehicle

The incentive to purchase a maintenance plan is that it offers upfront savings, though it usually means agreeing to service the vehicle at the dealership. However, dealerships require more rigorous training for their technicians, and labor rates are accordingly higher.

EV Extended Warranties

Now that you know the lingo, the first step in evaluating an extended warranty is to find out how long your EV's components are covered under the manufacturer's warranty.

This will differ not only if you're buying new or used but also by model and even drivetrain configuration. For example, Tesla's website shows the Model 3 Rear-Wheel Drive and Model 3 Long Range have different warranties on the battery.

Once you know what's covered by the manufacturer, assess how long you plan to keep the vehicle. While no one has a crystal ball, if your EV will be covered under the manufacturer's warranty for as long as you will own it, the extended warranty is superfluous. One exception might be if the warranty was transferable and you intended to give it to a family member in the future.

But overall, as long as you set aside funds for maintenance and wear-and-tear items, you won't have any unexpected blows to your budget if your EV is under the manufacturer's warranty.

However, if you're planning to keep your EV beyond the covered warranty period, here's what to consider:

1. EV Battery Pack Warranty

Federal (meaning all US states) require an EV's battery pack to be covered for at least eight years or 100,000 miles, whichever comes first. This warranty applies in many countries. However, automakers offer varying levels of retention coverage on batteries.

Chevrolet offers 60% battery retention on its warranty for eight years/100K. Tesla's Model S and Y are covered for eight years/150,000 miles (whichever comes first) with 70% battery capacity retention. Range loss is practically guaranteed with age, so this is to be expected, but if premature battery death is a concern for you, know that you have eight years/100K of coverage.

Beyond that, a warranty isn't a bad idea because the average replacement cost for an EV battery is around $5,500, though Tesla batteries cost a lot more.

2. What "Type" of EV Buyer Are You?

Because extended warranties are a form of voluntary insurance, the words Socrates still ring true: "Know thyself."

If you're not the kind of person who tends to set aside money for unexpected life events, then an extended warranty can save you significant stress. And if you're on a tight budget, an extended warranty can act as a buffer against all the world throws at your EV. Remember, if you drive 40K miles per year, you'll burn through the "whichever comes first" clause of any federal or manufacturer warranty.

3. Cost/Coverage

Generally, the more expensive the car is to purchase, the more expensive the warranty is. Actuaries price extended warranties based on claim histories. Seeing as EVs are new, there isn't a ton of data for them to draw upon. However, a warranty on one of the four most affordable EVs, the Nissan Leaf, costs around $2,500. Xcelerate, a company started by former Tesla employees, offers online pricing.

EV Extended Warranty Quote on 2022 Nissan Leaf
Image Credit: Xcelerate

It's critical to find out exactly what is covered under various extended warranty plans and make sure you understand what services you have to perform. Some EV extended warranties include roadside assistance. But exercise caution. Just like you can't tow an all-wheel drive vehicle by lifting only two wheels off the ground, EVs also have special roadside assistance needs.

4. Potential Repair Costs

It's worth researching an absolute disaster: a situation in which you have to replace all the specialized EV components in your vehicles. Though it's highly unlikely everything will break, it's good beforehand to know how much each part costs.

Just about everything is more expensive to repair on an EV because they have specifically designed control modules, air conditioning, steering, and sensors. Not only are parts more expensive, but many models will require dealer service.

A minimalist Tesla Service Department with two service advisors
Image Credit: Tesla 

​​​​​​Even independent repair shops charge high labor rates for EV repairs as there is currently a lack of qualified technicians.

5. Issuer

A warranty is only as good as the company that stands behind it. If the extended warranty is not issued by the manufacturer or an affiliate they own, you'll want to research how long the underwriter has been in business, their net worth, and their history of paying claims.

6. The Fine Print

If you modify your EV, you may void your extended warranty. If you improperly charge your EV, you may void your extended warranty. If you fail to keep service records, you may void your extended warranty. If you... you get the picture.

You'll need to put on your lawyer hat and read the fine print. Always think and act like you're going to court and hope that you never have to.

Is an EV Warranty Worth the Money?

EV warranties are new terrain for insurers and consumers alike.

Though EV components are expensive and labor rates are high, the decision to buy an extended warranty depends on the vehicle itself, how long you intend to keep it, how many miles per year you drive, and your tolerance for financial risk.