Dynamic battery warranty for electric vehicles: Increase customer confidence and extend vehicle utility

Electric Vehicle (EV) battery warranties are given to provide confidence to buyers and encourage EV sales. However, these warranties are often very simplistic and do not consider vehicle usage or driving behavior differences. As a result, some customers are overpaying while others are underpaying for the coverage that they receive. This study critically examines current EV battery warranties using a lithium-ion battery degradation model alongside EV energy consumption to evaluate warranty effectiveness under various usage conditions. Simulating 48 distinct scenarios reveals diverse degradation patterns, suggesting that warranties could be improved by differentiating based on these conditions. It also highlights limitations, such as the absence of coverage for vehicle-to-grid (V2G) technology. To address these issues, a dynamic battery warranty is proposed, designed to align driver incentives with battery lifetime considerations without increasing risks for EV manufacturers.