(Yicai) April 8 -- The insurance premium for Xiaomi Automobile’s first electric vehicle model is similar to that for fuel-powered cars about 66 percent more expensive.

Xiaomi Auto’s SU7 Max is priced at CNY299,900 (USD41,300) and can be insured for up to CNY9,500 (USD1,315), which is a very similar price to insurances for fuel vehicles priced at about CNY500,000, according to insurance policies posted on social media by car buyers. The insurance premium for the SU7 standard version, which is priced at CNY215,900, is around CNY6,000.

The insurance for an SU7 is between CNY6,000 and CNY8,000 for the first years, according to a salesperson at Xiaomi Auto.

Insurance premiums for new energy vehicles are generally 20 percent to 80 percent higher than that for fuel vehicles with the same price, according to an industry insider.

The reason insurance premiums are so similar for cars at different prices is that insurances for NEVs are calculated differently, Xiaomi Auto said. Insurances for NEVs have special provisions on core parts such as batteries, motors, and electric control systems and cover scenarios including running, parking, and charging, the firm noted, adding that they are also calculated based on the brand, model, and registered purposes of the NEV.

Xiaomi Auto partnered with China’s four largest insurers -- Ping An Property and Casualty Insurance, Sunshine Property and Casualty Insurance, People’s Insurance Company (Group) of China, and China Pacific Property Insurance -- to provide buyers with appropriate insurance products, the Beijing-based company pointed out. Buyers can ask their vehicle delivery specialists for insurance information and suggestions when they receive their cars.

PICC’s insurance expense ratio for NEVs is 7 percentage points higher than the average for cars and 10 percentage points higher than the average for fuel vehicles, President Yu Ze said during the company’s 2023 earnings conference call.

Studies will be carried out to lower the premium rate for NEVs, thus solving NEV buyers’ worries about high insurance expenses, Sheng Qiuping, China’s vice minister of commerce, said at an industry forum last month.

Editor: Futura Costaglione