BYD and 17 Other Automakers "Hunt" Auto Insurance, Competing with Traditional Insurers for Claims Adjustment Rights, Will Accident Vehicle Chaos Be Ended by New Technologies?

In recent years, the repair of accident vehicles has become a focal point of social concern. Repair shops and insurance companies, like red and blue corner boxers in a ring, fiercely contend for their respective interests in accident repairs.

However, the scepter that ultimately decides the winner of this game is secretly held by the car manufacturer, and now, the car manufacturer even plans to move the boxing ring back home.

01. New energy vehicles break the insurance company's discourse power, and claims pricing needs to be redesigned.

The confidence of the automakers in their assertive actions stems from three evolving trends in the automotive market: new energy vehicles have definitively become mainstream, automakers are directly establishing P&C insurance companies to operate auto insurance business, and the advanced autonomous driving transportation ecosystem, represented by the application of L3 technology, is fully launching and landing. These three trends are gradually solidifying this confidence into a strong foundation.

In terms of sales volume, passenger cars represent the primary battlefield of the automotive market. According to authoritative data released by the Ministry of Public Security, as of the end of September 2025, the total number of registered vehicles in China reached approximately 360 million, with passenger cars accounting for about 89%.

The main battleground for passenger cars is new energy vehicles. The number of new energy vehicles in China has reached 36.89 million, accounting for 10.27% of the total vehicle ownership. In the new car sales market, the cumulative penetration rate of new energy vehicles reached 53.6% from January to November 2025, and directly surged to 59.3% in November alone. It is highly likely that the cumulative penetration rate for the entire year will exceed 50%. 2025 is destined to be the inaugural year for new energy vehicles to become the mainstream in the automotive market.

With the increasing reliability of vehicles, improved road conditions, and stricter traffic enforcement, the value center of the automotive aftermarket is increasingly shifting towards accident vehicle repair. Meanwhile, with the widespread electrification of new models, OEMs have moved from behind-the-scenes interest games to the forefront.

Insurance companies are consistently challenged by their inability to control the repair techniques and parts supply for all insured vehicle models in accident repairs, which essentially means they do not have the top-level design authority for accident vehicle repair pricing.

In the field of fuel vehicle maintenance, with the continuous increase in the localization rate of joint-venture cars and the market share of independent brands, in terms of parts supply, dismantled parts and counterfeit parts have begun to flood the market. In the later stage, the widespread supply of remanufactured parts and branded parts (including some OEM parts) has made these non-original parts increasingly competitive in terms of cost-effectiveness.

As for maintenance techniques, with the exception of a few items that require specialized computer matching, such as replacing control computers, instrument clusters, and audio-visual systems—purely electronic components—the unique disassembly and assembly processes and specialized tools have dispersed into the general public due to the outflow of maintenance technicians.

Through price and claim assessments, insurance companies can easily identify and lock in lower labor and parts quotes, thereby breaking the exclusivity of the original manufacturer's authorized repair system. Coupled with the inventory-stocking-led marketing strategy of car manufacturers, this inevitably leads to the establishment of more authorized 4S dealerships.

This led to a rapid overcapacity in authorized repair centers, indirectly fueling the prevalence of "resource-for-resource" kickbacks among insurance companies. This, in turn, further exacerbated the supply of non-original parts and the erosion of professional repair expertise.

However, the electrification of automobiles greatly facilitates OEMs in regaining dominance over maintenance technology and parts supply. It also provides a strong material foundation for the implementation of the Internet of Vehicles. Consequently, it fundamentally opens up a direct channel between OEMs, users, and vehicles, completely changing the awkward situation where vehicles don't return to 4S stores and OEMs lose contact with sold vehicles. This move brings maintenance opportunities into the OEMs' perception range.

This is why insurance companies continue to suffer losses in the new energy vehicle sector: they have lost the channels to shop around and drive down payout costs, thereby almost entirely losing the dominant position they once held in the field of internal combustion engine vehicle repairs.

Apart from signing head-to-head strategic cooperation agreements with OEMs, the only remaining option is to hike insurance premiums aggressively.

02. Captive auto insurance is gaining momentum, as OEMs seek to break free from insurance companies.

Seeing insurance companies struggle in the NEV insurance sector, OEMs are no longer content with being the hidden hand behind the scenes. They have finally stepped into the boxing ring themselves, determined to bring the last major profitable link of the automotive industry chain that remains outside their control under their wing.

Automakers directly establishing property and casualty insurance companies (hereinafter referred to as "OEM auto insurance") to operate auto insurance business possess advantages that traditional auto insurers cannot match.

Regarding revenue, no matter how traditional car insurance designs and adjusts premium standards, host car insurance can simply copy them, even without changing a single punctuation mark in the policy terms. Isn't that infuriating?

In terms of expenses, the main vehicle insurance almost completely dominates, no, monopolizes repair technology and parts supply! Even between different brands, at least most of the technology and OEM suppliers are interconnected.

In this regard, we are far from reaching the level where internal combustion engine vehicle repair technology and parts are ubiquitous. Monopolies will inevitably lead to exorbitant profits, as evidenced by the generally high zero-to-component ratio of new energy vehicles.

Furthermore, the organizational structure of OEM-led auto insurance is significantly flatter than that of traditional insurance. For front-line business development, it merely represents an additional task integrated into vehicle sales or maintenance reception, rather than a primary livelihood as it is for traditional insurance personnel. Consequently, there is a world of difference between the two in terms of labor, overhead, and business acquisition costs.

What can traditional auto insurance compete with OEM auto insurance with? Probably only the shrinking base of gasoline cars left.

Currently, which automobile manufacturers have established insurance companies?

As of December 2025, automotive OEMs that have invested in or even hold insurance licenses for property and casualty insurance companies primarily include:

BYD: Having obtained approval to operate auto insurance business through the full acquisition of Yi'an P&C Insurance and renaming it Shenzhen BYD Property Insurance Co., Ltd.

Xiaomi Group, along with shareholders including BNP Paribas Cardif and Volkswagen, has established BNP Paribas Cardif Tianxing Property Insurance Co., Ltd. in Beijing, scheduled to officially open in October 2025.

GAC Group: Its subsidiary, Zhongcheng Insurance, is one of the earliest professional automotive insurance companies established by an OEM in China.

FAW Group: Participates in the auto insurance market through Xinan Automobile Insurance.

Geely Holding Group: Indirectly establishing its presence through the acquisition of a stake in United Property & Casualty Insurance.

A large number of OEMs have established insurance brokerage companies. AC Auto's inventory shows that 17 OEMs have entered the auto insurance field through insurance brokerage companies. Common examples include: Toyota Insurance Brokerage, NIO Insurance Brokerage Co., Ltd., Beijing Li Auto Insurance Brokerage Co., Ltd., and Tesla Insurance Brokerage (China) Co., Ltd.

03. With autonomous driving significantly reducing accident rates, the ecological niche of insurance companies will be weakened.

If electrification represents enhanced behind-the-scenes manipulation, then comprehensive auto insurance extends competitive advantage to the point of near cheating, while advanced intelligent driving might just move the boxing ring of accident repair to the doorstep of the OEM.

One of the key battlegrounds for new energy vehicles is the continuously advancing field of intelligent driving, and one of the main reasons for pursuing autonomous driving or high-level intelligent driving is to reduce and even eliminate traffic accidents.

The two main causes of traffic accidents are:

Human factors: Driver behavior is the primary cause of accidents, specifically including:

Dangerous driving behaviors: such as speeding, drunk driving, fatigued driving, and distracted driving (e.g., using a mobile phone), which directly reduce reaction ability.

Unhealthy psychological states, such as aggressive driving, road rage, and a reliance on luck, can easily lead to errors in judgment.

Improper operation: such as not maintaining a safe distance, illegal lane changes, not checking blind spots, etc.

Poor Vehicle Condition: Technical defects or inadequate maintenance of vehicles significantly increase risk, such as brake failure, lighting malfunctions, and other critical component failures. This includes operating vehicles with existing problems, illegal modifications, or overloading.

According to the national recommended standard "Levels of Driving Automation for Motor Vehicles" approved and issued by the State Administration for Market Regulation and the Standardization Administration of China:

Level 3 autonomous driving can truly achieve autonomous driving under specific conditions, supporting vehicles to autonomously complete lane changes, turns, and other operations. Drivers can completely remove their hands from the steering wheel and only take over when the system requests it. This technological breakthrough not only allows drivers to freely handle work while driving, but also completely frees their attention, transforming the car from a simple means of transportation into a mobile living space and intelligent terminal.

On December 23, 2025, the first batch of 3 BAIC ARCFOX intelligent connected vehicles, approved by the Ministry of Industry and Information Technology and licensed by the Beijing Municipal Public Security Bureau Traffic Management Bureau for Beijing Chuxing Automobile Service Co., Ltd., conducted the first test of L3 autonomous driving on roads under permitted conditions, streamed live across the internet.

On December 26, 2025, Deepal’s first batch of 46 L3-level autonomous vehicles was officially registered and hit the road, just 11 days after the Ministry of Industry and Information Technology approved the market entry for the relevant models.

On December 27, 2025, Wuhan officially received approval to build a national intelligent connected vehicle pilot zone, becoming the first city in China to achieve "vehicle-road-cloud integration" in an open urban environment, creating favorable conditions for the implementation of L3 autonomous driving technology.

Even if we set aside the complete elimination of vehicle accidents, and even if vehicle accidents become an extremely low probability event, perhaps even categorized as product quality liability, where will traditional car insurance companies find their footing?

Written at the end

We have discussed at length the tangled web of vested interests among car owners, repair shops, and insurance companies in accident repairs.

Despite repeated rounds of industry self-regulation by insurance companies, repair shops banding together under industry associations, and an increasing number of car owners resorting to legal action to address grievances in accident repairs, the chaos in accident repair remains tangled and difficult to resolve.

Perhaps the ultimate solution is ADAS greater than or equal to L3? Let's wait and see.