More Than A Fleeting Look at Electric Vehicles

So, the writing has been on the wall for some time, for our petrol and diesel gas guzzling cars to be heading for the scrap heap to be replaced with something altogether greener and environmentally friendly. And for those that have already made the switch, for personal or fleet, the recent scenes of long queues at the petrol stations across the country must offer up feelings of relief for some and satisfaction perhaps for others? (and who could blame them?).

We already know that the sale of new petrol and diesel cars will be banned from 2030, and some hybrid cars that don’t make the grade will be added to the list five years later. In this green era, where the UK’s ambition is to become Net Zero on greenhouse gas emissions by 2050, petrol and diesel have become dirty words, because vehicles using these fossil fuels account for a staggering 27% of all carbon emissions.

Government is therefore driving forward (!) legislation to ban such vehicles from motoring onto the market, and instead, is encouraging more of us to make the switch to Electric Vehicles (EVs).

But what does this mean for commercial fleet management? What role does insurance play in this transition?

Mike Dickinson, Sales & Marketing Director at Russell Scanlan, drives us through the key considerations.

“The climate emergency is at the forefront of everyone’s minds at present, and will continue to feature high on the news agenda as Britain gears up to host COP26, the United Nations (UN) Climate Change Conference, this November.

“However, petrol and diesel cars accounted for 73% of new car sales in 2020, so it seems there still is a very long way to go on this journey. That said, EVs are becoming increasingly visible on our roads, with the green number plate strip being a clear indicator of the driver’s and their company’s intention to do their bit for the environment.

“Businesses too are stepping up a gear, they have to. Plans to switch to a full EV fleet need to be considered as soon as possible and for those that are already getting down to the detail we are finding that clients are approaching us now with questions about changes to insurance needs for individual company cars and wider fleets. Here’s a few points to bear in mind …

• “EVs are generally more expensive to purchase and are potentially easier to damage than fossil fuel vehicles. Some insurers are offering green discounts to counterbalance this.
• “EVs tend to cost more to fix because the technology is newer and fewer garages and their mechanics have got up to speed. Most insurers use vetted garages to do any repairs, and in time, prices will come down.
• “EVs are likely to be cheaper to service and maintain long-term. They have fewer moving parts that fail due to wear and tear, unlike Internal Combustion Engines (ICE).
• “Although car batteries will degrade, giving some drivers range anxiety, significant investment in Research and Development (R&D) will expedite technological improvements.
• “EVs are exempt from road-tax, which offsets the fact that it might cost a bit more to insure an EV.
• “Electricity is cheaper than fossil fuel, although the balance may be shifting given the recent energy crisis and shortage of lorry drivers causing people to panic buy fuel.

“The insurers we deal with are all committed to promoting sustainable practice, which is why they continue to review their fleet insurance products to account for additional risks and exposures that EVs have. Many products now offer cover which:

• includes charging equipment,
• protects third parties from incidents like tripping over charging cables,
• and protects batteries from issues like an electricity surge.

“The situation is evolving, and the insurance market continues to be responsive to business and consumer needs. There can be no doubt that EVs are here to stay and form an exciting part of the future of modern Britain.”

Russell Scanlan is keen to support its clients in meeting their sustainability objectives, so if you have any queries about future plans for your fleet, EVs, please get in touch.