The future is here as motor vehicles are fast replacing petrol and diesel engines with electric power plants. A few decades ago, electric Vehicles or EVs had limited use as golf carts, milk delivery vehicles and so forth with very short ranges on battery life before next recharge. Now it is a totally new picture with EVs now found in luxury sedans, pick -up truck, super cars and SUVs. More sore, the cruise range has jumped from a few kilometres to above 5ookm with single battery charge whilst speeds have matched their petrol and diesel engine rivals.
Vehicles powered by electricity are not an entirely new phenomena. In the past decades spanning from the 1950s,
automakers have on several occasions produced electric vehicles though mostly limited to concept models. This could have
been a result fo absence of efficient battery and electric motor systems suitable for mass production. This however has taken a sudden turn in the past 2 decades with EVs proving to be the new normal a few years from now.
Much credit though has to be given to tech start-ups that includes Tesla, Rivian, Nio, Nikola, WM Motor , Lucid , Xiaopeng Motor Chargepoint amongst others that have championed commercial production of EVs. Of interest is the “unholy alliance” of these start-ups with companies like Amazon, Walmart, Microsoft, Apple to mention a few. These companies have partnered with
startups in developing electric motor vehicles which are also autonomous or self driving. This has also awakened traditional
automakers like VW , Ford and Toyota to start looking at adding EVs on most of their platforms. For instance, Volvo announced its discontinuance of combustion engine for all its platforms by 2030. This also could have been a direct response to countries
advancing their environmental agenda by banning all full fossil fuel engines around same time with Norway in 2025, UK in 2030 and California by 2035.
What becomes interesting is how these monumental changes are going to impact on motor insurance products, prices and value chains. With motor insurance contributing an average of between 40% and 50% in premiums, there is need to start conceptualising how the future of insurance products are going to look like. Inclusion of Artificial Intelligence (Al) in motor vehicles has advanced safety of automobiles in general. Such softwares are helping reduce road accidents by assisting drivers manoeuvre the traffic jungle . They are also advancing autonomous driving which is still under study regarding safety. Al also makes it easy to implement use-based motor insurance products through telematics. The telematics system is a vehicle tracking device installed in the car and sends information including vehicle location, fuel consumption, speeding, braking, usage and so forth. When incorporated in an insurance product, it can help better price specific customers based on user pattens.
Not only do we need to start thinking about insurance products, but also related infrastructure like charging systems, garage diagnostic equipments, road configurations and so forth. Furthermore, how do we harness the resource advantage given that key minerals used in production of critical components are abundantly available locally. Minerals like lithium, platinum, palladium, gold, copper, aluminium and other platinum group of minerals (PGM) are used for batteries, vehicle parts, conductors, processing chips and so forth. With the accelerated changes in the motor industry towards EVs, it seems the fantasies of 1970s and 1980s sci-fi movie are finally here as vehicles will drive themselves.(Wisebee)