Is 2022 the year to switch to an electric car?

With the sales of electric cars surging in 2021, and the momentum of COP 26 pushing environmental causes to the forefront of our minds, is it time to consider switching our mode of transport away from traditional fossil-fuel run cars?

The first half of 2021 saw a 160%¹ sales increase of electric vehicles (EV) across the top three automotive markets of China, the US and Europe. Over 2.6 million EV’s were sold which equates to 26% of new sales across the global automotive market. Electric vehicle total sales may still be modest in comparison to petrol and diesel cars around the world but sales have been climbing in recent years and grew substantially following the pandemic outbreak² with global sales of EV’s expected to surpass 5 million³ by the end of 2021.

What’s happening in the UK?

As of the 6^th December 2021, the UK government signed and uploaded the ‘COP26 declaration on accelerating the transition to 100% zero emission cars and vans’ policy paper to their website⁴. This declares how the UK, along with a host of other countries, all commit ‘to rapidly accelerating the transition to zero emission vehicles to achieve the goals of the Paris Agreement. Together, we will work towards all sales of new cars and vans being zero emission globally by 2040, and by no later than 2035 in leading markets.’

In addition to the above, the UK will become the first country in the world to commit to phasing out new, non-zero emission heavy goods vehicles weighing 26 tonnes and under by 2035, with all new HGVs sold in the UK to be zero emission by 2040.⁵

What does Amazon have to do with the electric vehicle market?

The American electric vehicle company Rivian which recently overtook Volkswagen in market value⁶ has recently been offered incentives by the UK government to build a production facility in the heart of the West Country in Somerset. Amazon is involved in these expansion plan talks, because Rivian has partnered with the brand to produce 100,000 electric delivery vans by 2030⁷.

In addition to this growth, and in a continued bid to progressively think electric, new homes and buildings in England will be required by law⁸ to have electric vehicle charging points installed from 2022. This law isn’t just limited to homes but also includes new build supermarkets, buildings and workplaces.

What does this mean for you? Is it more expensive to insure an electric car?

A recent report studied by Which⁹ states that green-minded motorists could make a saving on their insurance bills with electric vehicles typically proving to be £45 cheaper per annum than petrol or diesel cars to insure. However, it is worth keeping in mind that your insurance premium is based on more than just the fuel-type of car…

…Two major considerations being the cost of parts and labour. Where vehicles have more specialist engineering and perhaps parts are produced in lower numbers, repair costs and therefore the costs of an insurance claim could be higher, even more so if the vehicle needs to go to a specific repair centre with high labour costs. As a result, premiums are likely to be higher than for a comparative petrol or diesel model.

And don’t forget about the battery!

Batteries in EV’s are a bit of a ‘grey’ area. When buying an electric vehicle, you may have the option to hire rather than buy the battery, largely due to their replacement cost and potentially limited lifespan.

The important factor to consider here is whether there is ‘insurable interest’ – are you the person liable for the cost of replacement or repair if the unit suffers damage or is stolen? If you are, then you have insurable interest and, in most cases, a motor insurance policy should cover you as standard. There are always exceptions to the rule however, so it is important that you check the terms of the lease contract and declare this arrangement to your insurer so that they can confirm cover is in place.

How about performance?

There is a stark contrast in performance; with instant power comes instant speed, meaning that acceleration is often far more rapid in electric cars. For example, the Nissan Leaf e¹⁰, considered to be a modest family hatchback by most (perhaps comparable to a Nissan Micra¹¹ or Ford Fiesta) can go from 0-62 miles per hour in under 7 seconds, almost a second quicker than a petrol-powered BMW¹² 420 M Sport and 5 seconds faster than the top of the range, petrol driven Micra!

For more ‘sporty’ electric vehicles, this performance is even more striking, with super car level acceleration within easy reach. For example, the 2021 Tesla Model 3 Long Range AWD goes from zero to sixty in just 4.2 seconds. And that’s not all, if you choose to upgrade the software with the “Acceleration Boost” software you’ll be at 60 mph in 3.9 seconds¹³. Watch out for those speed cameras!

With this rapid speed available in seconds, insurance companies will often be more cautious when it comes to offering terms, particularly where the driver hasn’t had experience of similar levels of power and handling. Therefore, when buying an electric car, it is worth giving us a call to run through what you are hoping to buy vs the potential cost of insurance prior to committing to the purchase.

1. https://www.power-technology.com/news/electric-vehicle-sales-surge-in-2021/
2. https://www.theguardian.com/environment/2021/nov/10/what-if-we-just-gave-up-cars-activists-press-cop26-leaders-to-dream-big
3. https://www.theguardian.com/environment/2021/nov/10/what-if-we-just-gave-up-cars-activists-press-cop26-leaders-to-dream-big
4. https://www.gov.uk/government/publications/cop26-declaration-zero-emission-cars-and-vans/cop26-declaration-on-accelerating-the-transition-to-100-zero-emission-cars-and-vans
5. https://www.gov.uk/government/news/uk-confirms-pledge-for-zero-emission-hgvs-by-2040-and-unveils-new-chargepoint-design
6. https://www.ft.com/content/a0575122-404d-4d11-b54b-f1af77733a4e
7. https://www.autoexpress.co.uk/rivian/355696/rivian-offered-incentives-british-government-build-uk-factory
8. https://www.bbc.co.uk/news/business-59369715
9. https://www.which.co.uk/news/2021/05/electric-car-insurance-premiums-fall-could-you-save-money-with-a-greener-vehicle/
10. https://www.nissan.co.uk/vehicles/new-vehicles/leaf/dimensions-specifications.html
11. https://www.nissan.co.uk/vehicles/new-vehicles/micra/prices-specifications.html#grade-MICRAK14D-3|specs
12. https://www.bmw.co.uk/en/all-models/4-series/coupe/2020/technical-data.html
13. https://insideevs.com/car-lists/fastest-evs-in-the-world/