Obtaining the “Unreachable Goal” EV Companies Have Set Forth
The Biden administration has proposed a lofty goal of 50% of automotive sales being electric vehicles by 2030. Considering the current adoption rates for electric vehicles in the US compared to Europe, or the current leader, China, this is going to take a massive realignment for the entire industry.
An important piece of this infrastructure support puzzle is getting the auto insurance industry prepared and on-board with a scaled EV shift. Because right now, it’s not doing EV adoption rates any favors; research from ValuePenguin found insurance premiums are usually higher than traditional gasoline-powered cars, meaning EVs don’t actually become more affordable for drivers in the long run until 8 years into ownership, on average.
While President Biden’s goal may seem unreachable, the willingness of vehicle manufacturers to partner with the government to reach that goal forces us to consider the possibility. While the current EV market is small, it’s not uncharted territory. The Biden administration would do well to study the top cities for owning an EV and employ some of those cities’ strategies.
Insurance companies will need to make sure their analytics fairly represent the risk that electric cars present, and they should explore partnerships with repair companies, dealers, and parts manufacturers, and even the government to help them lower the costs of repairs, thus lowering their risk and the customer’s rates.
Melanie Musson is a published insurance expert who specializes in EVs at 4AutoInsuranceQuote.com.
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