How can we jump-start the switch to electric vehicles

In 2020, the combined yearly sales of battery electric vehicles and plug-in hybrids passed 3 million worldwide for the first time, with the UK in 5th place with 181,000 sales. Electric vehicles now account for 11.1% of all new vehicle registrations, compared to 3.2% in 2019. As of the end of December 2020 there were more than 435,000 registered electric cars in the UK.1

With nine years left until the government’s 2030 deadline to ban the sale of all petrol and diesel vehicles, and only one in every 70 drivers currently driving an electric vehicle, what can be done to make the UK go electric?1 And what are the potential insurance risks that electric vehicle charging point projects need to consider?

What is stopping UK drivers from adopting electric vehicles?

According to research, some of the reasons include1:

  • Lack of charging points – Research shows that charging point availability is the biggest disadvantage of electric vehicles. In fact 63.5% of drivers see this as an obstacle for considering adopting an electric vehicle. There are currently 37,200 charging connectors in the UK, but the Office for Low Emission Vehicles (OLEV) has allocated funding of £20 million for on-street residential projects in 2020/21 covering 75% of the cost for procuring and installing charging stations with a dedicated parking space.1
  • Vehicle range – the second biggest disadvantage of electric vehicles according to 59.6% of drivers. This ‘range anxiety’ is further impacted by the perceived lack of charging points and the concern that they will run out of charge before they can find one. However over half (52%) agree that it is improving.1
  • Charging speed – 55.9% of drivers cited this as a disadvantage of electric vehicles as they are concerned it will take too long to charge when travelling. However, charging times are getting better and some electric vehicles can add hundreds of miles in as little as 20 minutes.1
  • Cost – Over half of drivers (52.9%) see the cost to purchase or lease as a barrier to buying an electric vehicle. However, while they are more expensive to buy they tend to need comparatively little maintenance. Analysts also predict that we may see price parity with petrol and diesel cars by 2024.1

Considerations for electric vehicle charging point projects

There is currently a geographical imbalance of charging stations. London accounts for 27% of all charging stations in the UK, with an average of 10 cars per charger. Whilst in the South West of England there is on average 1448 cars per charge.

However, government funding may help to reduce this problem with more electric vehicle charging station projects and the launch of Gridserve’s electric forecourts launched in 2020 with more planned around the UK in 2021.1

With new electric vehicle charging point projects, whether you’re an installer, investor, funder, owner or project manager, it’s important to have the right cover in place for both the construction and operational phase of the project.

The type of cover that you need will depend on the type of electric vehicle charging station that you have. For example:

Cover consideration for standalone EV chargers and EV forecourts

  • Public and products liability – cover protecting you against any damage to third party property or injury to third parties. The main exposures being slips, trips and falls. Consider the physical charging and how you can mitigate people tripping over the charging cable. In commercial and public settings this could be your visitors, neighbouring businesses etc. In domestic settings this could be visitors, postal workers, deliveries or tradespeople.
  • Asset cover – cover against damage to charging points and associate equipment. The assets will need cover in the event of malicious damage or defacing of the points. There are many factors to consider, such as the cost to replace standalone chargers, to determine if this cover is pertinent to you or not. For forecourts this cover would be required. You also need to consider any contractual or lender requirements to have this cover.
  • Loss of revenue – cover against the loss of income following damage to your EV charging point or forecourt. This could be a requirement for lenders and if not this should be reviewed to determine any single points of failure and the knock-on effect this has to your network of chargers. For forecourts this must be considered.
  • Infrastructure - You should also consider the surrounding infrastructure of your charging station or forecourt. For example, where are your chargers receiving their power from? What happens if this fails?
  • Cyber insuranceCyber security of smart electric vehicle charging against cyberattacks is of the utmost importance. This complex cyber-physical connection of electric vehicles, charging stations and power grids can be maliciously exploited to seriously harm the equipment, or power grid, or both. In addition, due to the way customers may pay for the use of the station, they may be at risk of a cyberattack for personal data and card details. So it is essential that you establish risk controls to mitigate and determine who is responsible for the data.

Are you prepared for the electric vehicle revolution?


1 AX Whitepaper ‘what will finally start the electric vehicle revolution?’, Feb 2020