The car industry, a cornerstone of our economy, is getting an electric shock. We’re talking about the electric vehicles (EVs) that are slowly taking over the market. They’re not just a cool transport option for the tech-savvy anymore. EVs are fast becoming the go-to for everyday drivers.
This shift is shaking up the industry. But what does it mean for the stakeholders? How are EVs affecting automakers, insurers, and industry workforce?
The Auto Manufacturing Shift
Traditional auto production was all about engines burning petrol or diesel. However, electric vehicles (EVs) are sparking a brand new shift.
Instead of the usual engines, EVs use batteries. This change means we’re introducing new materials and upping our assembly game.
EVs need lithium and germanium, among other rare elements. These materials were not particularly necessary in the old car industry.
For example, by 2030, the number of EVs will require a supply of batteries amounting to 100 gigawatt hours of energy. This means the industry will have to increase the supply of germanium by 50 percent each year.
Assembling EVs is a different ballgame. Sure, they have fewer moving parts, but adding high-tech battery systems brings unique challenges and demands skilled technicians.
Then comes the factory makeover. Old-school car production plants are not suited for making these electric marvels. So, manufacturers are bringing in new equipment, transforming facilities, and upskilling their workforce. Sometimes, it’s ground-up construction, opening doors to car-making innovation and sustainability in new factories.
The Ripple Effect on Car Insurance
This EV revolution isn’t just jolting manufacturing but also sparking car insurance changes. With EVs, the future of car insurance faces a whole new set of risks.
Fixing an EV or replacing its parts can be a costly affair, especially when it comes to the battery. As the heart of an EV, if this expensive component takes a hit, the repair costs surge, nudging insurance prices upward.
Understanding an EV battery’s performance over time or in harsh weather is still being studied. This is uncharted territory compared to traditional engines we have years of data on.
Pioneering insurance providers are now tailoring particular policies for EVs, factoring in unique considerations like charging infrastructure.
Policy and Law Makeovers
Government acts and regulations aren’t exempt from the electric transformation either. As EVs speed up, governments are overhauling rules to foster greener transport.
Tax credits and rebates for EV purchases are becoming the norm, making these cars an attractive choice. These incentives encourage more people to join the EV bandwagon and stimulate manufacturers to ramp up EV production.
The U.S. government, for example, gives a money-back deal of as much as $7,500 when you buy or lease an electric car or a plug-in hybrid vehicle. Plus, some states have their own programs that will give you monetary incentives when you purchase an electric vehicle. The amount you get back and who can get it changes from state to state.
The tightening noose of emission standards is another catalyst for the rise of EVs. As these standards become more stringent, it gets increasingly difficult for traditional cars to keep up, giving EVs a leg up.
But the rules of the game are unique across the globe. While some countries like Norway and China are charging full speed ahead with EV-friendly policies, others are playing catch-up. For players in the auto industry, keeping up with this policy kaleidoscope is crucial.
EV-olution of Jobs and Skills
Let’s not forget the human component: jobs. As the world shifts gears from combustion engines to electric batteries, roles and skills in the auto industry are shifting.
Yesterday’s skill set was about designing, producing, and maintaining gas-fueled engines. But the EV era requires knowledge about electric power systems, high-voltage battery technology, and digital control systems that steer EVs.
Sustainability and clean energy expertise is becoming more valuable, reflecting the industry’s intensifying focus on carbon footprint reduction. The ripple effects of this focus extend beyond car production, permeating material sourcing and vehicle end-of-life practices.
For workers rooted in traditional roles, this could mean adding to their existing skills (upskilling) or learning new ones (reskilling). This further complicates an industry still affected by job shortages.
Peeking Into the Future
The road to the EV future has several interesting pit stops. Here are a few trends gaining traction:
Efficiency
One big trend is the improvement in battery efficiency and range. Scientists and engineers are constantly improving battery technology, making EVs more efficient, able to go longer distances on one charge, and cheaper. This progress will likely make EVs even more attractive to buyers.
AI
The advent of self-driving cars, often electric, is another exciting development. With big bets placed on AI technology, a future where self-driving EVs are commonplace is pretty close.
Infrastructure
Another prediction is about the charging infrastructure. As more people buy EVs, there will be a need for more charging stations. This growth will likely lead to new charging technology ideas and could change how we think about “refueling.”
Jobs
Also, the shift towards EVs will probably continue to change job roles within the industry. As mentioned, there will be a bigger need for workers skilled in EV technology, from making to maintaining these cars. This change could lead to new job opportunities and education programs.
As EV popularity rises, these trends will gather momentum. The auto industry’s challenge and opportunity lie in navigating and shaping these changes.
Into the Future With EVs
The surge of electric vehicles is steering the auto industry down a new road. It is rewriting the rules of car production, insurance, policy, and even job roles.
As we look to the future, it’s clear that EVs aren’t just a temporary trend but a monumental shift. They represent a new era in the auto industry. An era of clean, efficient, and sustainable transportation.
The industry’s stakeholders must continue to adapt and innovate in this evolving landscape, paving the way for the future of mobility.
The electric revolution is here, and its impact is felt far and wide. It’s an uncertain but exciting time for the auto industry.
https://www.marketwatch.com/guides/insurance-services/future-of-car-insurance-rise-of-evs/
https://insideevs.com/news/427865/evs-challenge-insurance-companies-agcs/
https://www.spglobal.com/marketintelligence/en/campaigns/electric-vehicles
https://explodingtopics.com/blog/auto-industry-trends
https://news.mit.edu/2021/designing-better-batteries-electric-vehicles-0816
