This includes a thoughtful research project in collaboration with its Consumer Advisory Group, into the feasibility and impact of various social policies focused on helping low-income households manage their insurance costs.
Focussing on low income households is especially important because personal car ownership has been proven to enhance life opportunities for this demographic. Put the other way round, not being able to afford your own car reduces access to good quality work and social mobility. This is a subject Altelium has explored before in an article entitled “Ensuring a fair and equitable transition to the clean transport market,” and in this context the ABI work is particularly to be commended.
But the insurance market has overlooked a core feature of the market that will be vital to everyone, particularly those in low income households in future - the ability to buy and insure a reliable second hand electric vehicle (EV).
The second hand market is where eighty per cent of people source their cars. In 2023, used EV sales grew by 90.9% to 118,973, but this was just 1.6% of all used car sales. Sales of used EVs may be in excess of 700,000 by 2030, over 9% of all used car sales.
For these used EVs, a battery health certificate will be vital proof that the vehicle is worth buying – who otherwise will trust what the vehicle’s true range is, or that the battery will last?
The insurance industry should put battery health tests at the heart of any future plans to manage premiums because it is also good for people and good for the planet.
A healthy battery is a sign of a particular type of driver. One who has consistently charged it smoothly, avoided repeated fast charging, been easy on the brakes and acceleration and is therefore far more likely to be safe driver. The precious resources in the battery will last longer, and the driver will have a car that lasts longer and has a higher resale value.
Insurance discounts tied to annual battery health testing would:
1. Incentivise owners to drive and operate their vehicles to maximise vehicle health, protecting value and resources.
2. Offer a way to reduce insurance premiums.
3. Align with the broader goal of promoting equal access to sustainable transportation.
Alex Johns Altelium Partnership Lead said “The insurance industry should be exploring with a sense of urgency the value of an annual battery health check as part of policy renewal. It would put the insurance industry firmly on the side of the consumer and makes complete sense for people and planet alike.”
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