The growing electric car market

The growing electric car market

Global trends are clear, starting from the Chinese market, which is experiencing a rapid increase in sales on the number of battery electric vehicles (BEV) and plug-in hybrid electric vehicle (PHEV). Some 600 000 units were sold in 2017 (double compared to the previous year), which is more than Europe with 215 000 vehicles.

In the US however, 2018 will be the tipping point and most profound year in EV history. From about 100 EVs sold in 2010, 10 000 in 2011, 100 000 cumulative through 2013, 100 000 in 2014 and 200 000 sold in 2017, the growth of EVs has grown exponentially.

Surprisingly, in Norway the number of electric powered cars has almost exceeded the number of internal combustion engine cars.

The South African situation
South Africa’s submission to the Paris Agreement on climate change states that the country should have more than 2.9 million electric vehicles on the road by 2050, with R6.5 trillion to be invested in the industry over the next four decades. The agreement says going electric will create a huge local industry. Instead of importing fossil fuels, power for vehicles will be generated from solar panels and wind turbines. The power will be reserved in batteries of platinum, a material that South Africa is rich in beyond any other country.

While electric cars remain beyond the reach of many South Africans for the moment, it’s expected that there will come a time where one in every three new car sales in the country will be an electric car.

What does the rest of 2018 hold in store for electric vehicles?

  • The monthly electric vehicle sales rate is expected to double by the end of 2018 with the affordable, long-range Nissan Leaf, Chevy Bolt and Tesla Model 3 now available.
  • US plug-in car sales will nearly double to 2% of its auto market.
  • 2018 will be the inflection point with improved technology, vehicle diversity and overall sales experience helping propel the EV client base beyond early adopters.
  • Convenience and “range confidence” will grow enormously, with dramatic drops in “fuelling” time as Level 2 and DC Fast charging come online. While fixed infrastructure remains the number one priority, mobile charging systems will make access much easier, especially in this transitional time.
  • The first EV from a major automaker will ship with wireless charging. Everything is going wireless and EVs are no different. No mess, no hassle and no plugs. As BMW recently started promoting, wireless charging will be easier than refuelling.
  • In 2018, the new focus will be on the “fleetification” of everything and how that, coupled with electric drive, will change our lives more than we ever expected.
  • Managed fleet companies (like Avis Budget Group) will announce major programmes to electrify their fleets and non-managed fleet companies (such as Uber, Lyft) will announce incentives for drivers to use electric vehicles rather than combustion vehicles.
  • 2018 is when EVs become mainstream, with nearly every large automotive company having an EV offering.

Many analysts predict that in about 20 years, the BEV and PHEV car sales in the world will exceed 50% of cars sold.

So which electric cars are rated tops in their class?
Best overall
Tesla Model 3

Best long range EV alternative
Chevy Bolt EV

Best affordable EV
2018 Nissan Leaf

Best luxury electric car
BMW i3

Best electric performance car
Tesla Model S P100D

Best electric crossover/SUV
Kia Soul EV

And now for the million dollar question. Is it more expensive to insure an electric car than a petrol-powered one?
The main concern for companies providing cover for vehicles is the risk associated with driving the vehicle, whether it runs on petrol or electricity. Insurance rates are normally based on variables that include how likely the driver and car are to get in an accident or hijacked. For example, a car with a high-output engine is likely to attract a higher premium than the average compact car. But just how electric cars will affect car insurance isn’t totally clear as companies still lack statistical evidence to support the risk of driving a car such as the BMW i3 or Nissan Leaf. In fact, most traditional insurers don’t provide cover for electric vehicles as there are very few currently driving on our roads. The present situation is that owners of green vehicles may need to find specialist insurers which have customised products for their needs. Cover for electric cars will become more mainstream over the next year as they reach a wider market.

As a rule, think along the lines of a luxury car or imported vehicle. These are generally harder to insure; if it is involved in a crash or breaks down, new components will not be readily available in South Africa and will need to be shipped in. This can be extremely costly and take up a great deal of the insurer’s time.

Regardless of what car you drive, the best way to find a deal on your car insurance is to speak to your broker.