Table of Contents

GLOSSARY OF TERMS

AC (Alternating Current) Slow charging: AC (alternating current) charging is one of the two methods of charging an electric vehicle which is slow since the charger sends electric current to be converted to electric power before sending it to the EVs battery.

Battery Electric Vehicle (BEV): Also called a pure electric vehicle, only-electric vehicle, fully electric vehicle or all-electric vehicle is a type of electric vehicle that uses energy exclusively from an on-board battery.

Charging Connector: Charging equipment for plugging in to a power source to charge an electric vehicle (EV). Are usually charging cables that have two connectors – one that connects to the power source and one to the vehicle’s charging port.

Charging Station: A dock location or geographical point that charges electric vehicle batteries through the transfer of electric energy.

DC (Direct Current) Fast Charging: One of the other two methods of charging an electric vehicle which offers accelerated charging, primarily available at public charging stations away from home. This type of charging allows for high power transfer and faster recharge times as opposed to AC Charging.

E-Mobility: A collective term for passenger vehicles, bikes, boats, drones and aircraft that are partially or fully powered by electricity. They get their energy from the electricity grid and store it ‘on board’ in a battery.

EV (Electric Vehicle): A vehicle that is powered by electricity and an electric motor. It can be a ground vehicle (car, bicycle, motorcycle, scooter, cart or forklift) or a seaborne vehicle (motorboat, jet ski or submarine) or airborne vehicle (drone, aircraft

EV Battery: The rechargeable EV battery stores the energy that powers the vehicle’s electric motor, in most cases in a lithium-ion (Li-ion) battery.

Fuel Efficiency: A measure of the distance an internal combustion engine vehicle can travel on a single unit of petrol/diesel i.e., per litre or gallon.

Hybrid Electric Vehicle (HEV): A vehicle with an internal combustion engine (ICE) as well as an electric motor. Normally the internal battery covers low-speed journeys and can’t be charged separately. Once the electric charge depletes, the battery recharges using the internal combustion engine or upon ‘regenerative braking’.

ICE: Stands for internal combustion engine, which is an engine powered by fuel in the form of diesel or petrol. It may occasionally, herein, generally refer to fossil-fuel powered vehicles.

Incentives: As the world transitions to green energy and renewable resources, many governments have offered intervention strategies, often called ‘incentives’ aiming to boost EVs uptake and/or reducing reliance on ICE vehicle. Examples of incentives include tax rebates, off-peak charging and slashed parking rates.

Insurance Premiums: The amount of money one has to pay to the insurance company for their insurance policy.

Off-Peak Charging: Refers to charging a purely electric or hybrid vehicle during hours when electricity demand and consumption is lowest.

Plug-In Electric Vehicle (PEV): Vehicle that can utilize an external source of electricity to store electrical energy within its onboard rechargeable battery packs, to power an electric motor and help propelling the wheels.

Plug-In Hybrid Electric Vehicle (PHEV): A vehicle with an electric motor and a petrol or diesel engine. It can drive solely on electricity from the battery but the ICE engages once the electric battery runs out of charge. You can plug-in the car to charge the battery.

Range: The total distance an electric vehicle can travel on one full charge before the battery needs to be recharged.

Regenerative Braking: The process electric vehicles use to capture the kinetic energy used in braking to power the vehicle’s battery.

Renewable Energy: Energy sources that naturally replenish, such as solar or wind power.

Smart Grid: An advanced electrical grid that uses digital technology to monitor and manage the flow of electricity from all generation sources to meet varying electricity demands.

INTRODUCTION

We are fast approaching the era of the electric vehicles (EVs) and generally of electric mobility (E-Mobility). Thus, it is best if we all make hay while the sun shines on the electrification of modern transport. Since the Covid-19 pandemic, global sales of electric automobiles or vehicles (EVs) have increased while availability of EV models has expanded. The rise of EVs is now revolutionizing the automotive industry by changing how we shuttle from place to place efficiently, providing exciting opportunities to grow for businesses.

But one might ask why electric vehicles (EVs) in the first place? Well, primarily the main idea leading to increased use and penetration of EVs globally is climate change and sustainability issues. To address the growing climate crisis, and to reduce green-house gases emissions of which a substantial amount comes from the transport sector, the mass adoption of E-Mobility is a step in the right way to reverse and halt the damage done thus far. As we shall see in sections below, saving our planet’s ecosystem inspired this novel approach of transportation.

To map out the needs of the E-Mobility sector in Kenya and those of the insurance industry, BIMA TV KE put together this informative piece that provides value to all stakeholders involved in both sectors.

DEFINING & CATEGORISING EVs

Electric Vehicles (EVs) use an electric drive motor for propulsion i.e., to say they run on an electric motor powered from electricity produced from a battery or fuel cell. Electric vehicles are classified based on the hybridization rate which represents the degree of electricity used by the vehicle. Hybridization rate describes how much technologies have been mixed and role played by the electric motor in the vehicle performance. There are primarily two types of electric vehicles: Hybrid Electric Vehicles (HEVs) and Battery Electric Vehicles (BEVs). Hybrid electric vehicles utilize both internal combustion engines and vehicle batteries that power electric motors. Drivers can fill up their gas tank and go, but benefit from a ‘regenerative braking’ system that charges the internal battery, storing the energy created otherwise lost by braking the vehicle. An HEV’s battery can’t be charged with a plug like other kinds of electric vehicles. Battery electric vehicles (BEVs), also known as all-electric vehicles, are able to connect to the grid with a plug and charge up with the same electricity running through our homes and businesses. PBEVs don’t have any combustion engines that requires petrol or diesel, a design feature that means there are no direct fossil fuel-related emissions from the vehicle while driving.

ROLE OF INSURANCE IN EV INDUSTRY

With increased interest in EVs, not just in Kenya but globally, it is a no-brainer that the insurance industry has a very critical role to play in protecting the investments that are electric vehicles. Car insurance has been with us for quite some time now as cars have. To get an insurance cover for a car is not just a government mandate that removes unnecessary inconveniences of complicated compensation to injured parties, but also easily allows for hustle-free repairs eliminating sudden out-of-pocket repair costs. Importantly, insurance covers for mobile vehicles are a guaranteed way of protecting one’s investment for the future. Therefore, car insurance protects people, property and livelihoods and essentially, keeps the wheels of society turning. At BIMA TV, we have been bringing more awareness about car insurance through innovative ways like BIMA TV CUP, ensuring no car owner or enthusiast has a reason to miss out on car insurance coverage.

In this era of electric mobility, car insurance has morphed and adapted to the times such that insurance players are innovating products for EVs as they compete to tap into this emerging market. EVs insurance policies feature almost similar coverage options when compared with ICE cars, such as liability, bodily injury, collision and comprehensive coverage. Differences, however, arise from different insurance companies according what their weighted methodologies of risk assessments among other factors.

The process of getting car insurance for an electric vehicle is the same as it is for a conventional ICE car. There’s no special insurance requirement for electric cars. You will not need extra identification documents or anything of that sort. The only thing you should probably know by this stage is that electric cars are a tad-bit more expensive to insure. This is because EVs cost more to build, repair and replace than a traditional, gas-powered car. Though this will certainly change as the EV s automotive industry breaks even in term of investments and mass adoption of EVs by the public occurs. In this article, we’ll explore the unique aspects of insurance for electric vehicles and shed light on key considerations for EV owners.

GLOBAL EV MARKET VIS-À-VIS THE KENYAN EV MARKET

GROWTH

Both the global and Kenyan EV market has experienced exponential growth since late 2010s when a consensus was crystallizing about the urgency for climate action and a greener future. The year-on-year increase trends indicate that EVs demand is accelerating and growth remains robust as EVs markets mature. It is mainly fueled by continuous policy support, manufacturers competition and reducing EV prices.

According to the Global EV Outlook 2024, 14 million new electric cars were registered globally in 2023, bringing their total number on the roads to 40 million (Placeholder3). 95% of which were in China, Europe and the United States meaning that EV sales remain significantly concentrated in just a few major markets. Electric cars accounted for around 18% of all cars sold in 2023, up from 14% in 2022 and only 2% 5 years earlier, in 2018. More electric models are becoming available globally even as sales increase slowly in emerging and developing global markets.

Regionally in Africa, Morocco and Egypt lead the transition to e-mobility in Africa followed by Mauritius and Seychelles. Kenya is however a regional leader in the EV sector in East and Central Africa in terms of foreign direct investment (FDI) for EVs. Uptake of EVs in Kenya increased five-fold from 475 units in 2022 to 3,753 registered EVs in 2023. This record surge has been attributed to government incentives among other factors.

MAINTENANCE AND EFFICIENCY OF EVs IN KENYA

When assessing the efficiency and maintenance of EVs across various regions of the world, there are certain parameters available for drawing upon informed comparison. Some of them include specific government incentives, accessibility options for EVs, range of EVs, and fuel costs compared to electricity costs. Also a quick look at electricity access and affordability in one’s locality will help to inform more on the efficacy and efficiency of acquiring an EV.

First, government incentives through markets collaboration and infrastructure development are diverse and ever increasing. The sustainable management of its own natural resources and those of the world has necessitated the Kenyan government to incentivize investments that promote cleaner energy. From slashed import duty rates for battery EVs to mandating construction of charging stations docks in public housing to tax breaks for EV manufacturers, the Kenyan government is stopping at nothing to ensure EVs are efficiently transitioned into by all players.

As Kenya’s population is steadily rising and the country rapidly urbanizing, this exerts a lot of strain on the existing infrastructure. The main sector areas that are creaking under the intense pressure are transport and energy. Many individuals rely on fuel for transport, which creates a massive financial burden for the government to import more fuel, using up the inadequate foreign reserves for import cover. Electric automobiles create a reliable transport alternative, eliminating the excess dependency on fuel. EVs do not have direct emissions, meaning that the air quality in urban areas is going to improve significantly since the transport sector is responsible for 12 % of GHG emissions in Kenya.

As EVs have become more accessible, options like buying, leasing and renting EVs have increased even as companies specializing in EVs and its infrastructure have proliferated the country. BasiGo, CleanTechnica, Autopax Air EV Yetu, EcoBodaa Kenya, Opibus, Ecotrify, Roam Electric, Kiri EV, Nopea Ride, HK-Motors EV, EVM Africa, Caetano, Stima Boda, EkoRent Africa and Agilitee Africa are some of the companies operating in the EVs space in Kenya. Public private partnerships (PPPs) have improved market conditions and infrastructure necessary for EVs to operate in. The smart grid for EVs in Kenya is much better allowing for more EV charging stations, EV garages and parking garages. But more investment is needed as the bulk of these EV associated infrastructure are concentrated in urban and metropolitan Kenyan cities.

When it comes to the range of electric cars, it is important to first understand that there are two ways of understanding range. Mainly because there is what manufacturers use to advertise electric vehicles, and the real-world range which is what you should expect from that car. Always bear in mind that there are many factors that affect the range of an electric vehicle including temperature (the warmer the better), road conditions, weight of the electric car and the driver’s driving behaviour. For more certainty, a look at the Real-World Range might give a more realistic idea of the range one will experience in their EV in Kenya.

Another key consideration includes comparing fuel costs and electricity charging costs. Energy costs are number one consideration for many motorists, regardless of the automobile type. Fuel efficiency is a big concern for ICE cars as fuel economy is heavily factored in ability to maintain a car. One major win for ICEs over EVs is the convenience of accessing fuel stations but that may fast be overturned as EV carmakers are simultaneously investing in increasing public charging stations. For the EVs, electric charging costs depend on the type of car charging (AC or DC), local energy regulator and distributor rates, and shelf life of EV batteries. In Kenya, government-owned energy regulator (EPRA) and Kenya Power Lighting Company (KPLC) introduced an e-mobility tariff to help utilize excess capacity during off-peak periods when cheap renewable energy goes wasted. On average comparison, EVs can provide significant savings on maintenance costs, energy cost-per-distance covered savings, and the longevity of EV batteries and the lack of routine maintenance means an expanded value for an almost similar timespan compared to ICEs.

ENVIRONMENTAL & SAFETY BENEFITS OF EVs

CONTRIBUTION OF EVs TO ENVIRONMENTAL SUSTAINABILITY

Electric vehicles (EVs) are indispensable for environment protection by the following ways. Transportation is among the largest source of greenhouse gas (GHG) emissions across the world and, as such, any plan to achieve a net-zero GHG economy must reduce transportation GHG emissions to near zero. This process of reducing GHG emissions is also referred to as decarbonization, since carbon dioxide makes up the majority (97%) of greenhouse gases emitted by transportation activities. EVs have reduced or zero exhaust emissions depending on the type. As a result, the reduction of particulate matter and nitrogen oxides, which are detrimental for human health, and the environment will improve air quality. Electric mobility is therefore a key area of action to contribute climate action.

Further usage of EVs will lead to improved renewable energy infrastructure since the charging points for battery powered vehicles lead to improvement of renewable energy infrastructure. This is good for climate change mitigation especially since reduced use of fossil fuel to power cars translates to increased utilization of renewable energy like wind and solar power. Current battery charging systems for EVs are formulated in a way that minimizes the use of fossil fuels while increasing the utilization of clean sources of energy, in the process promoting the enhance of greater innovation within the renewable energy industry.

Kenya aims to capitalize on its position as a global leader in renewable energy and broad technology adoption. It is no surprise therefore that it has aligned its national aspirations like foreign policy and medium & long-term plans (vision) to incorporate and encourage EVs penetration. A strong orientation towards environmental issues is a distinct feature of Kenya’s Foreign Policy upon which the country’s sustainable development is anchored on. As Kenya aims to reduce its carbon emissions by 32% by 2030 as part of its Nationally Determined Contribution in the Paris Agreement and is also working to lowering its reliance on oil imports, EVs have become an integral part of its plans.

BASIC ADVANTAGE-DISADVANTAGE COMPARISON BETWEEN EVs AND ICEs

If economics is all we base profitability on in this 21^st Century, then one might ask which numbers are better: those of the EVs or those of ICE vehicles? The numbers are many, the statistics are mind-boggling and they include those of time in regards to durability of essential car components, charging and fuel costs, repairs, range (distance travelled), speed and acceleration among others. So, we have narrowed down to the most basic advantage-disadvantage comparison between ICEs and EVs.

The monumental shift in technology where EVs have replaced liquid fuel for batteries and combustion engines for electric motors, has a ton of costs and benefits on each side of the scale. Depending on whether you are eco-conscious or a car enthusiast, the benefits of having, driving or switching to an electric car far outweigh the costs. For climate action activists, the proof of EVs being better than fuel powered cars is in the reductions of green-house gases, fossil fuel dependencies, and pollutants. They give credit to EVs for incorporating innovative features that underscore their environmental contributions as a green technology.

For car enthusiasts, especially those who favour high-performance cars, the enormous advantage of EVs over ICEs is in the delivery of power. An EV delivers far more speed and faster acceleration than a conventional fossil-fuel car in a far shorter time period. Also, EVs have a lower center of gravity due to the lowly placed, heavy battery pack allowing for better cornering, handling and more stability.

The biggest downside to EVs, so far, is the limited range and charging time. Most EVs have a standard range that does not favour extended driving. This, for many motorists translates to ‘range anxiety’ where the constant worry of the EV battery running out along the journey is amplified by few charging stations along the transportation route. Charging time is another limiting factor for EVs where the charging time depends on the type of charger one has access to and the size of the battery pack.

GENERAL BENEFITS OF EVs

Reduced or zero emissions like volatile carbon oxides and organic compounds means that air quality we breathe will be better.
EVs are fast and quiet acceleration reduces noise pollution.
Reduced carbon footprint translates to slower pace of climate change and global warming.
EV charging costs are considerably lower than fuel i.e., fueling a car with petrol or diesel costs more than the electricity expenses of operating an electric vehicle.
Energy dependence means that with dual options of public charging stations and home charging station, one can plug their EV even at home and it will be ready to go.
Reduced EV maintenance expenses means that there is no need to worry about regular oil changes or periodically changing parts such as fan belts, gaskets and radiator hoses. The maintenance costs for an EV are much cheaper than that of an ICE car. This is mainly due to the fact that EV’s do not have an engine, and most just require basic tyre, air filter and other checks every two years.

WHAT ALL THIS TRANSLATES FOR THE INSURANCE INDUSTRY

From an insurance angle, this advantage-disadvantage argument might cancel out in terms of risks of EVs. This is to mean that while powerful delivery of more speed and quicker acceleration is good for motorists, it might be bad for other motorists and pedestrians since the likelihood of accidents occurring is higher. On the other hand, the limited range of EVs translates to lower number of accidents since there is reduced possibility of driver fatigue caused driving for long distances. Fatigue is a common cause of accidents, more so in the developing world where terrains are tedious and roadside resting facilities are inadequate.

GOVERNMENT REGULATION IN EVs SECTOR

NEED FOR GOVERNMENT REGULATION

Apart from facilitating beneficial market conditions to the population, modern governments are also tasked with guaranteeing uniformity and enforcing rules by intervening using various instruments at their disposal. Government intervention refers to the government’s deliberate actions to influence resource allocation and market mechanisms. It can take many forms, from regulations, taxes, subsidies, to monetary and fiscal policy.

The adoption of EVs is a complex and unpredictable process that is unlikely to occur on its own. Some of the strategies adopted by many governments across the world are intervening through incentives aim to promote fair competition, provide public goods like infrastructure, change consumer behavior, and preserve the environment. To encourage uptake of EVs, governments in the developed and developing world are reducing taxes for EV startup companies and increasing eco-levies to ICEs manufacturers. Governments like in America are mandating to end purchases of fossil fuel powered cars in a bid to promote EVs. The global electric vehicle fleet is set to grow twelve-fold by 2035 under stated policies, as projected by Global EV Outlook 2024.

Insurance regulation seeks to protect consumers and promotes fairness of the insurance industry. In the fast-growing EV markets, where new technologies are being introduced and others are rendered obsolete almost daily, it is imperative that insurance regulatory authorities become more involved in the discussion. Their singular entry point into E-Mobility conversations will help direct and offer guidance on uniformity of insurance products for EVs as well as lobby government resources where they are best needed in order for the insurance industry to create affordable, innovative products.

The harmonization of policies and standards across board will speed up adoption of EVs in the same way, absence of standardized regulations for EVs and their infrastructure can lead to fragmentation and market inefficiencies.

KEY STATISTICS & REGULATIONS OF EVs IN KENYA

ELECTRIC ENERGY GENERATION & CONSUMPTION

The Kenya grid capacity is sufficient to support e-mobility. Kenya has expanded the generation capacity of a well-diversified mix with nearly 90 % of energy being generated from clean sources (mainly geothermal, hydro and wind).

Kenya has a total electricity installed capacity of 3,713.4 MW as of June 2023. The country recorded a new peak demand of 2,177 MW on 21st February 2024. Based on this peak demand, there is a healthy margin of over 40% of the installed capacity that is left unutilized. The difference between peak and off-peak demand in Kenya on a normal day is about 1000 MW. To maintain system stability, power generation is generally curtailed during these off-peak periods. This is a lot of energy that could be used to create demand at night. E-mobility can help bridge this gap by charging EVs, especially at night. On average, a 51-seater bus has a battery capacity of 180-200 kWh to give a 200 km range. The daily curtailed energy can therefore put about 7,000 electric buses or over 200,000 electric motorcycles on the road.

ELECTRIC VEHICLES IN KENYA

In 2022, Electric Vehicles in Kenya numbered at 475 units. In 2023, their number rose five times to 3,753 units, according to the National Transport & Safety Authority (NTSA).

It costs KSh17 ($0.13) per unit to charge an electric car compared to KSh27 ($0.21) per unit that domestic users pay. This is owing to the e-mobility tariff introduced by KPLC in 2023.

GOVERNMENT INTERVENTIONS & REGULATIONS IN KENYA

The Kenyan government in 2022 through directives of the Treasury and Finance docket has offered reduced to half import duty exemptions for fully electric vehicles compared to HEVs and ICEs. Fully EVs now enjoy a 10% excise duty rate compared to 20% for other cars including hybrid and fuel-powered vehicles.

In 2024, the government via National Building Code 2024 mandated all new buildings, including those owned by the State and private real estate developers to incorporate EV charging stations within five years. Kenya also created a framework for EV charging and battery swapping infrastructure in September 2023. In early 2024, Kenya drafted its first national E-Mobility policy where special green-colored number plates for EVs were set to be rolled out by the Ministry of Transport to enable upcoming incentives and privileges such as priority parking at cheaper rates. This was the preliminary step towards the implementation of the drafted transport transition strategy which included a draft e-mobility policy. The draft e-mobility policy was the first of its kind in Kenya and seeks to promote e-mobility adoption, local manufacturing of Electric Vehicles (EVs), enhancing infrastructural capacity, and improving technical skills in the e-mobility sector.

The Insurance Regulatory Authority (IRA) is however yet to issue guidelines and regulations that govern insurance products for EVs in Kenya.

INSURANCE OF EVs IN KENYA

AVAILABLE INSURANCE PRODUCTS FOR EVs IN KENYA

Typical EVs insurance policies cover batteries, charging equipment, public liabilities and car breakdowns. EVs may need extra coverage options like coverage for EV chargers, depending on insurer packages or personal preferences. It’s advisable to choose a provider that covers most of these EVs components and many unforeseen events.

Kenyan insurance companies like Pioneer Insurance and Gain Insurance write policies for electric vehicles included with a wide range of coverage options.

Gain Insurance Ltd Insurance Cover for EVs in Kenya

INSURANCE COVER ELIGIBILITY	ScootersMotorbikesBicyclesVansPrivate Motor VehiclesPrivate & Public Buses
REQUIRED DOCUMENTATION	National ID card/Certificate of Incorporation for corporationsCopy of LogbookMotor valuation report for vans, private cars and busesKRA Pin NumberDuly filled proposal form
WHAT IT COVERS	Loss or damage of vehicle, battery and accessories like charging cable.Third party liabilitiesPassenger liabilitiesMedical expense in case of an accidentEntertainment setFlatbed Towing
COVER EXTENSIONS	Private charging stationAutonomous DrivingCyber CoverageLoss of usePolitical Violence & TerrorismPersonal AccidentForced ATM Withdrawal CoverCost of Alternative AccommodationPersonal Effects CoverExcess Protector

Pioneer Insurance Ltd Insurance Cover for EVs in Kenya

RISKS AND LIABILITIES COVERED FOR EVs

Depending on key considerations of EVs owners and insurance players, the risks associated with EVs rank differently in order of importance when compared to ICE cars. Thus, coverage of insurance products ranges in risks and liabilities covered. But the most common ones include:

Battery and battery related issues where batteries for EVs are viewed as the ‘engines’ of the cars and hence any malfunction, theft or damage is a serious enough risk to invest in its insurance;
Roadside help wherein range anxiety, the fear of running out of battery power before reaching a charging station, is a common concern among EV owners. Therefore, insurance coverage options for towing, courtesy cars and charging eases stress of such risk in longer journeys;
Liabilities at/of charging stations is a scenario covered by many insurance companies accounting for accidents that may happen while charging;
Public liabilities of unforeseen proportions like political violence, destructive acts of nature and cases of terrorism are usually addressed just like in conventional car insurance.

CHALLENGES AND CONCERNS OF INSURING EVs

There are stemming concerns from various quarters that electric cars are increasingly becoming expensive to insure. Importantly, insurance for electric cars tends to cost more due to EVs’ higher price tags and specialized parts like lithium-ion batteries. It is generally estimated that electric cars can be particularly expensive to repair, costing around a quarter more to fix on average than a petrol or diesel vehicle.

Electric cars tend to cost more to buy than petrol and diesel cars since the cost of producing electric vehicles (EVs) is higher. This is attributed to the high cost of manufacturing the intricate EVs components and technology and their subsequent specialized repairs. To be specific, batteries represent significant investment and value of the whole vehicle. Therefore, battery damage or degradation occasionally ends up in higher repair costs or even replacement. Consequently, EVs require specialized repair equipment and skilled mechanics who are EV-certified to properly diagnose and satisfactorily repair them. In Kenya, for instance, accessibility of EV repair shops might translate to increased costs of tracking down a reliable mechanic for the insurance company. And these extra charges are passed off to the insurance holder.

And so, insurers assume repair parts or fully replacing the car will cost them more. This consequently pushes EVs insurance premiums up since insurers have to shell out more money to repair or replace your electric car if it gets wrecked or stolen.

Another concern that pushes EVs premiums higher is the unique challenges of safety standards that come with EVs and their infrastructure. EVs, EV charging stations and parking garages necessitate continuous updates of property loss prevention best practices around the EV industry to minimize fire risks and ensure safety of users and environment. Hazard assessments to identify potential fire risks associated with lithium-ion batteries and electrical systems thus pushes EV premiums a notch higher than those of internal combustion vehicles.

However, as EVs become more common as well as their technology gets more efficient and more affordable, insurance covers for EVs will become even with those of internal combustion cars. As underwriters analyzing the EVs risks and costs appreciate fully the different operating environments and industry needs, the cost of EVs insurance will be at par with those for petrol and diesel car models.

E-MOBILITY IN PUBLIC TRANSPORT

FUTURE TRENDS IN EVs

EVOLUTION OF THE INSURANCE INDUSTRY IN E-MOBILITY

It’s a connected revolution. Electric Vehicles (EVs) have given birth to Autonomous Vehicles (AVs) as electric mobility transforms to autonomous mobility. The auto insurance industry is ever ready for both gradual and overall fundamental overhaul given the continuous advances in autonomous-mobility technologies. New and emerging insurance industry players like insurance technology companies, popularly known as ‘insurtech companies’ have more opportunities to raise competition among sector players as well as develop innovative products.

For the longest time, insurance of the automotive industry has been concentrated on individual driver risk but in this age of information and data, technology risks will be assessed more seriously. Claims and processes of repair will evolve as vehicle repairs will become more of a combination of physical repair, equipment calibration and software updates. Insurance providers are integrating telematics and monitoring technology to assess driving behavior and adjust insurance premiums accordingly. Monitoring systems technology will certainly affect insurance rates by bringing the high premiums of EVs down.

And as such when insurance underwriting and claims are bound to change as technology changes within broader mobility ecosystem. To be exact, there has been no consensus on how insurance liability will shift as more EVs come to market with increasingly advanced automation technologies and driver assistance systems. However, it is generally assumed that increased adoption of driver assistance technologies and self-driving vehicles could be a major disruptor of the commercial auto insurance market. While there has yet to be sufficient data gathered to show that autonomous vehicles may be less likely to be in accidents than those steered by human drivers, it could seem intuitive that eliminating live drivers may also remove many of the human causes of accidents, which could lower loss frequency. In Kenya, for example, according to 2023 NTSA data, losing control is one of the main causes of road crashes and together with overtaking improperly, inappropriate speed and misjudging distance/speed make up driver-related factors for road accidents. This means that insurance companies might breathe a sigh of relief, if all goes well with integration of self-driving cars.

Robot taxis, or popularly robo-taxis, are forcing insurance industry players to reconsider safety risks. When the era of smart grids catches up with us, we will have to accept that these smart grid systems are pieces of critical infrastructures with complex communication systems and devices. Optimization may be enhanced for convenience in robo-taxis and autonomous cars for drivers but for insurance companies, security will still be a key consideration. This means cyber attacks via data breaches, unauthorized access and malwares, network outages and GPS mistakes might be a substantial coverage option for many insurance companies. For insurance companies, it remains to be seen how they will adapt their insurance coverage options for robotaxis since they are being hailed as safer than people-driven cars. The technology needed to have driverless vehicles carrying passengers is very much a possibility in our lifetime and the insurance industry needs to get ready to be responsive to the demands that will be placed upon it by this life changing technology.

In conclusion, insurers have lots of gathered data on fossil-fuel cars and human-driven vehicles that have helped them determine the type of products the market needs and determine pricing. But for EVs and autonomous vehicles, insurance companies are yet to have substantial data that could be utilized to craft satisfactory products for their clients. A great way to solve this challenge would be to form relationships with EV manufacturers to embed multiple coverages with the sale of the vehicles. Exploring new coverage options and building relationships early with EV companies will be great for the insurance industry as it will help them assess the safety of electric and autonomous vehicles and better understand the risks involved these technologies. For example, embedding insurance products directly into mobility services, including vehicle sales, ridesharing, car rentals, bike-sharing, and even public transportation systems, offers numerous benefits to consumers and service providers including immediate and comprehensive protection coverage option as part of the service. A good example is Tesla’s integrated insurance coverage or Trov and Waymo. All this technology has saving potential for all parties involved e.g., less loss of life for government, less costly premiums for EV owners and drivers and more profits for EV companies in this age of eco-friendly driving and responsible vehicle use.

EXPLORABLE GAPS AND OPINIONS IN E-MOBILITY

The adoption, or yet to be mass adoption, of EVs presents many, diverse opportunities and challenges for developing sustainability within the transportation sector across the world.

NOTABLE PERSONALITIES IN E-MOBILITY

Elon Musk is an eccentric investor in technologies that have a multiplier effect. His electric car company, Tesla is a leading manufacturer of EVs and is set to introduce self-driving robotaxis dubbed Robocab which are self-driving to the mass market. Tesla’s rapid market penetration and trend-setting approach to the way EVs are built and sold is starting to translate to consumer buying habits across the world. Elon is pushing the limits and boundaries of travel and transportation in the 21^st century by tapping into data algorithms, satellite communications and efficient transport. All this seems like a carefully thought-out plan of using his companies which are X, Starlink, Tesla, HyperLoop and SpaceX to revolutionize how people travel.

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*Adoption of E-Mobility is anticipated to increase country’s energy demand, especially during off-peak periods.

*Full electrification of two/three-wheelers is within reach but requires more policy support.

*Its about having confidence for the long haul…by warranty guaranteed batteries.

Empowered for low cog for responsive and agile drive of tow besides low towing.

*Benchmarking against Western markets esp in EV Market…for instance EV manufacturers are encouraging uptake via different strategies and policy measures e.g Tesla are providing insurance covers for their EVs as a stand-alone product within their ecosystem while GM Motors are collaborating and investing in expanded charging networks via installation of fast chargers across America.

*Next-generation vehicles more focused on security, convenience and cost-effectiveness.

*Data is such a big impediment for African governments to encourage and stimulate local and international responses for capital investment from development banks and financial institutions to invest into building electric charging infrastructure. The need for data should be prioritized in Kenyan and Africa market by insurance via encouraging cashless payments and mobile apps from whose aggregated data can be used to inform, track and understand user behaviour of motorists and pedestrians. Also, data can be utilized to demonstrate EV market size and opportunities for electricity companies, EV manufacturers and other firms in the EV sector like renting companies.

*E-Mobility aims to offer safer, faster and more frequent service to travellers since it is more easy and less costly to install brighter lights, security cameras and emergency shops within the emerging E-Mobility infrastructure.

*Ways to develop technical, policy and financing solutions to scale up electric mobility

*In Kenyan cities, specifically Nairobi and other metropolitan centres, the bus rapid transit (BRT) could pave the way for even more carbon and economic savings.

*Making an economic case for adoption of EVs and E-Mobility is easy especially for the public where maximum benefits for the maximum number of people takes precedence over everything. Ranging from improved public health due to better air quality, to less urban traffic congestion because of new technologies like autonomous driving, to a decrease in dependence on expensive imported fossil fuels.

*Cost-effective alternatives to ICEs

*What if I told you that EVs are just as old as ICE vehicles? That’s quite true. As this technology of EVs was conceived in the 1890s when its energy predecessor was steam and its competitor was fossil-fuel.

*On efficiency: A quick look at electricity access and affordability in one’s locality will help to inform more on the efficacy and efficiency of acquiring an EV.

Insurance of Electric Vehicles in Kenya