Electric motorcycles hit a bumpy road
Insuring electric motorcycles could be becoming a problem
Lucy England
Although the road to electric travel is paved with good intentions, could it, in some cases, be an accident waiting to happen? The word on the street is that there are some issues in getting insurance for electric motorcycles.
Thatcham Research and Automotive Risk issued a report about this in the summer, funded by the government's innovation agency (Innovate UK) which details the differences between the EV and ICE vehicle insurance claim processes. The problem seems to be that insurance claims for electric vehicles are costing 25.5 percent more than their ICE equivalents, and electric machines can take 14 percent longer to repair. Another factor can be that accidents on the road can be catastrophic for EVs, particularly as the skills required for repairing them are still developing.
A decline in the sales of electric motorcycles since 2022 has become apparent in Motorcycle Industry Association figures published recently.
ICE motorcycle figures published for 2023, indicated a decrease of 9.9 percent compared to December 2022, while Electric motorcycle registrations reduced by 35.7 from 2022 to 2023. Sales have declined in both categories, since the same month last year, but electric machines appear to have declined more, which begs the question why?
One challenge faced by electric motorcycles is due to their HV batteries. The current cost of a replacement HV battery is very variable, and can be astronomical according to the report, which obviously increases the risk of total loss or write offs.
EV batteries are still currently in development and, although they are developing rapidly and increasing their range and capacity all the time, they are certainly not a cheap option.
There isn't a huge, readily-available supply of batteries either, as there are only a limited number of companies that make these batteries. In the second half of 2020, 6 companies produced 85% of the lithium-ion batteries used in electric cars. Limited supply, high demand and expensive mining and manufacturing costs make EV batteries expensive to buy. As manufacturers don't want to make a loss on their vehicles, this cost is passed on to the customer.
The research modelling showed that during 2022, 9,400 vehicles were potentially involved in accidents which necessitated battery replacement in the repair, so it could turn out to be a costly business. Unless something changes it looks as though the cost of claims will continue to rise, as the estimated number of accidents like this is heading for around 260,000 by 2035.
There are also logistical problems, as there are new Government concerns about damaged EVs posing a potential fire risk. They want any machines being stored ready for repairs, to be in an outside quarantine area which is 15 metres from anything else, in case of fire. This in itself is problematical, as a space big enough to store 100 internal combustion engine machines would only be suitable for two Electric ones - clearly a reduction in repair capacity. The extra costs incurred by this quarantine looks likely to add an approximate £60 (as a minimum) to the cost of every single claim. If there is nowhere to store things nearby, then the cost of transporting the bike to a safe storage area would also have to be added to the repair cost - all making it a potentially very expensive proposition. Thrown into the mix is the fact that EVs are generally heavier and harder to recover at the roadside than traditional motorcycles or cars. Many electric motorcycles are deemed irreparable, due to the excessive cost of repair and part replacement and the lack of suitable mechanics who know how to fix them. Garages and bodyshops area also reluctant to make a considerable investment in the necessary equipment to make the repairs needed when an EV is in a accident . Not a good state of affairs for the EV industry.
Because of the cost concerns it is becoming increasingly hard to find Insurers willing to take the risk of insuring electric machines like motorcycles - a bit of a spanner in the electric works. Basically there is a dearth of technical solutions to these problems at the moment, and some need to be found, and the costs reduced post haste, in order for the electric vehicle industry to continue to take off.
The Report has highlighted a lot of issues in the burgeoning Electric vehicle industry - excessive cost being one of them. It suggests optimising the supply of new, recovered and refurbished batteries to help with this.
But necessity is the mother of invention, so someone will find the solutions sooner or later. The government and the industry are working together on these issues. They might need to get their skates on as some petrol stations are ripping out some of their petrol pumps and replacing them with electric charging points.
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