The electric vehicle revolution has well and truly arrived bringing with it an abundance of new entrants to the automotive manufacturing industry. Many of these names we, the consumer, will not be familiar with, which can be alien to those of us who are used to the more established, trusted car brands. So, how confident are we opting for a new electric car, from a relatively unknown car manufacturer? It’s an interesting question.
EV start-ups have been appearing at pace, with the automotive industry under pressure to ‘go electric’ by 2035 in line with zero-carbon strategies. The UK government announced it would be banning sales of new diesel and petrol cars by 2030, and hybrids by 2035, which is consistent with many European countries (although some, such as Norway, are taking earlier action). Other countries around the world are introducing legislation to address emissions and climate change, so it is only a matter of time.
While legislation is dictating the pace of the EV revolution, public demand is playing its part; based on a desire to reduce carbon emissions and the cost of living which has also driven up fuel prices to record highs. There are of course tax concessions for drivers of BEV and PHEV company cars, and savings to be made on road tax. SMMT data reported that more electric cars were registered in the UK during 2021 than in the previous five years, which paints a clear picture.
Against this landscape, it is safe to say that the end of the internal combustion engine is drawing ever closer, and this is enticing many new names to the automotive industry. No longer is Tesla the new kid on the kid the block!
Some of these new EV brands are offshoots of the big players in the industry, while others are entirely new to automotive manufacturing. Unlike a traditional fossil-fuelled car with an internal combustion engine (ICE) an all-electric vehicle does not have an engine and has less moving mechanical parts. However, power batteries and technology are at the heart of the EV. This makes the task of manufacturing an electric vehicle a very different proposition to manufacturing a petrol, diesel or hybrid car – requiring a different skillset too.
Developing a prototype EV is one small step, but as many are finding out, going into mass production is another challenge. Establishing a manufacturing facility, sourcing parts, assembling vehicles, recruiting suitably qualified labour, and ironing out teething problems are common issues for start-up EV businesses as they endeavour to scale-up production. Global supply problems and chip shortages are, of course, compounding this further. Tesla’s Elon Musk once described this as “production hell” but has obviously overcome this with phenomenal success.
There are many others now on a quest to replicate Tesla’s electric journey with a queue of investors waiting in the wings. EV businesses are quick to list shares on IPOs (with some hefty valuations) to help raise capital based on market predictions for future mobility, especially those centred-on electrification. Venture capitalists and private equity companies have been quick to respond, while associated tech companies are also seizing opportunities for investment at this pivotal time.
The EV manufacturing sector is an industry that is still in its relative infancy; one that requires risks, resilience and considerable investment to compete with legacy brands. There will inevitably be casualties. Shares for some new high profile EV start-ups are already tumbling as they encounter challenges and attempt to compete against the might of the established OEMs. Ford has reported that its EV sales increased 139% based on its Mustang Mach-E and E-Transit. Meanwhile, share prices for EV start-ups such as Rivian, Lucid, Faraday Future and Lordstown have fallen. The traditional names are on a time-driven mission to meet emissions targets with colossal investment being plunged into EV design, development and production. And the clock is ticking.
Of course, any initiative that addresses climate change is a positive step forward in preserving our planet, but with the emergence of so many new names in EV manufacturing, we return to that all-important question of confidence and trust. Some auto-industry reports reveal that consumers still favour purchasing an electric vehicle from an established legacy brand. A deep-dive study of the next generation of electric vehicle buyers conducted by EV Forward™ revealed:
“More than one-third (35%) of survey respondents indicate a preference for purchasing from a well-established automaker, while just under one-quarter (24%) indicate they’d likely look to an EV specialist to purchase their first electric vehicle. A further 41% of the study’s participants are undecided, highlighting the stakes at play for familiar brands and start-ups seeking to capitalize on rising waves of EV interest among consumers.” Source: EVForward™: Electric Vehicle Market Analysis & Insights (escalent.co)
However, it could be suggested that there is also a strong argument for customers to consider specialist EV manufacturers over well-known OEMs. After all, this is their prime focus and specialist area of expertise, arguably giving them a technical advantage. They are certainly inspiring and driving innovation in the electric car sector, raising the stakes for the traditional OEMs, which has to be good for the consumer.
As specialists in electric car insurance, NOVO embraces all innovation in EV manufacture and supports all initiatives that help to accelerate the transition to zero-emission electrification. NOVO was the first provider of specialist electric vehicle insurance to the Official Tesla Owners Club in the UK.
“The adoption of EV for both private and commercial users is really gaining momentum,” says James Allenby, Founder and Managing Director of NOVO Insurance, providing specialist EV insurance and incident management solutions. “The motor insurance industry is also evolving as it is being forced to adapt to the changing needs of customers, as they make the switch to fully electric or hybrid vehicles.”
James adds: “NOVO has long realised the importance of electric vehicles for future mobility, which is why we have invested in a substantial fleet of courtesy electric vehicles allowing us to provide a like-for-like replacement EV if a client’s car is off the road. Having established relationships with specialist EV repairers, as we do at NOVO, is imperative to the level of service we offer. We even have our own car body repair shop. We have observed and evolved our services to meet the growing demand for EV insurance, offering flexible solutions with high levels of personal customer care. We have experienced a record number of enquiries for our electric car insurance so far this year.”
NOVO provides a niche, highly customised service for customers seeking electric car insurance, with a specialism in premium marque EV insurance and incident management solutions.
Please contact NOVO for further information.