BMW April 2022

It’s positive and constructive news that many car manufacturers are transferring their production to making ventilators during the coronavirus outbreak, but beyond the headlines the basic economic overview for the automotive market is less optimistic.

However, for electric vehicles the outlook might be more supercharged, and there are three powerful reasons why the EV market may well experience a boost in the wake of the virus and lockdown and now after the announcement that after 2030 there are to be no petrol or diesel vehicles in places in Europe and the US.

The first point is that drivers may want to invest in electric vehicles because diesel and petrol forecourts will be perceived as unhygienic. Customers have to hold the pump nozzle the previous person has used; touch the screen or enter the shop to pay – and petrol pumps have been reported as one of the most common transmission sites for virus cells to transfer. With electricity you can fuel up at your own home. We may all want to return to normal practises but a greater awareness on how infections are transmitted is likely to leave some significant social behaviour changes.

Secondly, consumers may want to adopt lifestyle changes that are more sympathetic to the environment and society. Those who can afford to buy cars will want to play a part in making the world a better, greener place. We saw how nature responded to humans in lockdown as pollution levels fell by 50% in New York, for example, because of measures taken to contain the virus.

Transport contributes 23% of global carbon emissions, and driving is by far the largest element of that, contributing 72% of transport carbon emissions. Indeed, Fei Liu, an air quality researcher at NASA’s Goddard Space Flight Centre, describe D levels of nitrogen dioxide over China saying: “This is the first time I have seen such a dramatic drop-off over such a wide area for a specific event.”

Combating counterfeiters

As the world economy recovers, nations around the world will be encouraged to preserve these gains. A report recently published by the Journal of Nature shows that electric vehicles produce less carbon dioxide than petrol cars, while putting to rest any lingering doubts about the environmental credentials of the batteries used in EVs. So, when people start buying again, they will buy with the environment in mind – and that means electric.

And thirdly, drivers who are buying new vehicles will want to buy responsibly. The global lockdown and coronavirus are like nothing we have ever experienced, but what many of us have experienced is recession. At times of recession or crisis, warranties become far more important to both the consumer and the manufacturer.

To the consumer, a long warranty is a sign of quality and reassurance. To the manufacturer it provides a way to demonstrate your belief in the quality of your product. A warranty allows a product to be sold on quality and therefore protects profit margins. Profitably is also protected further downstream, where a warranty allows the manufacturer to offer a range of customer service and support, underwritten by their insurance.

How do we know this is the case? We have been providing damage and breakdown extended warranty and renewable energy insurance for plant and machinery for over 20 years. Through all the fluctuations in the economy and automotive market during that time, we have seen that reliable and consistent protection comes via the warranty.

Industrial standards

Until now it has been difficult to develop warranties on electric vehicles, specifically the battery, because the technology is so new. Traditional lead acid batteries come with data and industrial standards, developed and refined over many years, which inform investment or warranty decisions.

There was a lack of data around electric vehicle batteries which held back investment decisions. There is a significantly higher risk involved when developing a good, long warranty if you don’t know what impacts the product’s performance and longevity. However, we can now gather intelligent data in real time from electric vehicle batteries and then enhance the results with AI learning to describe the current, past and likely future performance of the battery at an individual cell level. Systems like Altelium are at the forefront of this new information, unlocking market potential armed with this data.

Again, we see the warranty as the catalyst of change. A comprehensive warranty at battery level can include service and breakdown cover for the cell in its second life situation as part of a static energy storage system. This extends the revenue stream for the manufacturer or the owner of the storage facility. It also extends significantly any carbon footprint calculations for the car itself because the battery cells will be in operation for so many years. During the great depression of the 1930s, Bernard London famously proposed “Ending the Depression Through Planned Obsolescence” – but the approach now must be completely the opposite. Electric cars should be an exemple of how to energise the automotive market by “ending this instantaneous recession through intelligent planning”.