Ask people about the ‘Future of Transport’ and The Jetsons’ flying car or the hoverboard from Back to the Future might spring to mind. As fanciful as they seem now, audiences in the ‘80s would have equally marvelled at the automated vehicle trials and drone delivery services that we see today.
But the Future of Transport isn’t just about flying cars and floating personal mobility devices – we’ve already been living through a huge transformation in how we move around the country. Vehicles are increasingly complex, akin to computers on wheels; more and more people are opting for electric over petrol; and in some streetscapes, micromobility users can be seen alongside pedal cyclists and pedestrians.
However, as in most cases, legislation lags behind innovation. We want to work with the Government to help achieve their target to ban the sale of petrol- and diesel-powered internal combustion engines (ICE) cars and vans by 2030, but the policy details to support such an ambitious pledge are undefined. For micromobility, the lack of regulation has allowed for a proliferation of illegal private e-scooters which pose a safety risk to their riders and other road users.
With that being said, we are encouraged by the Government’s promises to address these issues. Transport Secretary Grant Shapps has announced to the Commons Transport Select Committee that he would be tackling the problem of illegal e-scooters and establishing robust design and construction standards for these devices. We will continue to work with the Department for Transport to develop those standards and jointly resolve the outstanding questions around potential insurance requirements. We would also like to stress that any regulation should ensure that no liabilities unfairly fall onto the Motor Insurers’ Bureau (MIB) and premium-paying motorists without a corresponding insurance requirement or contribution towards the MIB’s liabilities.
The electrification of the UK’s vehicle fleet is distinctly more challenging – one that is exacerbated by many external factors. The war in Ukraine has driven up nickel prices and halted some vehicle production in Eastern Europe, the continuing Covid lockdowns in parts of China have further impeded already-delayed vehicle parts delivery orders, the semiconductor shortage has significantly contributed to sparse car dealer forecourts, and the cost of living crisis has erased the possibility of purchasing an electric vehicle (EV) for many – and the list of reasons go on. Even as we move past some of these issues, the medium term poses several challenges that may require Government legislation.
The first is in vehicle repair. The Institute of the Motor Industry (IMI) has found that there are currently enough TechSafeTM technicians to fulfil the demand that corresponds to the number of electric vehicles on our roads; however, a skills gap could materialise by 2026. Due to the rapidly growing number of battery EVs and plug-in hybrid EVs, the IMI predicts a shortage of 35,700 such technicians by 2030, the year that the Government’s ban on the sale of ICEs will come into effect.
There are concerns that the entire ecosystem of vehicle repair will not be prepared for the changing vehicle fleet, and that the Government has a role to play in the retooling, reskilling, and retraining of technicians to maintain a competitive and independent vehicle repair network. And this is not just in the field of vehicle repair, but the need extends to vehicle recovery specialists and salvage handlers as well.
Secondly, it is in the challenge of battery health assessment, battery repair, and end-of-life practices where Government investment or backing could have a great impact. A standardised battery and cell health monitoring system would provide reassurance to the second-hand EV buyers and make the market more accessible to wider swathes of the public. Further investment into safe battery recycling and refurbishment methods will greatly reduce the cost of repair and extend the usable lifetime of the most expensive component of an EV. On end of life, measures need to be taken to ensure the residual value of battery packs is put back into the value chain, that savings passed on to consumers, and that the negative environmental consequences are minimised.
Overall, we have high hopes that some of these issues will be address by Government in upcoming legislation. That being said, we recognise that legislative priorities mean that it may not be time to address other issues, for example, related to automated vehicles. However, we are regularly engaging with Government around those challenges.
While we might not yet be flying around like The Jetsons or part of a Back to the Future hoverboard chase scene, the insurance industry stands ready to work with the Government to create a more advanced, efficient, safe, green, and inclusive transportation sector.