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70% UK drivers put off by EV insurance costs

Source: World Skills UK

High insurance costs and a lack of trained mechanics are failing to convince drivers to switch to electric

According to a report published by the Institute for the Motor Industry (IMI), 70% of UK drivers are not willing to make the jump to all-electric vehicles due to high insurance costs. According to a survey conducted in January, costs for insuring an EV in the UK can be up to 50% higher than their conventional counterparts, prompting most drivers to run for the hills.

Insurance costs are significantly higher for two reasons. First, the higher purchase price of EVs bumps up insurance rates significantly. Second, only 1% of mechanics have the necessary qualifications to carry out work on the high-voltage systems of Ultra Low Emission Vehicles (ULEVs). Moreover, most tend to be employed within franchised dealers, limiting consumer choice.

The situation is emulated across Europe, with the long-term economic benefits of lower fuel costs are failing to convince drivers that current costs of up to €10,000 (US$10,600) are worth it.

Range anxiety (more information here), owing to a low amount of charging points was also mentioned by the IMI as a discouraging factor for UK drivers.

What’s it all about?

It’s not all doom and gloom… members of the UK public remain concerned about air pollution, with 40% of those questioned seeing ULEVs as the answer. However, current policies fail to make sure that there are incentives in place to increase EV take-up.

According to IMI CEO Steve Nash, the solution is not rocket science: “Small businesses are uncertain about future demand for work on electrified cars and won’t risk investing in the skills they need without help from the government. This means insurance and servicing costs will stay out of the reach of many drivers and car buyers will still be attracted to diesel cars as the most fuel efficient alternative, keeping them on our roads for a number of decades to come.”

The report could prompt a re-think of the OLEV’s tendency to fund charging infrastructure and electric public transport. A lack of information about EV potential, limited choice of cheaper models, and most importantly current costs are not giving any momentum to the market.

Rolling out policy

As a start, governments could be convinced to incentivise mechanical training programs.

Despite hints from Business secretary Greg Clark that the government will spearhead a drive towards EV manufacturing and research in the UK, new minister John Hayes MP who is in charge of the Modern Transport Bill has stalled discussions over a £30 million (US$37 million) investment in training, 5% of the overall budget.

Uncertainty in the market causing private mechanics to be hesitant about training certainly creates food for thought. Electrans suggests that the IMI remain stubborn in its push for discussions on division of the budget for modern transport which promotes EV take-up in the most efficient way possible.

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