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Electric vehicle: to conquer Europe, watch Asia!

The strong increase in sales of electrified vehicles in Europe represents a major challenge for manufacturers. As the model ranges expand, the conquest of new customers does not depend exclusively on the vehicles themselves. Even more than the « traditional » markets, electrified vehicles need to be accompanied by a range of services, as Caarea has experienced in Asia, if they are to establish themselves in the long term.

In the midst of the health crisis, the news did not make much noise. Yet it has a lot to say about it. In September 2020, for the first time, there were more registrations of electrified vehicles (electric, hybrid, plug-in) than diesel vehicles in Europe. A development that seemed unlikely just 5 years ago, when diesel dominated the European car market.

This boom is all the more striking as the automobile sector is strongly affected by the crisis. In 2020, sales plumetted all over the world ; however whilst the automobile market as a whole was down 37% in the first half of the year, sales of electrified vehicles were up 57%.

The crisis is no stranger to the phenomenon. There is nothing temporary about it, however: the momentum in favour of electrified vehicles is there and the movement will be lasting. The stakes of market capture are major for the manufacturers, both European and international. In addition to the technical challenges are those of marketing, as well as the need to take into account the new expectations of motorists. To replicate traditional schemes on electrified vehicles would be to ignore the specificities of this market and miss out on its opportunities. The insurers have a central role to play to facilitate its expansion, by accompanying the manufacturers as well as the users.

The leaders of the post-crisis world

Talking of « windfall effects » about the crisis may come as a surprise. However, the crisis has fuelled the European boom in electrified vehicles thanks to “green deals” and government stimulus measures, which notably support the purchase of clean vehicles.

This short-term action is combined with the long-term effect of European regulations. To comply with them, manufacturers have no choice but to reduce their CO2 emissions by electrifying their ranges, with deadlines of 2021, 2025 and then 2030, when the CO2 reduction target of 37.5% could be raised again. The European market is therefore undergoing major changes.

Manufacturers have already launched 143 new electrified models in 2019. They should offer 450 more by 2022. The electrified car will no longer be synonymous with the small city car: the offer is diversifying, winning over all segments.

For the manufacturers, the challenge of the revival is there: to find market opportunities for the vehicles that European legislation requires them to produce. At the present time, 6 groups share 60 % of the world electric market: Tesla, VW, BMW, Renault, Hyundai and BYD. Will motorists’ attraction for clean vehicles be sufficient to absorb their rapidly growing offers?

An indispensable international experience

Conquering the electrified vehicle market means lifting the brakes that are still holding back motorists. In addition to the question of price, there are also questions of cost and maintenance conditions, as well as battery warranty.

These are issues that have already been faced by the players operating on the Asian markets, forerunners in electrified vehicles. In China, the milestone of 2 million “low consumption” vehicles was reached after the Beijing Motor Show last September. An objective to which the establishment of a Tesla mega-factory in Shanghai has largely contributed. In Korea, in addition to the rapid development of electric technologies, the manufacturers are also betting on hydrogen, a technology offering a range of more than 500 km, notably to the benefit of the heaviest and most powerful vehicles (SUVs, saloon cars).

Based on its proven expertise in Europe and Asia, Caarea offers insurance covering hybrid, electric and hydrogen vehicles. The company has accompanied the explosion of the Asian market over the last three years, notably with the leading Korean car manufacturer and leading Chinese insurers. The management of these dedicated products has enabled Caarea to collect data, not only on the actual risks to be covered on electrified vehicles, but also on the real needs of motorists. This experience is essential for understanding the European market today to propose insurance offers that correspond to the reality of customer needs – manufacturers or motorists.

Responding to the strategic challenges of manufacturers

In order for the manufacturers to concentrate on the technological development of electrified vehicles and their marketing, Caarea takes charge of the services around vehicles and ensures their financial protection. An offer notably requested by manufacturers for the protection of the charge capacity of electric batteries. Indeed, the mandatory guarantees tend to only focus on the functionality of the battery, to the detriment of its autonomy.

Alongside manufacturers, Caarea is lifting the brakes on the motorist’s purchase. The company has developed products and services designed to respond to the specific concerns raised by users, with the cost of maintenance and battery performance at the top of the list. Caarea thus covers the loss of battery efficiency over periods of up to 10 years.

Another point of attention for motorists is the cost of using these new technologies. Here again, Caarea provides a solution: a monthly payment for the maintenance of the technologies specific to these vehicles (fuel cell, lithium-ion battery, hydrogen tank, etc.). An offer that brings much value within an Automotive Lifestyle Protection range, combining all the advantages of loyalty products.

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