By Amy Barnes ,
Head of Climate and Sustainability Strategy
Today’s session brought together leaders from across the transport sectors to discuss the acceleration of the transition to zero-emission vehicles.
The day started with discussions on green shipping corridors, but the focus was on the electrification of road transport.
The transition for road transport was described as on a tipping point and speakers asserted that the sector needed to galvanize action towards decarbonization.
Electrification will play a big part in decarbonization efforts. With that in mind, today’s key announcement was the declaration from a number of governments (including from emerging markets and developing economies, cities, states, and regional ones), automotive manufacturers, fleet owners, investors, and others, to accelerate the transition to 100% zero emission cars and vans by 2035 in leading markets and 2040 in the rest of the world. Accessibility, affordability, and sustainability in all regions were noted as key success drivers. The declaration also highlighted the opportunities for green jobs and public health benefits from improved air quality.
These commitments to ambitious and stringent targets in support of electric vehicles (EV) will in many cases provide funding that helps reduce the cost of EV, build charging infrastructure, and enable the innovation needed to increase driving range.
Changes to road transport will lead to a new risk landscape. The increased connectivity of EVs means there is a heightened cyber risk — this is all the more acute when EVs are carrying high-value cargo.
As EVs have batteries, there is growing concern with regard to fire — especially when EV fleets are housed in particular locations. Battery fires are very specific in cause (such as thermal runaway) and treatment (the need for rapid cooling and/or separation).
For insurers, a key aspect of this new risk landscape is where liability rests. With batteries, internal and networked computers, charging stations, and so on, a very pertinent challenge for the insurance industry moving forward will be determining where liability begins and ends for each entity involved in the creation and operation of an EV. The discussion on liability, however, is in progress. Specialist insurance for EV charging points, for example, has been developed, and there will continue to be development in this space.
This blog is part of the COP26 series.