Page 21 - Insurance Times Octoberr 2022

Insurance regulator IRDAI has come up with a mandate to
incentivize electric car owners and work towards a
sustainable environment. Effective from June 16th, 2019,
Mandatory third-party car insurance for private electric cars
in India has been made 15% lower than that of general
private cars of similar type. Certain state governments have
extended tax incentives on the registration of hybrid and
electric cars in India.

Many leading vehicle manufacturers have launched electric
cars in India. From Mahindra to Tata to Hyundai to MG, the
options are steadily growing. Additionally, there are many
upcoming electric cars in India to watch out for from other
The light mobility segments of 2/3-wheelers and commercial
top brands such as Lexus, Nissan, Porsche, Maruti, Audi,
cars will be leading electric vehicle penetration in India by
Tesla, etc. Currently, the electric car price in India starts
2030. The reach of electric cars in the personal mobility
around Rs 7 lakh and go all the way up to Rs 24 lakh. The
segment will be only 10%-15%. However, electric cars for
most economical one at the moment is the Mahindra
ride-sharing and taxis may see traction of 20%-30%,
electric car e2oPlus, which is priced at Rs 7.46 lakh.
according to a KPMG and CII report titled 'Shifting gears.
'By the end of this decade, the three-wheeler adoption is
Meanwhile, the Hyundai electric car Kona Electric is at the
expected to be around 65%-70%. Electric two-wheelers,
other end of the spectrum, at about Rs 24 lakh. When it
with a plethora of start-ups offering different ranges of
comes to a moderate electric car price in India, you can find
products at an attractive price and ownership models, are
the Tata Electric car Tigor (about Rs 11 lakh) and Tata Nexon
expected to have only 25%-35% penetration.
(around Rs 15 lakh) in the mix. However, as a leading brand
in India, the Maruti electric car WagonR Electric and the
Their price and fuel economy make them commercially more
Futuro-E are among the most awaited models.
viable.
As of now, there is no specialized insurance for e-vehicles,
This development is similar to that in China, where electric
so you have to buy the same insurance as for other petrol
bikes and scooters laid the foundation for growth. Intra-city
or diesel cars. However, this is soon set to change. With the
transport buses are also ripe for EV adoption. These
demand for upcoming electric cars in India on the rise, car
segments are likely to be followed by fleet cabs, and then
insurance providers are developing bespoke insurance
others.
options that primarily cater to these variants.
India is the largest two-wheeler market, with more than
For instance, Tata AIG plans to launch the Auto Secure e
80% of coming from the segment. The penetration of EVs
Vehicle Comprehensive Policy, which is designed for electric
in the four-wheelers segment has remained extremely low
cars, as it aims to cover 'own damage' as well as damage
at ~0.1%.
caused if the electric car battery bursts while charging. It
will also cover the standard third-party liability for damage
to property and death or bodily disability. Movements in Progress:
To address these issues the central ministry proclaimed a
Several gaps in the four-wheeler EV market such as a limited goal to transition from new sales of ICE (Petrol & Diesel)
number of products, high prices, insufficient battery vehicles to 100% plug-in electric vehicles (EV) by 2030. The
promise, low performance and an underdeveloped charging government is also aiming to transmute India into a global
ecosystem are yet to be filled. Given these impediments, hub for electric vehicles manufacturing. In 2019, Faster
the growth of EV four-wheelers is expected to lag behind Adoption and Manufacturing of Hybrid and Electric Vehicles
other segments. Sales are expected to pick up once these (FAME) II scheme was adopted. It is important to note that
gaps are plugged. FAME II policy which is the umbrella policy for India has been

The Insurance Times, October 2022 21