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Overview of the development of new energy vehicles
In recent years, under the influence of the government's great attention and policy support and other factors, China's new energy vehicles have developed rapidly, from the perspective of development trends, in the future, China's pure electric vehicles and fuel cell vehicles will jointly dominate China's new energy vehicle market:
From 2013 to 2018, China's energy vehicle production and sales increased year by year, according to statistics as of the end of 2019, the number of new energy vehicles in the country reached 3.81 million, accounting for 1.46% of the total number of vehicles, compared with the end of 2018, an increase of 1.2 million, an increase of 46%. Among them, the number of pure electric vehicles is 3.1 million, accounting for 81% of the total number of new energy vehicles. The increase in new energy vehicles has exceeded 1 million for two consecutive years, showing a rapid growth trend.
However, affected by the decline of new energy vehicle subsidies, the sales of new energy vehicles in the second half of 2019 showed a sharp decline, and in 2019, China's new energy vehicle sales were 1.206 million units, down 4% from 2018. In order to support the high-quality development of the new energy vehicle industry, do a good job in the promotion and application of new energy vehicles, and promote the consumption of new energy vehicles, in April 2020, the Ministry of Finance, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, and the Development and Reform Commission jointly issued the "Notice on Improving the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles", which further clarified the time and coverage of the financial subsidy policy for the promotion and application of new energy vehicles in the next two years. Extend the subsidy policy for the purchase of new energy vehicles, which was originally scheduled to expire at the end of 2020, for two years. At the same time, the intensity and rhythm of subsidy decline have also eased, in principle, the subsidy standards for 2020-2022 will be reduced by 10%, 20% and 30% respectively on the basis of the previous year. 1
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Challenges and opportunities in the insurance market
With the rapid development of the new energy vehicle industry, enterprises and consumers are paying increasing attention to the premium pricing and loss determination standards of new energy vehicles. Compared with traditional cars, new energy vehicles have great differences from physical properties to driving principles. Coupled with mileage anxiety, battery safety, charging facilities and other issues, it has indeed brought many problems to consumers and auto insurance practitioners.
How to fully understand the risk characteristics of new energy vehicles and their underwriting, and reasonably quantify the risk differences between new energy vehicles and fuel vehicles, as well as between different new energy models, is a new challenge facing the auto insurance industry. The U.S. auto insurance market has a longer period of experience in pure electric vehicle insurance. Combining the research on physical properties such as pure electric vehicle batteries and motors and the in-depth understanding of the Chinese insurance market, Jingli Lianxun analyzes the historical compensation data samples of about 820,000 pure electric vehicle insurance policies and 2.35 million vehicle year fuel vehicle insurance policies underwritten by the US auto insurance market between 2015 and 2019. The following risk differences between pure electric vehicles and fuel vehicles and different pure electric vehicle models are summarized.
Comparison and consideration of the difference between pure electric vehicles and fuel workshops:
First, in order to meet the longer cruising range, the pure electric vehicle body material uses a large number of light and strong high-strength steel, aluminum alloy material, carbon fiber material to meet the solidity under lightweight. For example, the BMW i3 uses an all-carbon fiber body with an aluminum alloy chassis and non-metallic overlays; tesla has an aluminum alloy. However, high-performance materials and spare parts and maintenance hours are generally more expensive than traditional fuel vehicles, which in turn increases the average cost of insurance claims.
Second, the physical structure and core components of the pure electric vehicle model, such as the unknown risks and damage that may occur in electronic and electronic control equipment such as battery packs and motors in the power system, are quite different from those of traditional fuel vehicles. Coupled with the technical barriers of the power system (battery pack), it is determined that the cost of insurance maintenance is also more likely to be higher than that of fuel vehicles.
Through a sampling analysis of the US auto insurance market data, Lexent lianxun determined that pure electric vehicles are a higher risk. The average compensation for the damage insurance cases of pure electric vehicles is about 30% higher than that of traditional fuel vehicles, and it is mainly reflected in mid-to-high-end models of more than 40,000 US dollars.
Third, pure electric vehicle models include policy subsidies (national and local) new car purchase costs, battery pack life attenuation, residual value and its repair cost, and model residual value cost, etc., are quite different from traditional fuel models, which may lead to higher moral hazard than traditional fuel vehicles.
Fourth, due to the low noise of pure electric vehicles that replace the engine with motors, which is very different from the noise of fuel vehicles that pedestrians are accustomed to every day, it is not easy to attract the attention of pedestrians, so the probability of collision triggering commercial three liability insurance is higher.
Fifth, pure electric vehicles have large geographical differences in performance. Because the battery efficiency is significantly affected by temperature, there are very few pure electric vehicles in northern China, and most of them are distributed in the south. But the rainy climate in the south is also a big factor in challenging battery sealing. In recent years, it is not uncommon for the battery to enter the water due to heavy rain and water and the short circuit to the high temperature.
Sixth, the risks of driving pure electric vehicles and fuel vehicles in different age groups vary significantly. As shown in the chart below, in the US market, compared with fuel vehicles, the risk rate of drivers over 45 years old driving pure electric vehicles is significantly higher; and the main driver group of pure electric vehicles is more concentrated in the age group of 36 to 55 years old. We need to note that in the Chinese market, due to the restrictions on the increase of new fuel vehicles in some regions and a series of incentive policies for pure electric vehicles, the purchase population of pure electric vehicles is younger. We can also see in the following figure that whether driving a pure electric vehicle or a fuel vehicle, the risk rate of young drivers under the age of 35, especially those under the age of 25, is much higher than that of more mature drivers.
Comparison and consideration of differences between pure electric vehicle models:
First, there are many types of batteries for pure electric vehicles, such as: lithium ternary manganese oxide composite batteries, ternary nickel cobalt manganese oxide lithium batteries, ternary lithium batteries, lithium iron phosphate batteries, nickel cobalt manganese oxide lithium batteries, lead-acid batteries, etc. The total capacity range of the unit can range from 10KWh to 435KWh. Domestic cars mostly use lithium iron phosphate batteries with stable performance but ordinary performance (accounting for nearly half of the current market share). Imported electric vehicles represented by Tesla choose high-performance but more active lithium-ion batteries. Jingli Lianxun analysis found that the average capacitance of imported pure electric vehicles is about 1.7 times that of domestic pure electric vehicles, and the mileage is about 1.6 times that of domestic pure electric vehicles. The difference in the relative coefficient of the compensation rate of vehicle damage insurance under the characteristics of these two types of batteries is higher than 10%.
Second, the performance of the motor is also very different. Domestic electric vehicles mostly use permanent magnet synchronous motors with price advantages, but about 65% of imported models use high-power AC asynchronous motors. Through the comparative correlation analysis of the physical data of the full amount of pure electric vehicles and the sampling data of the car insurance, Jingex Lianxun found that the average power of a single AC asynchronous motor is about 4.3 times that of the permanent magnet synchronous motor, while the torque is about 2.4 times. In addition, the motor distribution in the vehicle assembly is divided into front, rear and rear and rear double (4-wheel drive), so the difference in output horsepower/torque between different pure electric vehicles is even greater. The strong power output represents superior acceleration, but it is also prone to accidents. The analysis shows that the relative coefficient of the risk ratio of the single average vehicle damage insurance of pure electric vehicles equipped with AC asynchronous motors exceeds that of the permanent magnet synchronous motor by 15%.
Through the analysis of car insurance data in the United States, there are also large differences in the car loss insurance rate between pure electric vehicles.
Third, the vehicle damage insurance rate of high-priced (average price of $60,000 and above) pure electric vehicles is about 48% higher than that of low-cost cars;
Moreover, in the same price range ($40,000 to $50,000), the damage insurance rate of some models is about 46% higher than that of other models, and the average compensation is also about 43% higher.
summary
Both from the physical characteristics and insurance business results, it is proved that there are significant differences between pure electric vehicles and traditional fuel vehicles. Moreover, the differences between different models of pure electric vehicles can also be quantified by detailed physical data. The research and development of insurance products for pure electric vehicles in China is still in its infancy, and the current rates and liability clauses are aimed at traditional fuel models. Without a large amount of historical data and mature experience to support, Jingli Lianxun suggested that China's auto insurance industry start from two aspects to improve the ability to subdivide the underwriting risks of pure electric vehicles:
1. Collect and standardize a variety of risk characteristics information of domestic and imported pure electric vehicles;
2. Learn from the pure electric vehicle insurance operation data of the international market, build the first version of the risk segmentation model, and use the domestic market operation data for rapid iterative optimization.
Whether it is in the more refined risk pricing for pure electric vehicles, or when innovating exclusive products for pure electric vehicles, the accurate description and subdivision of the unique risk characteristics of pure electric vehicles is the responsibility of each car insurance operator to pure electric vehicle owners and the car insurance industry. Only when auto insurance operators first have a deep understanding and quantification of risks can they promote the industry to form a virtuous circle of better educating the market and improving operational efficiency.