The global electric vehicles (EV) market is set for huge growth up to 2030, according to GlobalData and Swiss Re, who both have bullish forecasts for the product. Swiss Re anticipates the market will see growth of around 30% a year up to 2030, while GlobalData estimates it will top $400bn by 2034.
GlobalData forecasts that the global EV market will increase by 17% a year to 2034, while the global battery electric vehicle (BEV) market will grow by 27% per year until 2034. The overall market will reach $420.4bn by 2034, up from $51.6bn in 2022. This is slightly more cautious than the 30% annual growth predicted by Swiss Re—though that is up to 2030.
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The sharp rise is associated with both the push to increase the adoption of EVs globally and the cost associated with policies. Swiss Re talks about the rising repair costs and the challenges for insurers to create profitability. The vehicles themselves are also more expensive than traditional cars. Consumers will hope the cars and repairs will reduce in price as they become more mainstream.
Most countries around the world have target dates when the sales of new petrol or diesel cars will no longer be permitted. This is normally between 2030 and 2035. This therefore forces EVs to become more mainstream in the run-up to that and for motor companies to prioritise making and developing them. This is a hugely significant shift in the motor insurance market, and it is inevitable that the product is going to see huge growth as we approach those target dates.
The key for insurers will be to ensure that they are ready for this transition and be regarded as experts in EV insurance before it is too late. It is likely that they will face increasing competition from manufacturers such as Tesla in the run-up. Tesla has already shown intent to create its own policies and go straight to its own customers. Leading motor insurers will need to ensure they are not outmanoeuvred by manufacturers or specialist EV insurers if they are to continue leading the market.
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By GlobalData
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