The role of warranties in winning the electric vehicle ‘arms race.’
A recent article in the FT talks of an arms race in the electric vehicle market: Wall Street urges GM and Ford to keep spending in Tesla ‘arms race’
Is the automotive industry, and its insurers, prepared for the additional and not well understood risks associated with all those lithium-ion batteries?
Manufacturers are required to shoulder a huge liability on their balance sheets to account for potential issues including faults, specialist repairs, performance and charging issues, electric fire risk, recalls, and battery life expectancy, to name but a few.
The increasing complexity of supply chains, limited availability of qualified EV engineers and use of new battery tech will inevitably be reflected in increased balance sheet liabilities, requiring larger amounts of reserve capital.
There is a way to remove battery-related liabilities from the Balance Sheet with ‘virtual equity’ in the form of insured battery warranties. These specialist warranties, such as those supplied by Altelium are underpinned by real time battery data which can be integrated across the value chain.
Can anyone hope to win the electric vehicle ‘arms race’ without insuring their battery warranty liabilities?
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Journalist Contacts
Nicky Smith
Head of Corporate Communications
Tel: +44 7771 785228
Email: Nicky.Smith@Altelium.com