Bright Spark

Bright Spark

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Buying an electric car can bring quite a few changes to the life of any household. Visits to filling stations are replaced by plugging in overnight at home and there are financial changes too. A bigger electricity bill, but no more wallet-emptying petrol or diesel fill-ups is the main one, and there are significant differences in servicing costs and taxation as well.

 

But the switch to electric cars will send plenty of ripples out into the wider economy as well. First, a small example of how the insurance industry is having to adapt to the arrival of electric cars. LV is now offering insurance policies that cover EV-specific areas such as charging cables, wall boxes and adapters, as well as the car’s battery, including leased batteries, against accidental damage, fire and theft. Recovery to the nearest charge point for cars that have run out of juice is also included. Any vehicle provided via the optional car hire cover will be electric or hybrid powered, so LV customers can stay green even while their usual car is being straightened out after a prang.

 

I haven’t looked further into the pros and cons of LV’s policy, but I’m pleased to see electric-specific subjects such as charging issues and leased batteries addressed explicitly, as I’ve always wondered whether these might be grey areas that could throw up unexpected snags under mainstream policies.

 

At the other end of the scale, we are now seeing the first evidence of how electric cars could effect big changes in the electricity supply industry. The green energy company Ovo is about to start what it claims is the first large-scale “vehicle-to-grid” (V2G) trial in which electric cars – or more specifically their batteries – will be integrated into the UK’s electricity supply system to help balance supply and demand. The trial will initially be open to owners of larger-battery versions of the Nissan Leaf, although other models may be included later. Cars will be charged at times when electricity is cheap, and more likely to have been generated from renewables, and will export power back to the grid at times when demand and prices are higher, and generation less clean.

 

Ovo reckons that because the car’s battery charges at a cheap rate, but exports power back to the grid at times when rates are higher, the profit for the customer could be enough to cover the £300 or so annual cost of charging an electric car at home. Customers can set the charging parameters via an app, and the system can be overridden if the driver needs to maintain a full charge for an important journey.

 

The potential cost saving to the customer is obvious, but the advantages for the electricity supply system could also be substantial. Renewables such as wind and solar can be erratic and harnessing electric cars’ batteries to store surplus clean energy that can be drawn down later should make the system a lot cleaner overall.

 

The biggest impact of electrification, though, will probably fall on car manufacturers. Mercedes-Benz’s first electric car, the short-lived electric B-Class, relied quite heavily on technology from Tesla, in which Daimler previously held a minority stake, but the incoming new chief executive Ola Källenius has said that Mercedes-Benz will in future make its own electric motors and other electric vehicle drivetrain components. Keeping these activities in-house will, to some extent, limit job losses within the company, but the extent of disruption is still likely to be huge. It’s not just the overall number of jobs that matters, but the types of jobs as well. How easily, if at all, will employees who have spent their whole working lives designing, developing or making engines, gearboxes and fuel systems for petrol and diesel cars adapt to the very different world of electric motors, batteries and software?

 

The Fraunhofer Institute for Industrial Engineering, based in Daimler’s home town of Stuttgart, estimates that electrification could cause the loss of 90,000 jobs across Europe by 2030. Electric powertrains are far simpler than their diesel and petrol equivalents – an electric motor has far fewer moving parts – and electric cars typically don’t have a gearbox, so there is just less work to be done.

 

So if you decide to buy an electric car, remember that you won’t just be making a few changes yourself – you could be triggering a process of far-reaching change across the whole economy as well.

 

David Wilkins 

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