ICICI Lombard Unveils Research Report On EV Adoption, Motor Insurance

T Murrali
10 Jun 2024
12:27 PM
2 Min Read

The study also emphasises the importance of early consumer education on EV insurance benefits and intricacies.


ICICI Lombard General Insurance has released a new research report titled ‘Electric Vehicle Adoption and Its Impact on Motor Insurance.’ The report provides insights into how the rise of electric vehicles (EVs) is reshaping the motor insurance landscape. Drawing on data from over 500 EV owners across India’s major metro cities, the report highlights changing consumer behaviours, emerging risks, and new market trends.

The motivations behind switching to EVs are compelling, ranging from reduced emissions to lower fuel costs. The research not only explores these driving factors but also examines the challenges and opportunities they bring to the insurance sector.

EV Sector in FY24

For instance, the EV sales in FY24 saw a significant rise of over 41%, despite facing subsidy cuts and regulatory changes. Total EV registrations exceeded 1.6 million for the fiscal year, a notable increase from last year’s 1.1 million. This growth boosted overall EV penetration in the country to 6.8% in FY24, up from 5.3% in the previous fiscal year. The increase occurred despite the government's decision in June to cut subsidies under the Faster Adoption and Manufacturing of Electric Vehicles (FAME) program to a third of the previous maximum subsidy of INR 66,000 for electric two-wheelers (e2Ws).

In FY24, the electric three-wheeler (e3W) category achieved significant market penetration with a 48.9% share. However, this was slightly lower than the 51.6% recorded in FY23, mainly due to an increase in overall three-wheeler sales.

Passenger cars had the lowest EV penetration among all categories, but their penetration doubled in FY24, rising to 2.3% from 1.3% in FY23. Additionally, the two-wheeler category saw an increase in penetration, reaching 5.4% in FY24 compared to 4.4% in FY23.

Key Takeaways From The Report

The study reveals that 77% of EV users are motivated by reduced emissions, with this figure rising to 81% among younger drivers. Financial prudence also plays a significant role, with 73% of respondents citing lower fuel costs as a key factor in their switch to EVs.

The report identifies several challenges for EV adoption. Battery charging time concerns 61% of EV owners, while 54% worry about limited driving range, and 52% highlight insufficient charging infrastructure. The high initial cost of EVs is a significant hurdle for first-time car buyers, indicating a need for continued innovation and support in the EV sector.

Awareness of EV-specific motor insurance policies is high, with 91% of consumers knowledgeable about them. Car owners are particularly aware, valuing premium cost and claim settlement experience when choosing insurance. Comprehensive coverage features like 24/7 roadside assistance and battery replacement are highly desired.

The study emphasises the importance of early consumer education on EV insurance benefits and intricacies. As ownership tenure increases, so does awareness of essential insurance terms, presenting opportunities for targeted educational initiatives. 

ICICI Lombard is recognised as a top provider of EV insurance, with 90% of its EV insurance customers expressing satisfaction. Over 80% of claimants report a positive experience with the claim settlement process, and 77% commend the expertise of the surveyors.

Sheena Kapoor, Head of Marketing & CSR at ICICI Lombard, commented, 'With India aiming to attain net zero status by 2070, EV mobility will see a definite rise. Studies indicate 70% of all vehicles will be EVs by 2030. We have been observing a mind-set shift from consumerism to minimalism and increased accountability towards environment conservation. At ICICI Lombard, we are proactively addressing these trends by developing innovative insurance solutions tailored to meet the unique needs of EV owners, providing comprehensive solutions covering traditional risks as well as specialized benefits like battery replacement and 24/7 roadside assistance.”

Also Read:

Tata and Mahindra To Have EV Battle With Multiple Model Ranges

Share This Page