China Unveils 21 Measures to Tackle Rising New Energy Vehicle Insurance Costs and Difficulty

In an effort to alleviate the burden of high insurance premiums and difficulty in securing new energy vehicle coverage, China's Financial Monitor Bureau, the Industry and Informationization Commission, the Ministry of Transport and Commerce have launched a joint initiative comprising 21 measures. These moves aim to tackle issues related to new energy vehicles' high insurance costs and challenges in obtaining coverage.

The "Car Insurance Easy Coverage" platform, which is set to launch on January 25, will provide an additional channel for consumers to acquire insurance policies when they cannot obtain coverage through regular channels. Major insurance companies, including China People's Insurance Company, China Ping An Insurance Company, China Taiping Insurance Company, and others, have been approved for integration into the platform.

To further mitigate the burden of new energy vehicle insurance costs, the financial department has proposed measures to reduce outages (i.e., accidents). The expected outcome is a decrease in outages rates. Based on current data, new vehicles' frequencies of accident are significantly higher than those of traditional fuel-powered autos.

In addition, new regulations aim to promote the sharing of New energy Automobile Vehicle Data across Industry sectors and strengthening supervision, as well as improving insurance services quality. Furthermore, there are plans for many of these initiatives to be implemented in early 2024, including developing a new type of insurance product; "basic + variation", which allows consumers to add more protection options at relatively lower premiums than those offered by traditional comprehensive car insurance policies and reducing New Energy Automobile Maintenance Costs.

The Financial Monitor Bureau also announced a series of new initiatives aimed at reducing maintenance costs for New energy vehicles. The planned 2024 regulations will promote the sharing of New energy automobile data, build up a robust data platform, develop zero-repair insurance tools and enhance public transport services to better meet consumers' demands and alleviate the burden on the New Energy Automobile industry.

In further support of lower New Energy auto maintenance costs, a wide array of cost-curbing initiatives has been outlined by China's Ministry of Industry and Information Technology. These projects include expanding online sales channels for components and promoting collaborative effort between manufacturers and insurance providers with respect to product servicing.

The regulations are designed to bring both safety and efficiency back into practice, allowing consumers and producers alike to lower these costs over time.