2020 will doubtless be regarded as a watershed year commercial vehicle (CV) owners and drivers. The year began with industry experts predicting this would be the year that electric commercial vehicles (eCV) broke through. Various reports have stated that the EV market will reach nearly 27m vehicles by 2030 with the fastest growing sector being eCV – we’ve certainly seen our first requests for electric commercial vehicle insurance quotes and demand is definitely on the rise.
Then COVID-19 struck and lockdown forced everyone from delivery and taxi drivers to fleet owners to take their vehicles off the road. This provided an eerily quiet time which had some unforeseen consequences, not least a rise in the quality of our air which, according to a report by the University of York, saw emissions fall by up to 40%. This unexpected breath of fresh air in-turn placed even more pressure on manufacturers and the government to kill off diesels and push the EV agenda ever harder. Manufacturers were quick to react with the likes of Volvo announcing its next generation of XC40 would be hybrid and electric-only while government pledged in The Budget to provide fresh grants for EVs – including for taxis and vans – as part of a £532 million plan to electrify Britain’s roads.
No sooner had lockdown restrictions been lifted than we saw a surge of people returning to their vehicles. This was in large part fuelled by the dramatic rise in the number of courier drivers that were needed to keep pace with the demand for goods to be delivered. We’ve experienced unprecedented demand for cheap courier insurance as the world and his wife have joined the delivery army. Another reason for the sharp rise in traffic numbers was the fall in the use of public transport. Between reduced services and fears over COVID the use of public transport plunged by around 70% during lockdown and remains 15% lower than normal. So far then 2020 has been quite a year for CV drivers, but the real impact may not be fully felt until 2021 and beyond as the effects of this crisis ripple out.
In this latest blog from Coversure Grantham, Lincolnshire’s leading independent insurance brokers, we’ll look at what may be in store for CV drivers in the next couple of years and look to a future that will be greener, busier and potentially driverless.
Electric Commercial Vehicles: The Revolution Continues
As we noted in our blog last year, electric commercial vehicles have been making inroads into the UK market for some time now. With major manufacturers including Renault, Ford and Vauxhall all creating electric or hybrid versions of their cars and vans and with running costs a fraction of those for diesel versions, it’s little wonder that this sector is set to boom. Traditional barriers to entry such as a lack of charging points and long charging times, limited ranges and high cost of vehicles will be largely overcome in the next year or so – there are already more charging points than filling stations in the UK, for example – and as people demand clean air and home deliveries, so the revolution looks unstoppable.
One thing that could halt EVs in their tracks is the development of hydrogen powered vehicles. These are even more environmentally friendly than EVs and could be even cheaper to run. At present they are mainly in test mode, but their potential – especially for heavier vehicle such as buses and trucks – is undeniable and the government has pledged to make the UK a world leader in hydrogen technology.
Whichever technology wins out, and our money is on a blend of the two, CV drivers can look forward to cheaper and cleaner motoring.
Boom Times for CV Drivers?
If lockdown showed us one thing, its that the UK has fallen head over heels in love with delivery services. Demand for goods to be delivered has never been higher and companies throughout the logistics chain, from giant hauliers like Wincanton through to courier firms like Hermes and retailers such as Tesco have gone on a massive recruitment drive as they struggle to keep up. With more and more people having the freedom to work from home and so not having immediate access to shops and with fear of COVID still in the air, this is one boom that seems unlikely to turn to bust any time soon.
Looking slightly further ahead there’s another development that may play in to CV owners’ hands – especially the hands of couriers – and that’s the death of vehicle ownership. When the President of Lyft, the ride-hailing service, John Zimmer said that private car ownership would be dead within 10 years many in the car and motor fleet industries dismissed his claims. They did so for two reasons. Firstly, it was based on us all using self-driving cars, and secondly, Lyft’s future prospects rather hinge on people abandoning their own vehicles in favour of hail and ride alternatives. Since then, however, other voices have echoed his sentiments. A Business Insider poll of nearly 1,000 motor industry executives revealed that 60% believed 50% of current car owners would lose interest in ownership by 2025.
With more and more people working from home and abandoning the daily commute, and with the average car spending 90% of its time standing idle, so more people are questioning the need to own one. Between taxis and car sharing options like Lyft and Uber, short journeys will be done more cheaply and more easily using commercial vehicles and deliveries will be handled by couriers.
Once the stuff of science fiction, driverless are the next big thing and they are coming sooner than many people think. Trials of driverless trucks began in the UK back in 2017 and the government recently announced plans for more road testing in 2021. While companies like Google’s Waymo, Apple and Dyson as well as more mainstream manufacturers have focused on cars thus far, others – most notably Tesla and Daimler – have designed and built driverless trucks too.
Driverless vehicles offer business owners huge opportunities to cut costs as they don’t have to pay a driver, can have them on the road for longer and, theoretically at least, they will be more efficient and subject to fewer accidents.
From taxis to buses to vans to trucks, driverless vehicles could be the greatest disruptor to the transport network since the invention of the internal combustion engine. Many remain sceptical as to the likelihood of them becoming mainstream over safety fears and the cost to the economy in terms of lost jobs. Others point to the overall trend toward automaton and machine learning and point out the cost savings that businesses could enjoy – something that few will be able to resist as the world becomes ever more competitive. Time will tell, but we wouldn’t at all surprised if that by 2030 even sleepy Grantham didn’t have these vehicles quietly plying their trade.
Commercial Vehicles Owners: Opportunity Knocks?
The way we work, the way we shop and the way we move around has been transformed in the past 9 months. The ramifications of these changes are only beginning to be fully felt and they will change the way we live as the ‘new normal’ becomes just normal. For CV owners and drivers, the next several years will be times of plenty and while the longer-term holds challenges in the shape of automation, for business owners they also present significant opportunities. One thing is certain; the future is coming and its going to be a brave new world…
Like Some CV Insurance Help? Contact Coversure Grantham
We hope this commercial vehicle blog has been of interest. If you would like some independent CV insurance advice that’s tailored to your business’s needs then please get in touch. You can call us free on 0800 308 1020, email Coversure Grantham here or get a no-obligation CV insurance quote.