NTI surveys road to zero emissions

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The stakes are high for shifting commercial transport to EVs, with multiple obstacles to surmount – but NTI is ensuring that getting insurance won’t be one of them

LEADING SPECIALIST insurer NTI is at the forefront of pushing towards zero emission commercial transport in Australia. “I’d like to see our customer share of the ZEV [zero emission vehicle] market higher in proportion to the wider market,” says Alisha Hill, NTI’s national product manager for heavy motor – package. “We’re already partnering with manufacturers, repairers, vehicle recovery operators, industry associations and more to ensure that insurance and roadside assistance products are available to support operators if they choose to move to EVs.” Hill estimates that the proportions of both EVs insured by NTI and commercial ZEVs overall versus internal combustion engines (ICEs) currently sit at just 2–3%. Yes, it’s a low base. But there is an emerging consensus among stakeholders in the transport industry that the barriers to wider adoption of ZEVs must be overcome, even if it takes a while. For commercial transport there are a multitude of complex obstacles on the road to net zero by 2050. Trucks consume 23% of all road transport fuel, despite travelling only 8% of the kilometres covered by all road vehicles and comprising 4% of Australia’s entire road vehicle fleet.

The vehicles, vessels and equipment that NTI's customers rely on have become safer, faster and cleaner. The cargoes they carry are now more delicate and time-sensitive than ever before. With over 50 years’ experience in the insurance industry, NTI has always been successful in finding new ways to keep its customers moving, across the heavy vehicle, mobile plant and equipment and marine industries. Its combination of tailored products, experienced people, accredited repair and recovery networks and industry advocacy has seen NTI ranked as Australia’s number one specialist insurer. Yet insurance is just a piece of paper, a promise. It’s not until you really need an insurer that you understand its point of difference – the NTI Difference.

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Number of fast vs regular-speed charging stations

356

“People aren’t going to be able to buy these vehicles, no matter how amazing they become, unless we have the infrastructure built to be able to support them; it’s not a chicken and egg thing”

Alisha Hill, NTI

Barriers to EVs for commercial transport Perhaps the major roadblock now to buying an EV truck is the upfront cost. “At a time when inflation is running very high, interest rates are high … there will be hesitation by businesses to incur that higher expenditure,” says Brooke Caldwell, NTI’s national product manager for heavy motor fleet. Access to a decent selection of EVs suitable for transport is also a challenge. “You have the issue of range anxiety: can the vehicles do the job they need to do? Currently there's not as many ZEV

options available in Australia as there are in other places like Europe or in the USA. Australia has much longer distances to travel by comparison, so a combination of ZEVs is likely needed. EVs and hydrogen would be the likely solution,” says Caldwell. Part of the reason lies in policies around truck specifications that were designed with internal combustion engines in mind; and other legacy regulations. Caldwell points to the weight of EVs as a prime example. “EVs are actually heavier,” she says. “So the longer the distance you need them to operate, the more battery packs are required for the range, meaning there is a reduction in payload that can be carried.” This makes the economics of running an EV transport fleet untenable for many firms. The Australian Trucking Association is among those urging the government to provide a one-tonne concession for electric trucks, to take the battery weight into consideration. Serviceability – both in terms of the network of charging stations and having enough hydrogen-refuelling stations as well as mechanics specialising in electric or gas – and more general infrastructure requirements are also issues. “There are concerns around whether bridges and roads can handle heavier EVs,” says Hill. The existing charging stations also largely cater to passenger-car EVs, with more than 80% of the network offering slower, mainly AC-type chargers. For the larger batteries used on commercial vehicles, the much faster DC chargers are preferable.

Skills shortages are also holding back companies from buying more ZEVs, a problem that occurs with the adoption of almost any new technology. One of the major barriers to switching from steam to diesel trains in Australia was finding enough diesel engineers to maintain the network. An influx of EV engineers will similarly be needed before any wholesale switch in freight transport modes today. It’s clear that the range of obstacles to EV adoption for commercial transport is far beyond the ability of the insurance industry alone to overcome. Government policy is lacking: the

“We need to look at incentivisation. We need to make it a positive experience for customers to look at the ZEV space”

Brooke Caldwell, NTI

Also, ZEV trucks may not remain expensive for too much longer. It is projected that within five to 10 years manufacturing will soon start to achieve better economies of scale as battery costs and performance continue to improve. Caldwell says that currently, commercial transport operators are still warily looking at EV trucks and wondering if they are a practical option or not. “We need to look at incentivisation. We need to make it a positive experience for customers to look at the ZEV space. “Hopefully, [in the next few years] we're a lot further along the ZEV uptake as a country,” she says.

NTI believes that brokers have a larger role to play in the push to zero emissions than they may realise, due to their strong customer focus. “Brokers are the ones that have the closest relationship with customers, so it's fundamental that they get on board really,” says Hill. “It would be good to see them continue to align with the insurance companies like NTI that support this.”

Fast and ultrafast DC

1,791

Regular AC and DC

Source: Electric Vehicle Council State of Electric Vehicles: March 2022 report

Electric vs diesel fuel costs

Source: Australian Trucking Association

$117

Diesel truck

Cost to run 300km

$18

Electric truck

Electric Vehicle Council says the EV trucking policy area is the most behind in terms of government attention, compared to policies for all other vehicle types. “We’re not going to get anywhere with this unless the government leads with infrastructure development,” says Hill. “People aren’t going to be able to buy these vehicles, no matter how amazing they become, unless we have the infrastructure built to be able to support them; it’s not a chicken and egg thing.” Winds of change NTI is doing what it can to support moves towards adopting ZEVs. It is proud to be a foundational signatory to the Insurance Council of Australia's climate change roadmap announced in early November, and it proactively consults with manufacturers on the latest technologies to keep its list of approved designs up to date in terms of insurability. “We seek manufacturers of ZEVs trucks to talk to us, to help improve our understanding of this technology so that when our customers approach us for insurance we can say yes, we will accept this ZEV; we will support this,” says Caldwell.

And considering the early stage of the transition, NTI also makes an outsize effort to reduce the cost of insurance for EVs. Because damage is often slight on a rigid truck, the chances of having to pay out for the full value are low. “Premiums reflect the fact that the losses may never reflect the full value of the truck,” says Hill. “Yes, the insurance will cost more, due to the much higher value, but we're doing as much as we can to make it fairer.” Some of the obstacles for EV trucks may also be less

insurmountable than they seem. Although the capital cost of ZEVs is currently a lot higher than that of their ICE equivalents, trucks using the new technology can travel much further each year and generate significant fuel savings, and servicing costs are reduced.

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