Insurtech platform ACKO has launched an ‘Extended Battery Warranty’ plan, a comprehensive insurance policy for the batteries of electric vehicles (EVs) in partnership with electric two-wheeler original equipment manufacturers (OEMs) Ola and Ather.
The new policy addresses customer concerns about battery life and performance and provides coverage for the battery life of the EVs up to the fourth or fifth year, along with performance coverage for up to 60,000 kilometres. In addition, the policy also covers EV components.
According to a report by ACKO, which surveyed over 1,000 respondents who either owned or intended to own an EV, 66% respondents assumed that EV batteries lasted between two to five years only, highlighting the need for comprehensive insurance solutions for EVs. The report also found that 70% of the respondents were willing to pay a premium to get EV-specific insurance.
The partnership with OEMs will improve the affordability of EVs as banks will be able to extend the loan duration for vehicles, reducing the EMI instalments, said ACKO in a statement. Comprehensive insurance for EVs can also boost the market for loan providers, which would further encourage adoption.
Founded in 2016 by Varun Dua and Ruchi Deepak, ACKO is a digital insurance policy provider that claims to have one of the biggest market shares in embedded insurance products like mobility and gadget insurance, in partnership with over 50 leading players including Ola, OYO, redBus, Zomato, HDB Financial Services, among others.
ACKO’s foray into the EV insurance space comes almost a month after it acquired digital health platform Parentlane to expand beyond its core insurance offerings. Animesh Das, VP of motor underwriting at ACKO, said, “The Indian EV journey is an aggressive growth story which has propelled the demand for customised protection solutions amongst customers. Our research report found a demand for these solutions from 79% of the respondents.”
EV adoption is on the rise in the country due to the Centre’s FAME II subsidy scheme. As per the government’s latest data, India had a total of 21.7 lakh registered EVs as of March. However, inadequate charging infrastructure and lack of financial facilities like loans and insurance, which are otherwise amply available for conventional internal combustion engine (ICE) vehicles, remain major pain points for EV adopters.
Recently, some major insurers like Bajaj Allianz General and HDFC ERGO have started providing insurance policies for EVs. By providing comprehensive insurance for EVs, ACKO is likely to encourage more EV adoption in the country and support the government’s efforts to promote a cleaner and greener mode of transport.