The future is electric

 BYD is bringing a $40,000 electric car to the US. It promises 250 miles to a charge. If that does not impress you, then consider that GM’s Volt only does 50 miles. Fifty miles? Why do they bother?

 

What is more, it charges 50% in only 10 minutes. How incredible is that! One of the questions that is being asked: Will the Americans get over buying a Chinese made car? Well, they got over American made cars…

 

What is more, Warren Buffet and Charlie Munger is invested in BYD. Not only that, but Charlie says it is the investment in his life that he is most proud of. And that is quite something, given that the two of them are the most famous investors of all time.

 

The future sure seems to be electric!

 

 

Some more detail here.

Gadaffi in your car

There are a large number of technological developments on the horizon that will change the way in which insurance is done. Pay As You Drive car insurance is obviously one of them, and this blog has a number of discussion points on the technology around PAYD.

Some of the other technologies also discussed are electric cars and the infrastructure to “plug-in” a fleet of electric cars. Also on the horizon is “smart cars”. Cars that either drive themselves or take over from you in the case of sensing an accident about to happen. Cars that take an action to avoid an accident, even if it means swerving over a sidewalk and maybe destroying the cars wheels. Take that one step further and you realise that if a bunch of cars are driving near each other, they need to communicate with each other in order to decide what the best collective cause of action would be. From this gets born the concept of a leader car: The car that will decide on behalf of everyone how the group will behave when a danger appears. So what happens if another car is the leader car and decides to send your car over the pavement into a pole, because that is the situation that collectively has the smallest damage. And that in a situation where, if the intervention did not take place, you would not have been involved in the accident. Interesting and even scary stuff. Imagine the insurance implications.

Some cars already have technology that senses if you start getting drowsy. The cars monitor the speed at which you blink your eyes, and if this slows down the car alerts you. Good material for comic strips.

The technology discussed in the article below (original link here), is one that I have not seen before. It intercepts text messages coming to your phone, in order to reduce the distraction of texting while driving. Having texted myself while driving, I know that it is a dangerous practice and it definitely increases the probability of causing an accident. So from a risk mitigation perspective it certainly is attractive. It is however quite creepy.

Some years back Gadaffi (I guess “colourful” is a word that comes to mind in describing this long time de facto “leader” of Libya) visited the African Union which was held in South Africa. People complained that when him and his massive entourage raced around the streets of Johannesburg that their mobile phones will stop working. Gadaffi was driving around with jammers so that people in his vicinity would not be able to use their phones. The technology below is like having your own little Gadaffi in your car. And you are safer for it!

 

Block That Text

By Pat Speer August 26, 2009

Getting people to stop endangering themselves and others because they are texting while driving may not be possible; so stakeholders are looking at technology that blocks cell phones from displaying text messages in the first place.

The technology developers face an uphill battle, however, as texting has grown in popularity at blinding rates.

In 2005, research from the Insurance Institute for Highway Safety, Arlington, Va., found that drivers using cell phones were four times more likely to get in a crash serious enough to injure themselves. Since then, that number has seen explosive growth, as drivers use Bluetooth and other technologies to hold cell phone conversations while driving. But talking is just part of the distraction, say experts.

Drivers who use cell phones to send and read text messages, face even greater danger.

According to CTIA, an industry trade organization that tracks wireless technology, the number of monthly text messages grew to 110.4 billion in December 2008, up from 9.8 billion in 2005. Because “texting” is especially popular among teens, they represent the highest risk behind the wheel. This distraction, say experts, represents the perfect storm for personal lines property/casualty insurers.

Nationwide Mutual Insurance Co.’s second annual Driving While Distracted (DWD) study, released in October 2008, shows nearly half of Americans (48%) considered cell phones to be the most dangerous distraction while driving. More than 40% say they have been hit, or almost hit, by another driver who was talking on a cell phone.

Some states recognize this. In fact, 17 states and the District of Columbia have banned texting while driving, while 10 other states plan to pass laws this year, according to the Governors Highway Safety Association. Fines and penalties vary from state to state.

And although federal laws may be ideal, regulators say this would be difficult to enforce.

The answer may be an “if you can’t beat ‘em, stop ‘em temporarily” approach, as technology solution providers gear up to produce technologies that would make safety the priority.

Much of this technology uses global position system (GPS) technology to block texts from being sent or received while the owner is driving.

In particular, Aegis Mobility Inc., Vancouver, is developing an application that uses a phone's GPS to detect when it is moving at driving speed to intercept incoming calls and texts. Called DriveAssist, the software also blocks outgoing messages, though the owner can override it to make emergency calls. The vendor says the software should be available next year, and Nationwide will be one of the first to offer a premium discount to policyholders to employ it.

Other technologies in development include voice messaging, which creates an audio message from a text message that can be played with the touch of a key. Analysts say insurers are looking at these technologies as a viable way to improve safety and reduce claims.

 

Brand new Chief Operating Officer

I am delighted to announce that Clive Mendes joined Real Insurance as our brand new Chief Operating Officer. Clive and his family (Astrid his wife, and his twin baby daughters Fabian and Francesca) moved all the way from Berlin to join our team.

Clive is an international insurance veteran and former CEO of Royal Insurance’s  Italian operation and Group Strategy Director of Royal & Sun Alliance.

I am very please that we found someone of Clive’s experience and calibre. So successful was Clive’s role in setting up the Royal Insurance operation in Italy that the Italian super brand has been written up as a case study in Marketbusters, a Harvard Business School text book. Clive’s next job is to get Real written up in book!

Some more about Clive: At 23 he was the youngest country manager in the history of the Royal Group when he was appointed to a general manager role in the Bahrain office. He later went on to manage the Lisbon office. Clive says that for the first time in a very long time he is actually conducting insurance in English!

Clive says:  “Real Insurance is not unlike the Royal operation in Italy in its early days. It is growing rapidly, has some very innovative and ground breaking products and for a company its age, it is already quite advanced and sophisticated in its thinking across every department.

“My goal is to help the Real Insurance team become a truly stand-out business to which customers faithfully and happily bond and which is respected by its peers and society in general for world-class performance, operating excellence as well as leadership and innovation across the business.”

Clive studied Languages (Arabic, Spanish and Portuguese) at Glasgow University, Business Administration at Edinburgh University and a BA in Music from the Open University.  He was born in Jamaica and has lived in the UK, Spain, Portugal, Bahrain, Germany and Italy. He speaks seven languages! - Arabic, Spanish, Portuguese, Italian, French, German and English. 

He also composes music.

Clive joins a strong Real Insurance team, which means the best is yet to come!

Changing the way we pay for using the road

A report was released on a Treasury website last week that proposes a conceptual framework for reforming taxes relating to road use and transport. It is a big report (104 pages) dealing with everything from petrol excise tax to Pay As You Drive insurance.

 

Real’s Pay As You Drive car insurance features in the report as the first (and only) insurance product with premiums linked directly to kilometres driven. It is good to be mentioned!

 

Anyway, the report is quite technical, but makes far ranging and courageous recommendations including proper taxing for road use by using telematics.

 

I think the biggest single obstacle for proper charging for road use and a removal of negative externalities is public opinion. I am amazed at the irrationality of some objections, and for others I can understand the change being perceived as unfair for a specific person. The fact is people have been using roads without much direct charge for how much they use the road (they still pay for it through other taxes). So to now accurately charge mean that some people will suddenly pay a lot more (because they use more). And this creates noise. Just think of the noise created when the cross-city tunnel fees change.

 

There is a perception that roads should somehow be free (one commentator said “OUR RIGHT TO UNFETTERED ROAD USE”). A significant amount of education will need to take place before proper charging for road use will have any chance of being implemented.

 

A large part of the emotion is addressed at the public transport system. So people that claim they have to drive because the public transport system is insufficient, claim that to tax them for driving their cars is unfair.

 

So here’s the typical argument: The only house I can afford is far away from the city, where there is no public transport. So I have to drive. Why should I pay for road use when the rich people who can afford to live in the city or close to the train station don’t have to?

 

Tough question. An answer is that if road use is properly charged for, then property away from the city or not close to public transport will become cheaper (less demand) and visa versa. So the person that made the argument above would have paid a low price for their property. The “rich” people have paid for the benefit of not having to drive through expensive property. The answer of course does not work when you have to change road charges, as the person who already owns the undesirable house will be even worse off, and have to pay for driving to work…

 

An article appeared in the Herald Sun, following the RACV making suggestions similar to the tax report above. To illustrate the emotion, have a look at some of the comments posted on the Herald Sun website:

 

Let's see, I live in the outer suburbs as I cannot afford the inner city house prices. I don't have Public Transport as it is not deemed as a reasonable use of Government funds to send the train lines out everywhere. Local councils have stuck metres at local parking areas that service train stations nearby. Now they want to tax me to drive further to work? Come on who is making these decisions?

Posted by: Stephen of Melbourne 10:18am August 28, 2008

 

This is a ridiculous idea! Watch the cost of everything go up then...for example...as a tradesman -No more free quotations, extra charges on quoted works for transport & handling costs..get the idea. These taxes will no doubt filter into costs of everyday living expenses...haven't we got enough pressures already?

Posted by: EJ of MELB 10:17am August 28, 2008

 

The first thing that should happen if this type of lunacy is adopted is for all people in this country launch a class action with the anti discrimination comission. It's not my fault that I can't afford an appartment in the inner city, it's not my fault that the only place I could buy a house I can afford is 30km from where I work nor is it my fault that I would have to travell further if my employer moves to larger premisis. And for all of you that are now madly tapping away at your keyboards to tell me I should use public transport here are the facts. When I have to start work at 6:00 am (first shift), there is not train or bus that allows me to get into the city for the line change to get to work on time and on the regular occasions when on night shift that I am required to be there after 11pm there is no way for me to get home other than by taxi ($115.00) due to the 3 zones that te taxi crosses, lastly lets not forget that this in an unreasonable (& possibly unconstitutional) impost on the taxpayer based on their usage of infrastructure for which we already pay taxes irrespective if it replaces fuel exise and registration.

Posted by: PaulM of Brisbane 10:08am August 28, 2008

 

What an outrageous invasion of privacy.

Posted by: Ophelia of Victoria 9:54am August 28, 2008

 

What a joke, once again pick on the workers, make it harder forthem to get ahead and give their kids a better life. FIX THE TRANSPORT SYSTEM and your problems will go away!!

Posted by: Joe 9:53am August 28, 2008

 

When will people wake up that personal privacy is the MOST important thing they possess in a democracy. This "idea" is one of the most malicious and scary that I have seen. Please, please DON'T underestimate the value of YOUR privacy. Once they take it away it ain't coming back!! They use all sorts of spurious excuses like congestion, crime and terrorism to try to impose government control. If you actually want to live in such a place, then simply book a ticket to Russia. Average australians are too apathetic or stupid to understand the full import of these attempts to remove personal liberty. WAKE UP!!

Posted by: Jason Thornton of Melbourne 9:46am August 28, 2008

 

Another exercise in the total regulation of private motoring , suggested by the most anti motoring cadre in Australia ..the allegedly pro motoring Automobile clubs , infiltrated and controlled by Left wing greenies to a man .Don¿t join them and don¿t support them .ITS GOING TO ELIMINATE YOU YOUR RIGHT TO UNFETTERED TRAVEL. Allied to carbon taxes you wont be able to move anywhere without Government sanction. Even if you see Aunt Jane some faceless bureaucrat will know you did so twenty years from now as it¿s a permanent record .Fancy that?

Posted by: frankly fed up of melbourne 9:30am August 28, 2008

 

City- centric once again. Presumably consessions would be built in country drivers and even those in outer suburban areas otherwise such a tax would be yet another example of the way beauracrats in this state think Victoria consists only of the city and its suburbs.

Posted by: Robert of Woodend 9:27am August 28, 2008

 

All very well for people who can afford to live near & work in the city. There are a lot of people out here like me who would need to take a bus, two trains & a tram to get to & from work and it would take me two hours each way. As for buying a smaller car - who can afford to buy a new car?? Once again suggestions that are geared to help the better off in the community.

Posted by: Kate of Melton 9:12am August 28, 2008

 

 

This is not going to be easy change to introduce, regardless of how correct it is.

 

History is being made- Telsa is profitable

Tesla makes electric cars. Tesla makes very fast sports cars. It is the same cars.

Tesla is a start-up motor manufacturer. Tesla is profitable. It is the same company.

Tesla is full of paradoxes. It is utterly significant that they are making a profit already on revenue of only $20m. They made new cars from almost scratch. The percentage of the car that is new is over 90%. And it is an electric car that leaves Porche in the dust!

A press release from the Tesla site given below. The most remarkable quote from the press release is: "The highly acclaimed Roadster -- faster than a Porsche and twice as energy efficient as a Toyota Prius – is the only highway-capable electric vehicle for sale in North America or Europe."

The only highway-capable electric car that is faster than a Porsche and twice (yes twice) as energy efficient as a Prius!

I want one.


The press release is below. The original is on this link:
Tesla Motors attains profitability milestone
Electric vehicle manufacturer achieves record deliveries in July and will significantly expand in Europe this quarter.

August 7, 2009

SAN CARLOS, Calif.--(BUSINESS WIRE) —Tesla Motors attained a significant milestone in July when it achieved overall corporate profitability with approximately $1 million of earnings on revenue of $20 million.

Tesla reached overall corporate profitability while continuing to develop the all-electric Model S sedan and opening regional sales and service centers. Profitability arose primarily from improved gross margin on the Roadster 2, the second iteration of Tesla’s award-winning sports car.

Tesla shipped a record 109 vehicles in July and enjoyed a surge in new Roadster purchases. In the third quarter, the privately held company will make significant deliveries to European customers while expanding its presence in several countries.

“We achieved a bottom-line profitability thanks to a tremendous amount of hard work by the Tesla team to improve quality, while simultaneously reducing costs on the Roadster,” said Tesla CEO and Product Architect Elon Musk. “This also shows that there is strong demand for a car that is unique in offering high performance with a clean conscience. Moreover, customers know that in buying the Roadster they are helping fund development of our mass market electric cars.”

The highly acclaimed Roadster -- faster than a Porsche and twice as energy efficient as a Toyota Prius – is the only highway-capable electric vehicle for sale in North America or Europe. It’s the first production EV to travel more than 200 miles per charge and the first US- and EU-certified Lithium-Ion battery electric vehicle. With an estimated range of 244 miles per charge and zero tailpipe emissions, it offers supercar performance with a clean conscience.

The Roadster 2, which Tesla is building and shipping to customers now, features an array of enhancements. Those include a more powerful heating, ventilation and air-conditioning system, more comfortable seats and a more luxurious dashboard and cabin.

Last month Tesla began delivering the Roadster Sport, an even higher performance car that does 0 to 60 mph in 3.7 seconds, compared to 3.9 seconds for the standard Roadster. The Sport includes a more powerful motor, custom-tuned suspension and forged wheels. A customer’s Roadster Sport sprinted the quarter-mile in 12.643 seconds in late July, setting a class record in the National Electric Drag Racing Association.

Financing Now Available

Last month, Tesla announced Roadster financing through Bank of America. Financing means the Roadster can have lower total monthly costs than a gas-guzzling sports car with a similar sticker price. Prospective customers may complete loan documents in Tesla’s showrooms or online.

The Roadster is six times as energy-efficient as comparable sports cars – yet it does not require routine oil changes or exhaust system work. Roadsters have far fewer moving (and breakable) parts than internal combustion engine sports cars, which need replacement such as spark plugs, pistons, hoses, belts and clutches. The Roadster costs roughly $4 to fully recharge – a bargain even when gasoline costs less than $1 per gallon.

Tesla sells cars online and at showrooms in California (Menlo Park and West Los Angeles), New York City, Seattle and London. Tesla is rapidly expanding its network of showrooms this summer with stores in Chicago, South Florida, Washington DC, Toronto, Munich and Monaco.

Tesla has developed an industry-leading mobile service team, including highly skilled technicians who make “house calls” to customers’ homes or offices in every region where Tesla sells cars. Electric vehicles have far fewer moving (and breakable) parts than internal combustion engine vehicles. They qualify for federal and state tax credits, rebates, sales tax exemptions, free parking, commuter-lane passes and other perks.

Tesla, which in June won Department of Energy approval for $465 million in low-interest loans, is deep into the development of the Model S. The all-electric sedan will have a base price of $49,900, roughly half the price of the Roadster. Reducing unit cost on the Roadster is helping Tesla to bring the Model S to market at a vastly lower price point, paving the way to mass-market EVs for mainstream buyers.

In addition to the Model S program, Tesla is jointly developing an electric version of the popular Smart car with Daimler. The first of an initial test fleet of 1,000 electric Smart cars are expected to be on the road in late 2009.

New Pay How You Drive product in the UK

A new PAYD product went live recently. The website is payhowyoudrive.co.uk.

The pricing is based on how you drive as opposed to how far you drive. They are targeting people who struggle to find car insurance otherwise, and younger drivers.

A few comments after having only spent a few minutes on the site:

• The car insurance product incentivizes safe driving behaviour, which is good.
• The driving is scored using a points based system.
• You can lose your car insurance policy, much like losing your license on the Australian demerit point system if you get to 12 points. Not sure how that works legally, but the contract probably has safe driving as an underwriting condition.
• Points drop off after time, again similar to the Australian driving license demerit point system.
• You buy miles in mileage bands, by agreeing to maximum mileage. That means you declare up front how much you’re going to drive, and then get penalty points if you do more than that. I assume you pay more for higher mileage bands. The mileage bands available are 3,000, 5,000, 7,500, 10,000 and 13,000 miles.
• You get penalty points for fast driving, going over your stated mileage band, and driving too much at night (more than 10% of your mileage band).
• Quite amusingly, if you get to 12+ points you have 7 days to “appeal” against your policy being taken away. Would love to see how that fits into the British arbitration system!

What is good about the product:

• It links insurance cost to driving behaviour, which should improve how people drive.
• People can get feedback on the site on their historical behaviour.

What can be better:

• The product is still quite complicated. I am not sure how it can be made simpler, but it is not all that easy to understand.
• The penalty points are for a small set of behaviours only.
• It is not explicitly linked to mileage driven, but rather implicitly through the bands.
• The telemetry device needs to be installed, and collects location data.

All in all, it is good to see another Pay As You Drive product go live, and we wish them well!

Advertising Pay As You Drive

Pay As You Drive is a great car insurance product. And we’re very biased, I know, but it saves serious money on car insurance for people who drive less than average, and fairly so. At Real Insurance we have had hundreds of thousands of people getting car insurance quotes from us over the last year since we launched. Also, if I look at people talking about PAYD on discussion forums, then it is clear that people “get it”. They understand why the product is a fairer way of doing car insurance, and that is why they call us for car insurance quotes.

An interesting challenge that we have had to solve is how do we advertise the product? How do you explain that this is better car insurance for some people, and that they should call us to get a car insurance quote from us? How do you do that in 30 seconds?

Our latest ads use a device of showing one car driving a lot, and another car driving very little (and sitting in the garage for most of the time). The premise being that if you drive less, you have less chance of being in an accident, and therefore your car insurance quote should be less than for traditional car insurance. I think it is pretty effective. It amazes me to see how much our marketing team can get into a 30 second car insurance TV ad. A version of our latest ad is below. Please let us know what you think by commenting below!