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Toyota to Release Electric Vehicle

Possibly even bigger news than the Carmelo Anthony Chicago Bulls trade rumors, Toyota is set to release an electric version of its popular vehicle Prius by 2012, a car positioned to be the least expensive of its kind when it is released. The company may also have another electric vehicle in its lineup by that time. The company has been slower than some others to develop electric cars, but it intends to make up for lost time with increased emphasis on electrics and hybrids. By 2012 the company could have as many as twenty hybrids in its stable of vehicles [1].

Electric Vehicles Becoming More Common

With the news of Toyota's intentions, it is more apparent that electrics are going to continue becoming more common, and that these vehicles are probably going to gain in market share in the year ahead. Other companies like Nissan and GM have gambled heavily on the electric car market, hoping to win new customers and increase profitability through earlier rollouts of their EV models. The Chevrolet Volt and Nissan Leaf are currently positioned to enjoy large market share because there simply are not that many different vehicles in this segment of the market rolling out at production levels yet. But all of that is about to change, with companies like Toyota joining the fray and more plug in hybrids and true EVs hitting the market each model year.

One of the significant points that could enhance the company's efforts to sell an electric vehicle version of their popular Prius is the fact that pricing for the new version would be so close to the regular hybrid's price that buyers wouldn't have to think too hard about it before deciding to buy [1]. This is a significant difference from some of the current cars on the market priced thousands of dollars higher than their gas and hybrid powered counterparts in the same size category.

The electric vehicle is becoming more of a popular area of discussion among automakers because technology has evolved to the point where making such a car practical both in the financial and performance senses of the word is actually possible. GM's Volt can go the first 40 miles totally on battery power, for example. This is a plentiful range for many people in the day to day errands they run in and around town.

Electric Cars and Auto Insurance

As the electric vehicle becomes more ubiquitous in automakers' lineups, its popularity in people's garages will presumably increase. It is clear that this is one of the directions our vehicle design is headed. Getting away from reliance on fossil fuels is driving much of the innovation going into car these days. With car manufacturers spending so much time developing this type of vehicle, it follows that discounts car insurance companies would follow suit and begin to offer special electric vehicle insurance policies.

But this really has not been the case; at least, not so far. There are certain fairly standard hybrid vehicle discounts built into the offerings of the plans of many major carriers, and these discounts usually can be applied to an electric vehicle as well. But there is not yet a clear mandate sketched out as to the way electric vehicle insurance prices should be. The main problem is with a lack of usable data.

Auto insurance companies need to know how these cars are going to perform in order to know how to charge for EV policies. There is no way to get accurate numbers until sales figures go up and more miles are driven in these electric cars. How will they perform in terms of claims losses? They tend to go slower and make shorter trips, but also cost more to replace. It is tough to see how this might shake out just yet.

Any limited production vehicle just entering the market with uncertain prospects is tough to insure. Auto insurers at this time just have to come up with ways to tailor their existing policies to meet the needs of their electric vehicle customers. But as these cars become more common and more drivers start buying them, the need for specific policies tailored for these machines will be much greater. And auto insurance companies will have to be responsive to that need.

Fortunately, the amount of data available will also increase as sales go up and more of this type of vehicle makes its way onto the roads of our country. And insurers will also be able to do more of their own testing to accurately predict safety and other areas of interest that have an impact on the rates they charge. From theft rates to accident claims costs, many different unknowns face the auto insurance industry as it prepares for the widespread introduction of the electric vehicle over the next several years to come.

[1] http://www.reuters.com/article/idUSTRE68C4YP20100914 Retrieved 2010-09-12.

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