One of the most pressing matters for the micromobility industry today is battery safety.
On average, one lithium-ion battery fire occurred every other day in London last year. Across the pond, it’s even worse with 202 fires in New York City so far in 2024.
As the micromobility industry evolves, these stats will only worsen without intervention.
Micromobility America aims to make headway on this by hosting an esteemed lineup on its panel titled ‘Burning Concerns: A Micromobility Battery Safety Roadmap’. The session will diagnose the existing pain points within the micromobility battery landscape from an insurance, legal and engineering perspective.
Zag sits down with panel speakers Brandon Schuh and David Warden ahead of the conference in California to get their pre-panel take on the micromobility battery safety landscape.
A reaction to NYC’s rise in battery fires
Brandon Schuh is Senior Vice President at US broker Christensen Group.
Christensen Group has been insuring e-bikes and e-scooters since before ‘micromobility’ was even a word.
During his ten years in the space, Brandon has seen battery fires increase tenfold to what he describes as a “breaking point” for micromobility in New York City.
“The evidence suggests that most of these fires are coming from micromobility style products,” Brandon tells Zag Daily. “Owners are taking their bikes and scooters up to their apartments or bringing them inside garages with largely underserved electrical grids – especially in New York’s older buildings – which is leading to a lot of fires.”
With nearly 100 mobility clients insured by Christensen Group, Brandon will bring his maturity to the panel to unite manufacturers and operators in addressing battery safety going forward.
“There’s so much importation of cheap manufactured products and a lot of non-American companies importing products directly from overseas with the absence of testing and regulation. It’s a Wild West atmosphere.”
How battery fires impact insurance claims
In the past, Brandon says that many insurance companies that insure the micromobility space have not been contemplating battery fires as their primary risk. This may be because other dangers first come to mind when thinking about how to mitigate risk from micromobility vehicles.
“When you normally think of micromobility, the first risk you think of is bodily injury,” Brandon says.
“That’s by far the biggest risk in terms of uncapped potential verdicts, and everybody’s head firstly goes to the possibility that someone could die or suffer a serious injury. As the industry’s evolved, it hasn’t given enough attention to property damage as a major concern for the losses, but we’re starting to see property damage claims stand-out as a bigger and bigger risk.”
The mobility insurance expert tells Zag that underestimating the potential for losses means that policies have often been sold for far less than they should have been.
“Now we’re in an environment where unfortunately nobody wants to stick their neck out and underwrite a policy that’s going to give them exposure for property damage.”
As opposed to the conventional thinking about a general and products liability policy which often involves the lengthy process of proof and burden, Brandon says a property or fire claim is much more clear cut – making it riskier for the insurer.
“If a fire inspector goes into a property and says that the source of the fire was this battery, then it’s going to be hard to argue that the claim shouldn’t be paid out. So there aren’t many insurers who are willing to write that policy in the first place.
“And the inspector is going directly to the micromobility product which contains the lithium-ion battery because nine times out of 10 times that’s where they’ll find the ignition spot of the fire.”
Brandon says the risk is twofold. One for the manufacturer and one for the landlord. From the product standpoint, it’s risky to insure a micromobility product containing a lithium-ion battery. And from the landlord’s standpoint, Brandon says that the propensity for fire is much higher if battery materials are being stored inside the building.
“Many insurance carriers therefore don’t even try to write the policy because they know that they’re not going to get enough premium in most instances to offset the potential fire, so they’re unable to fund for the loss.”
Addressing battery fire losses
Daniel Warden, an Attorney at Nilan Johnson Lewis who will also be speaking on the panel, says that the current regulatory landscape for micromobility batteries is made up of a mixture of state and local laws, voluntary industry standards, and federal agency regulations.
These are designed to deal with various facets of battery usage from production, to sale and transport, to disposal and recycling.
“This legal framework is evolving quickly and while it may remain in flux in the short term, I expect mandatory standards for battery manufacturers, and micromobility manufacturers whose products contain lithium batteries, to be in place in the next couple of years,” David says.
Brandon believes one of the most important strategies for addressing battery fire losses in the US will be the Consumer Product Safety Commission’s (CPSC) proposal to require UL certification for lithium-ion batteries in micromobility products.
UL certification is a globally recognised mark which indicates that the relevant product has been tested to meet performance standards set by Underwriters Laboratories (UL). For the micromobility industry, UL certification would mean that manufacturers, retailers, importers and distributors would be obliged to comply with a universal safety standard for all lithium-ion battery cells.
This proposal could come into force next year.
“Lithium-ion is the most prevalent battery technology in the micromobility space,” David says. “The regulatory landscape for lithium batteries is quickly changing with the passage of state and local laws requiring compliance with voluntary safety standards and calls for the CPSC to develop standards which battery manufacturers would be required to meet.
“Federal agencies are also charged with making sure batteries are safely transported and disposed of.”
Brandon says this policy measure would be a “gamechanger” for the industry, because extensively testing a battery pack’s cell quality to ensure it meets that standard would reduce the likelihood of a thermal event.
New up and coming battery technologies will also be highlighted on the panel. These include lithium phosphate batteries that possess a different voltage to lithium-ion batteries or, even further in the future, sodium-ion batteries.
“Even though there’s not yet a lot of evidence to say that these new battery technologies would reduce thermal events, the chemistry of the battery is hopefully changing for the better.”
A battery safety projection for 2025
Brandon says the next year “doesn’t look great” from the insurance standpoint.
He says that, though the likelihood of a thermal event on a single battery is low, and the number of battery fires that occur relative to the amount of product in the market is also low, these instances are having a very damaging effect on the insurance space for micromobility.
“When you do hear about battery fires, they create a stigma for all lithium-ion batteries until there’s evidence of correction. It takes a lot of time to change a message, and right now the message for micromobility batteries is to run.”
He anticipates 2025 to be a transitional year for micromobility battery insurance. Even with the assumption of improved battery technology and safety standards, Brandon believes it will still take carefully crafted messaging to ensure that the insurance space progresses in the right way.
David calls for manufacturers of micromobility products to continue tracking legal developments and ensure compliance on all levels.
“Risk mitigation is also key. Manufacturers should carefully vet their suppliers, make sure batteries conform with industry standards and are properly integrated into their products, and confirm battery management systems are appropriate.
“Because of the U.S. Department of Transportation regulations, the transportation of damaged, defective, or recalled batteries can be both challenging and expensive which can make any recall associated with lithium batteries quite costly.”
On costs, Christensen’s view is that the industry is to see further growing pains and consolidation as greater need arises for extensive testing. However, that’s not necessarily a bad thing.
“We’re in an industry that’s been a little Wild West because there’s not been a standards body to dictate it.
“There’s not been many barriers to entry. The industry has gone through this very typical process where you find a popular product, you find a factory to develop it, and then just like that you’ve got a product going to market.
“Well now things are changing. And just like all other kinds of vehicles which needed various iterations, rigorous standards and costly testing processes, the micromobility space is at that exact point today.”
