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New US battery bill ‘lazy’ and shows ‘lack of coordination’ says mobility insurance expert

Mobility insurance expert Brandon Schuh questions the logic behind the new lithium-ion battery safety legislation in the US and calls for the micromobility industry to take the lead on developing future standards

On 15 May 2024, the US House of Representatives passed legislation aimed at improving lithium-ion battery safety standards with the bill requiring the Consumer Product Safety Commission (CPSC) to establish new rules for the batteries used to power micromobility devices.

Introduced by Representative Ritchie Torres in March 2023, it came in response to the New York City Fire Department reporting more than 300 injuries and 12 deaths from fires caused by lithium-ion batteries.

The bill’s passing was welcomed by the Mayor of New York City Eric Adams. But Christensen Group insurance firm’s Senior Vice President Brandon Schuh believes that it will not lead to the creation of a fair, effective solution.

“Uniformity in battery standards is a good thing but the way this bill has been pushed through shows a lack of coordination,” Schuh tells Zag Daily.

“Making the CPSC responsible for putting the legislation together is frankly a little lazy and leaves questions about how they are going to create new standards. The CPSC is not the body that should be in charge of this task.”

Instead, Schuh would have favoured the American National Standards Institute (ANSI) or American Society for Testing and Materials (ASTM) to take charge because they can enact more systemic change.

“Battery standards involve business to business risks and the CPSC has no authority over this area.” 

Too much ‘hyperbole’ in battery debate

Over the past few years, Schuh says the “hysteria” around battery fires has driven up costs for micromobility operators. 

This is because landlords that lease warehouse space for operators now take out more extensive premiums than before to protect themselves against potential fire damage.

“This is adding an even greater burden onto operators who are already faced with an expense-filled business model,” he explains.

Through its growing shared mobility practice, Christensen Group has been involved in past insurance claims relating to battery fires, although the majority have been related to a particular manufacturer or importer.

“We have always been able to insure a fleet managed by an operator or a warehouse housing inventory, but in the past we didn’t cover individual scooters or bikes being used by an individual.

“However, we are now creating insurance products that can also insure each individual device through the company that sells or hires it out.”

Schuh believes that some of the language used by the CPSC and the media has been hyperbolic, while Torres recently described “poorly-manufactured” batteries as “hidden ticking time bombs waiting to detonate in American homes”.

“They are obviously not bombs,” Schuh said. “The batteries are a fire risk, but in the same way storing a gas canister in your house is a fire risk.”

Reading the bill, Schuh said it is likely that the new standards will include a requirement for every battery to be Underwriters Laboratories (UL) certified. However, he argues this will not prevent fires if the wiring is faulty.

“Ensuring that every component is UL would be a good thing, but there are more elements still to consider,” Schuh adds.

One of these elements is the quality of infrastructure, or lack thereof, in dense urban areas.

“The issue in New York appears to be an isolated one because we insure millions of micromobility devices and have experienced very few claims. 

“The electrical systems in New York are just as outdated as the lack of standards in the micromobility battery space, dating back to the early 1990s. Bad wiring can cause battery fires and we are not seeing the same number of incidents in suburban or rural areas. Overall, I don’t think it is right for the New York Fire Department to have such influence over federal legislation.”

Bottom up, not top down

Instead of the federal government reacting to the current debate in New York, Schuh wants to see the micromobility industry granted more power to influence nationwide standards.

He believes that the sector as a whole is supportive of new measures, but maintains that the top down approach that has been employed with this bill will create further challenges and fail to address the root issues.

“I am a proponent of developing uniform battery legislation, but I believe it should have been developed on more of a cooperative basis where an association is established rather than a new set of standards being unilaterally mandated by the CPSC,” Schuh argues.

“The experts that are creating the devices need to play a role in developing rules. The CPSC has specific capabilities to enforce regulation in the consumer product space, but the way in which authority has been handed out is just a little lopsided.”

Schuh would also like to see a greater emphasis placed on fire suppression through items such as battery storage lockers.

“Batteries can be stored in them separately overnight, which stops the spread of fires when they occur,” he explains.

“Until there are real changes in battery manufacturing and the quality of batteries, operators should be investing in ways to limit the impact of a potential fire. The most risk comes when a number of batteries are stored together and solutions such as lockers or even sprinklers can massively reduce the chances of a major fire.”