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Charged up: Singapore's journey to the future of cars begins now
SLIGHTLY over 20 years ago, hybrid cars as we know them today were just entering the market, but 20 years from now, the internal combustion engine (ICE) vehicles we've known for 125 years will be leaving the market for good.
The Singapore government is making a big push for electric vehicles (EV), which, at 1,125 cars on the road as of January 2020, make up fewer than 0.2 per cent of the current car population.
To say it's a bold vision mapped out by Deputy Prime Minister and Finance Minister Heng Swee Keat in his Budget speech on Tuesday is an understatement. After all, electric carmaker Tesla's CEO Elon Musk had famously criticised the Singapore government in 2018 for being "not supportive" of electric vehicles.
But the newly-minted vision is certainly one that has gotten many climate change watchers excited. "This is the first time that EVs have been given so much air-time during a Budget Speech, and we take that as a positive sign that the government is aware of the potential for e-mobility in Singapore," Terence Siew, president of the Electric Vehicle Association of Singapore (EVAS), tells The Business Times.
Dr Sanjay Kuttan, who chairs the sustainable infrastructure committee under the Sustainable Energy Association of Singapore, agrees. He believes the motivations around climate change, decarbonisation and better air quality at this point in time are now providing "the right motivational levers" for EV adoption to take off in Singapore.
EVs have had a slow start in Singapore. In 2015, there was just a grand total of one fully electric car in Singapore. That number has been growing steadily. By end-2019, the EV population had grown to 1,120, double the number as at end-2018.
"The demand for passenger EVs has always been high, but there's only a small market size because EVs are generally perceived as more premium and accessible to owners who live in landed properties or condominiums," Mr Siew says.
For a long time, many hurdles beset the widespread adoption of EVs in Singapore. On the surface, EVs have a higher upfront cost than ICE vehicles, even if the overall cost of ownership is lower. The cheapest EV on the market is a Renault Zoe, which retails above S$120,000.
One reason EVs come with a premium price tag is that the parts cost more to make. A March 2019 report by McKinsey & Company said EVs cost US$12,000 more to produce than comparable ICE vehicles, and original equipment manufacturers struggle to make a profit from the sale of an EV.
But as battery technology improves, carmakers and market watchers like Deloitte estimate that the the EV market is set to reach a tipping point by 2022: the cost of owning an EV will be on par with that of owning an ICE vehicle. This makes the former a realistic, viable option for any car buyer.
In Singapore though, the bigger problem for most consumers is the lack of charging infrastructure in HDB carparks, which contributes to range anxiety.
To tackle these challenges, Mr Heng announced several measures during the Budget to promote the use of EVs.
First, there will be incentives that offer upfront rebates to EV buyers. A Commercial Vehicle Emissions Scheme (CVES) for light goods vehicles is coming on stream, similar to the Vehicular Emissions Scheme (VES) introduced in 2018 for cars and taxis that offered an upfront rebate. Early adopters of fully electric cars and taxis will also get a rebate of up to 45 per cent on the Additional Registration Fee, capped at S$20,000. This will be available for three years starting 2021.
Owners of EVs and some hybrids can also look forward to lower road tax following a revision of the road tax methodology for cars.
The number of charging points will also be expanded from 1,600 currently to 28,000 points by 2030.
And to top that off, Mr Heng said the government will take the lead to progressively use cleaner vehicles, an implication that buses, which are government assets, will also eventually be fully electric.
While much attention has been on private EVs, Mr Siew says the CVES is critical in nudging the industry towards zero-emission vehicles.
"For commercial vehicles, this VES was never available to them, so the dealerships were not incentivised to bring in the EV models.
"For example, only one brand carried an EV van for the past five to six years and that was the Renault Kangoo," Mr Siew says.
Prof Subodh Mhaisalkar, executive director of the Energy Research Institute @ NTU, notes that taxis in Singapore run six times more in kilometres a day than private cars, and he believes converting fleets like taxis, buses and ride-sharing cars to EVs is a "very big needle mover", especially if they also invest in infrastructure.
"That would also increase the number of charging stations across Singapore, and so that will have definitely a multiplier effect on relieving the range anxiety effect on drivers," Prof Subodh says.
As for private EV ownership, observers The Business Times spoke to ahead of the Budget were not initially in support of using taxpayer money to fund incentives for private car buyers as a matter of principle. The concern was that these incentives may end up benefiting already well-to-do car owners seeking a second or even third car.
Such incentives need to be weighed against the social benefit of cleaner air and the cost of climate change, Dr Kuttan says, although he notes that government revenue is also recovered through other tax systems like the Certificate of Entitlement and road tax.
"We must understand that cars are a luxury item, not a necessity, so there's only so much the government can do in terms of giving incentives for ownership," Dr Kuttan says.
Instead, what's more important is the government's commitment to provide the charging infrastructure, Dr Kuttan says. In his experience, infrastructure is the first barrier to EV adoption for most car buyers.
For more chargers to be deployed however, older buildings would also need to be future-proofed and their power rating upgraded, Dr Kuttan says. Meanwhile, reskilling and upskilling for workers are crucial as mechanical engineers and technicians would need to pick up skills in electrical engineering, he adds.
Making the switch
With the right incentives and infrastructure in place, the biggest obstacle left is actually convincing car buyers to make the switch.
Motoring journalist Leow Ju-Len tells BT that some car dealers in Singapore have been very proactive in shifting towards EVs, sometimes even ahead of market demand.
"Cycle & Carriage brought in the Kia Niro EV not because they thought it would sell well, but because they wanted to get a handle on the technology and figure out what servicing and repair needs they would have, and sort of future-proof their operations that way," Mr Leow says.
"Similarly, Eurokars has been pretty bullish on EVs with Porsche, and now with MG. Eurokars brought in the first plug-in hybrids here (the Porsche Panamera S E-Hybrid) and its new aftersales centre at Tanjong Penjuru has special equipment and facilities just for EVs, well ahead of the Porsche Taycan's introduction. They even have a freestanding building just to store lithium battery packs away from the main building, for reasons of fire safety.
"BMW has pushed its plug-in hybrids and i3 pretty hard, but they've been a tough sell. I think the carmakers are more ready than the customers, to be honest," he adds.
Eurokars Group's confidence in the EV market can be seen from its decision to form a new unit - Eurokars EV - to focus on retailing such vehicles for the group. "We see the growing demand and popularity of EVs, and believe that there is immense potential for sustainable mobility in Singapore," Ong Lay Ling, group managing director, Eurokars Group, tells BT.
In October, it announced its distributorship for British car brand MG, and is in the midst of rolling out a series of EV models in Singapore. Apart from MG, a MINI Electric and Porsche Taycan are on schedule for release later this year.
In addition, Porsche Singapore will also be working on providing charging points throughout Singapore, Ms Ong adds.
Cycle & Carriage, which distributes Mercedes-Benz, Mitsubishi and Citroen, among others, says: "We remain supportive of the government's measures as we can all do our part to reduce vehicle emissions to help the environment."
Until the 28,000 chargers come on stream, Mr Leow believes EVs will be "more for the moneyed than the masses".
"That said, there are other relatively easy ways to encourage EV adoption - free parking, the right to use bus lanes and free charging have been used elsewhere. They make people feel extra shiok about driving an EV, and can be easily withdrawn when their objectives have been met," he says.
Switching to an EV is more than just a change of car, it requires a mindset - and behavioural - shift, observers told BT.
Mr Siew drives a plug-in hybrid and relies on public charging since he lives in a Housing Board flat, which does not have its own dedicated charging infrastructure.
"There are some shopping centres with charging stations in Orchard or the one-north area, so sometimes I'll go there for lunch and then I'll park there and charge," he says.
Dr Kuttan, who also drives a plug-in hybrid, shares the same view. "You need to make a conscious effort that if I buy electric, then I need to make changes, I need to plan my route daily," he says.
Mr Siew says it is useful to think of charging an EV like charging a smartphone. "We have a charger at home, we have a charger at the workplace, and then wherever we go, we plug it in as much as we can."
He adds that once people get used to this for cars, they would no longer worry as much about the battery percentage, as there will always be chargers available.
This is especially since the average driving distance of a private car is now less than 50 kilometres a day, statistics from the Land Transport Authority show. Most EVs in the market have a range of about 300 to 400km, Mr Siew says, which means that they only need to charge once or twice a week.
Also, battery efficiency is likely to improve over time as technology advances.
As more cars ditch petrol for electrons, oil refineries are also looking for ways to stay relevant.
ExxonMobil, whose largest refinery is in Singapore, launched a suite of fluids, lubricants and greases for electric vehicles last September "in anticipation of the increasing trend" of EV use.
A spokesperson tells BT: "We have been evaluating our options for our Esso service stations in Singapore, including the possibility of providing electric vehicle charging points."
Shell too has been diversifying its product offerings, which now include electricity, hydrogen and biofuels as well as petrol, diesel and high-quality performance fuel, a Shell media spokesperson tells BT, adding that a low carbon future presents opportunities for the company to deliver cleaner energy solutions.
Last August, Shell began offering electric charging at its petrol stations and the service is now available at 10 outlets, which is 20 per cent of its retail network here.
Meanwhile, we have 20 years to come round to a future of clean (or at the very least, cleaner hybrid) cars. As journalist Mr Leow puts it: "For what it's worth, I think driving an electric car is like being a vegan. You really only did it for your own well-being rather than the planet's or for animals, though you become a sanctimonious bore anyway, but you do wonder why you didn't do it sooner. Meanwhile, your pals laugh behind your back and heap opprobrium on your choice, but would probably be better off being more open minded about it themselves.