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OPINION

Price of electric cars still shocking

EVs may be environmentally friendly, but they're not wallet friendly. When will they be more for the masses, instead of the millionaires?

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Kia's Niro EV can travel 455km on a single charge - as far as some petrol cars can last on a full tank. Charging its battery costs less than S$15, but in Singapore, the car costs S$183,999 with COE - pricier than some larger crossovers.

Singapore

WHAT'S not to love about the Niro EV, a battery-powered car that Cycle & Carriage Kia launched in Singapore last week? It has a 204 horsepower motor for plucky acceleration, and it can travel 455km on a single charge - as far as some petrol cars can last on a full tank.

Charging its battery costs less than S$15 and it has no tailpipe, let alone tailpipe emissions. Some 95 per cent of electricity in Singapore is generated from natural gas, which is the cleanest of fossil fuels, and both the Kia's cabin and boot are spacious, so it is as family-friendly as it is Earth-friendly.

What's not to love is the price: at S$183,999 with Certificate Of Entitlement (COE), the Kia is far more expensive than petrol cars of a similar size. In fact, it's pricier than some larger crossovers.

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Nasty jolt

The Kia is only the latest example of how expensive electric tech currently is. Just compare the price for an electric Niro with another Niro; a petrol-electric hybrid version costs S$122,999 here, which means the price for trading even an advanced hybrid drivetrain for a pure EV setup comes to S$61,000 - enough to give electric car fans a nasty jolt.

It's a similar story with other EVs, so Kia is not the villain here. Singapore's cheapest electric car is the Renault Zoe, which costs S$124,999.

That might sound reasonable, but the Zoe is also one of the smallest and crummiest cars you can buy at that price.

At the other end of the EV market, the Jaguar I-Pace costs S$352,999 and up, making it over S$100,000 more expensive than the F-Pace, a comparable fossil fuel car.

At least the electric I-Pace is devilishly fast, in addition to being futuristic inside and out, so having to pay so much for one is easier to stomach.

EVs are pricey for a simple reason. "If speaking about production costs, it's primarily the batteries," said Andreas Aumann, the vice-president of product management BMW i, eMobility at BMW. They are the one component that makes EVs so expensive."

The Boston Consulting Group estimates that an EV's powertrain (meaning the battery, motor and controller) accounts for half the total vehicle's cost, compared to just 16 per cent for a combustion-engined car's oily bits. The consultancy reckons that lithium-ion battery packs, the kind that power the Kia, Jaguar and all, cost US$195 per kilowatt-hour in 2018.

Given that the Niro EV has 64kWh to draw on (think of that as roughly 800 smartphones' worth of battery capacity), its battery pack could cost S$17,000 by itself.

Many cars cost less than that in their entirety - Cycle & Carriage pays Kia S$11,673 for the most basic version of the Cerato, the brand's smallest sedan here.

While EV technology is inherently expensive, Singapore's vehicle taxes have the effect of magnifying their cost to the user.

Taxing matter

Calculations by The Business Times show that the Niro EV attracts around S$80,000 in excise duty, additional registration fee and goods and services tax, to say nothing of the COE and the cost of the car itself from Kia.

Offsetting some of that is a S$20,000 rebate for the cleanest cars under the Vehicular Emissions Scheme.

That is the maximum rebate amount, but with pricey technology providing such a high taxable amount to begin with, it might be said that EVs give the authorities a chance to taketh far more than they giveth back.

Yet, EVs are not destined to forever be for millionaires, as opposed to the millions who clamour to drive them.

Lithium-ion batteries have fallen in cost rapidly and continue to do so. Estimates vary widely for how quickly battery prices will decline but BloombergNEF, a clean energy research outfit, speculates that lithium-ion packs could cost less than US$100 per kWh by 2024, which would let car makers price their EVs the same as their combustion cars.

On the other hand, JP Morgan predicts that China's domestic car makers could produce compact EVs at the same cost as combustion ones as early as next year.

BMW's Dr Aumann said it is "difficult to predict" when electric cars will reach price parity with fuel-burning ones.

With even experts unable to agree on a timeline, it seems impossible to tell when buyers will be able to choose freely between battery propulsion and fossil fuel power.

As much as environmentalists like to think of petrol and diesel engines as being stuck in the past, for now the electric car is still stuck in the future.