SINGAPORE: One in three in Southeast Asia are open to purchasing an electric vehicle (EV) as their next car. They’re even ready to pay up to 50 per cent more than the price of a conventional car to own an EV, according to a Frost & Sullivan survey commissioned by Nissan last year.
And yet, demand for EVs is taking off at an uneven pace, even as the region’s concerns around climate change, pollution and congestion have continued to grow.
We asked consumers in Singapore, Thailand, Indonesia, Philippines, Malaysia and Vietnam to tell us what is stopping them from switching to an electric vehicle. The results were striking and challenge all of us to address car buyers’ fears – or risk EV demand not taking off at all.
ARE ELECTRIC VEHICLES BUILT TO GO THE DISTANCE?
“Range anxiety” was consumers’ number one concern, with 98 per cent worried they will run out of power in an EV. This is despite the fact that some EVs can travel more than 250km on a single charge under standard driving conditions — that’s twice around the perimeter of Singapore on a single charge.
In fact, the average annual mileage in Singapore for a private passenger car is a little over 45km per day according to the Land Transport Authority. Even in Malaysia, the average driver travels 66km per day, according to the Malaysian Institute of Road Safety Research.
Regional car buyers shared that infrastructure is also a major concern. 97 per cent said that a lack of public and private infrastructure was a barrier to buying electric cars.
They feared having to travel far away from their homes or offices to charge their EVs — or that it would take too long to charge. Private companies and service providers must take the lead to deal with infrastructural challenges.
Drivers in Singapore can look forward to at least 3,000 charging stations by 2020. In Malaysia, various organisations are working together to increase the number of charging stations nationwide from 400 to over 3,000 by this year. Bangkok has almost 200 charging stations today with the majority built by private companies.
This trend must continue across the region for consumers to be willing to adopt EVs.
But it’s not just about more stations. The stations must be where consumers can use them easily and conveniently. Strategically-located charging points that complement consumer behaviours are critical to allaying consumer fears.
Drivers want to be able to charge their cars while shopping for groceries or at work, where idle time in a carpark means there is a full charge where they return.
CUTTING THE COST FOR CONSUMERS WHO CHOOSE TO GO GREEN
While further down the list of concerns than we might expect, cost was still cited an important barrier to EVs by 93 per cent of the Southeast Asian consumers Frost & Sullivan spoke to.
We see governments around the region implementing policies that make it more affordable for consumers to switch to EVs. Thailand’s Energy Policy and Planning Office is studying further tax deductions for car buyers who purchase EVs.
The Indonesian government is promoting the purchase of environmentally-friendly cars like EVs by introducing larger tax-breaks for buyers. The Philippines’ Tax Reform for Acceleration and Inclusion Law enables buyers to gain tax-exemptions on EV purchases.
Also, while EVs may not be the cheapest to purchase up front, the long-term savings are becoming clearer for car buyers as technology develops — beyond the cost offset from not buying fuel.
A recent study by the Transportation Research Institute at the University of Michigan found that with no need to change oil or car parts like fan belts, air filters and cylinder heads, the cost of maintenance for an EV may be lower than conventional cars.
Complementing efforts by governments, automobile companies, including Nissan, are invested—and must remain invested—in making better cars and more efficient batteries, which will continue to reduce the cost of EVs in the long run.
That’s why we announced recently that by 2022, all Nissan cars sold in Singapore will be electrified vehicles.
REALIZING AN ELECTRIC FUTURE
It will take time for people to adopt a new way of driving — and a new way of thinking about what they drive. This is normal for a new technology. Whether it’s range anxiety, a lack of charging stations, maintenance or costs, consumers’ concerns are a signal of just how transformational EVs are and will be in the years to come.
Governments are adjusting to this new reality by making policy changes that benefit car buyers. Companies are making investments in charging with an eye on the future. Public and private partnerships are educating car buyers.
And yet, it will ultimately be the Southeast Asian consumers — who have said they are willing to purchase EVs — who will be the drivers of a successful pivot to the electrified future of transport in our region.
Yutaka Sanada is Senior Vice President for Nissan in Asia and Oceania.