SINGAPORE: It’s official.
Singapore has announced ambitious targets for 2040 when we plan to phase out internal combustion engine vehicles, paving the way for greater adoption of electric vehicles (EVs) in the intervening years.
Incentives to prod more drivers towards vehicles operating on cleaner energy have been announced, including extension of the Vehicular Emissions Scheme (VES) to light commercial vehicles, rebates for early adoption and the revision of road taxes for qualifying vehicles.
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FILL IN THE MISSING PIECES
But the plan for these ambitious goals still has some missing pieces.
Deloitte has estimated that the global EV market will reach a tipping point by 2022 when the cost of ownership of an electric vehicle will be on par with its internal combustion engine vehicle cousin, but result in a supply gap of almost 14 million EVs in 2030 - which could thwart Singapore’s efforts.
It is also unclear what the zero combustible engine vehicle target will mean for hybrids, plug-in EVs and motorcycles, though the move to review the road tax for EVs and some hybrids suggest details will be forthcoming.
For now, Budget 2020 has done enough to get us moving forward towards the electrification of the private and public road transport sectors.
Crucially, it has addressed two key consumer adoption concerns identified by Deloitte’s 2018 Global Automotive Consumer Survey that governments should do something about: The need for a dense national charging infrastructure and the cost premium of owning an EV.
Driving range and time to charge, which are primarily a battery technology issue, make up the other top two concerns, currently the pre-occupation of battery suppliers and research institutions all over the world including Singapore.
Deputy Prime Minister and Finance Minister Heng Swee Keat has set forth an audacious goal of creating 28,000 charging points, a significant infrastructure surge from the 1,600. Even over ten years, this is a demanding project timeline.
But the Government cannot do this alone and must work with private sector incumbents like SP Group, BlueSG, Shell-Greenlots, Red Dot Power, in partnership with carpark owners and operators including Wilson, Metro and building owners.
The key now is to distribute these points to ensure high utilisation rates to realise returns on investments. We should also start thinking how we can couple charging infrastructure to solar and battery systems, to reduce the dependency on gas-fuelled electrons.
BENCHMARKING AGAINST THE WORLD’S BELLWETHER IN ELECTRIC VEHICLES
How do Singapore’s goals and plans match up? A look at Norway, the bellwether state for EVs, offer perspective.
Norway, the world’s largest per capita market in electric vehicles, has more than 1,500 public charging points per million population, offers some benchmarks. With over 8,500 charging points, the EV share of sales is around 30 per cent, covering 2,100 sq km of urban Norway.
In comparison, Singapore’s target is about 10 times more charging point density than Norway’s, suggesting range anxiety should be little of a concern.
Norway owes its success to both the carrot and the stick. It offered extremely generous incentives to EV buyers, and financially punished people who continue to use gas or diesel cars.
Norway had put in place generous tax regimes that reduced the cost premium of EVs, necessary at an earlier time when electric vehicles costs were massive and choices of models were limited, compared to today.
With an abundance of clean-and-green electrons from its hydropower, its capital Oslo has even gone one step further with free charging and special vehicle access to certain roads and parking. But such moves may not be sustainable, when market and technology development forces should drive further adoption.
Furthermore, Oslo is also considering a move towards becoming car-free city which means city access and other EV related benefits could be curtailed in its effort to realise a cleaner, greener and more liveable city. Similar forces in Singapore, which have called for the pedestrianisation of Orchard Road and more, may be at play.
FOCUS ON TACKLING CONGESTION TOO
In the larger sustainability fight, while Singapore fixes her eyes on EV adoption, we must press on with tackling the scourge of traffic congestion, which continues to exact a large carbon toll.
Therefore, enhancing and electrifying the public transport system to nudge more consumers to use public transport will have a significant impact on lowering the dependency on private transport and our overall carbon emission footprint.
EV sharing schemes, including BlueSG, has further contributed to these two objectives and could be encouraged.
Finally, where private or commercial vehicle ownership is desired or required, Singapore has put in place pragmatic policies to contain their numbers, including maintaining a high Certificate of Entitlement (COE) price, a target of zero vehicular growth, and the VES, together with new early-adoption incentives to nudge consumers to make cleaner and greener decisions.
OTHER WAYS TO QUICKEN EV ADOPTION
Having said that, to deliver a positive impact to the environment as its preservation is an existential issue for Singapore, the speed and scale of EV penetration are critically important.
While the schemes announced thus far address new purchases, we should also consider encouraging early retirement of petrol vehicles to facilitate switching to EVs.
Achieving a faster speed and scale of adoption could also involve creating a separate COE category just for “green” vehicles, recognising the future may also see fuel cells, hydrogen and biofuels as potential green solutions.
This category could also have extendable five-year COEs to facilitate the adoption of newer green technology.
Commercial fleets should also be targetted more fiercely as swapping out a fleet of taxis or delivery vans will create a quick and huge impact on lowering carbon emissions.
This also means we have to up-skill technical personnel to ensure the reliability of the future electrified transport ecosystem.
GOOD TO HAVE BIG AMBITIONS
The Budget 2020 announcements around EVs is a courageous milestone because it makes the existential crisis arising from climate change real. We are putting money where our mouth is in more areas of sustainability.
The S$5 billion Coastal and Flood Protection Fund committed to adapt to rising sea levels is just a start of putting aside the S$100 billion mentioned in Prime Minister Lee’s National Day Rally in 2019.
To meet out COP21 commitments and our Nationally Declared Contribution targets, Singapore will also need to fund a range of initiatives across the board from buildings to transport to consumer behaviour.
Budget 2020 does just that and with the right motivation – in preserving environmental sustainability and citizens’ liveability.
Having concrete numbers to give our climate action words tangible targets has signalled seriousness and will move the needle, knowing that the Government will track these targets, with detailed plans executed to ensure KPIs are met on time.
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We must also recognise that while more than 20 cities around the world has already echoed bold steps towards electrification of their private and public transport system, this announcement may just be one of many on the global stage.
Yet, it is important for us who live on this island city-state with unique constraints, exacerbated by the few levers we have to pull to contribute towards the global fight against climate change.
Innovation around the charging infrastructure and its intelligent distribution, new business and financing models and an enhanced consumer experience will be key enablers for this successful transition.
Dr Sanjay C Kuttan is Chairman at the Sustainable Infrastructure Committee at Sustainable Energy Association of Singapore.