By Jake Maxwell Watts
Bloomberg News
Office workers walk beside a road in central Singapore on Jan. 21. The small island-state is ideally suited to electric vehicles, say industry experts, but government incentives to purchase the cars is lacking.
SINGAPORE—Tech-savvy Singapore has a lot going for it as a potential home for the electric vehicle. It has a robust power grid, a warm climate that doesn’t leach battery life the way cold winters do and limited range isn’t much concern in a country just 30 miles wide.
Officials say they’d like to explore the idea. A study to test their viability is set to move into its second phase following a two-and-a-half year trial period that had users praising the vehicles for their convenience.
“There may be potential plans for further trials involving the use of [electronic vehicles] for car-sharing arrangements and commercial vehicle fleets,” Singapore’s Energy Market Authority, which regulates the electricity and natural gas industries, said in an email.
But the reality seems to say otherwise, say people who develop and sell the vehicles.
Bosch Software Innovation
A map of 108 public and private charging stations, including three quick-charge stations, installed by Bosch Software Innovations across Singapore.
For electronic cars to gain market share, Singapore will need to build more charging stations and provide tax rebates and other incentives to reduce costs to buyers, they say. Vehicle registration duties and taxes start at around S$20,000, excluding the cost of the car. A local dealer said the Nissan Leaf would go for S$88,000 (US$68,700)—almost the price of a Mercedes—but that price would likely double once taxes are added.
The problem, say industry players, is that the government has not devised a strategy to promote the use of electric vehicles in an island-state ideally suited to them. And despite stated ambitions to develop testing, policies continue to favor gas-guzzling vehicles.
“What generates revenue in Singapore is oil and gas, but it is also taxes on selling vehicles,” said Tom Lokenvitz, founder of smove, a local startup that offers an electric vehicle rental service in Singapore.
Officials at the Land Transport Authority did not respond to repeated requests for comment.
Due to limited road space on the island-state, the government implements a quota on the number of cars and requires car owners to bid for a limited number of ownership licenses. Consumers must also pay for road taxes, registration fees and usage costs – all in addition to the cost of the vehicle.
Motor vehicle taxes and vehicle quota charges provide the government with just under S$4 billion, or 7.3% of the government’s 2013 revenue, according to estimates on the finance ministry website. Excise duties on petroleum products raked in S$416 million.
Discounts for environmentally-friendly vehicles are available in the form of tax breaks on low emissions. Registration taxes are also lower – but do not differentiate between purely electric and other low-emissions alternatives, leaving electric vehicles among the most expensive options on the market.
Companies involved with the trial program say Singapore’s hesitancy in setting new automotive policies has put it well behind many less well-suited countries like the U.S. in incentivizing electric vehicles.
“I think it’s a missed opportunity,” said David Chau, managing director at Singaporean electric vehicle research company EV World. “I would really like to see the government take strong leadership action and do what is clearly being spearheaded in many other countries already to promote the use of sustainable transport.”
China is aggressively developing an electric vehicle manufacturing base and sees environmentally friendly transport as a way to lower hazardous pollution levels that frequently torment Beijing and other cities. For electric vehicle purchases in the U.S., the federal government will refund US$7,500 of the car’s initial cost. Full electric or plug-in hybrid vehicles still only account for a negligible amount of the market, however.
Despite the lack of incentives in Singapore, industry players say consumer demand is still strong and has enormous potential. Smove currently operates just six vehicles, but has a user base of around 450 customers.
Electric Cars Still Don"t Go the Distance in Singapore
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