Singapore can lead ASEAN in EV adoption

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Due to expensive ownership rules and strict emissions laws

COULD Singapore’s unique car ownership regulations position the city-state as an accelerated frontrunner in EV adoption within the Southeast Asia and wider Asia? While countries like Indonesia and Malaysia see hindered EV growth due to cheap fossil fuels and easy vehicle financing terms, Singapore’s Certificate of Entitlement (COE) system presents a distinct opportunity to fast-track EV adoption.

The COE system, a permit required to own and operate a vehicle in Singapore, is crucial. High COE prices, driven by a bidding system, have long made car ownership exceptionally expensive.

There are over a dozen Tesla Supercharger locations in Singapore. (Photo by author).

A recent survey by commissioned by Singapore’s Automotive Group Cycle & Carriage and published in on carbuyer.com.sg early this year shows that half of the drivers in Singapore want an EV as their next car. The survey also reveals that a substantial portion of Singapore’s ICE vehicle owners (67 percent) aim to sell or trade in their cars by 2025 with half of those surveyed seriously considering switching to EVs or hybrids.

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This shift in preference isn’t merely influenced by environmental concerns. Younger car owners (20-49), higher-income brackets ($9,000+/month), women, and those with multi-car households show a strong inclination towards EVs. The availability of public charging stations is the top concern, followed by battery durability and safety.

As of May 2023, Singapore had 7,961 electric vehicles (EVs) registered, which is 1.2 percent of the country’s total vehicles. This represents a 50.5 percent increase from 2022, when 3,634 EVs were registered. In 2022, EVs made up almost 12 percent of all car sales.

Comparatively, based on the latest data (August 2023) the adoption rate for electric vehicles (EVs) in ASEAN was 0.7 percent in Thailand, 0.3 percent in Malaysia, and 0.1 percent in Indonesia.

This growing interest coincides with rising EV market share in Singapore. Despite slowing new car sales, EVs comprised 13 percent of registrations in 2023, a trend which could increase as expiring government incentives at the end of the year create a sense of urgency for potential EV buyers.

Singapore’s government is a driving force behind this change, targeting a phase-out of new ICE vehicle sales by 2030 and an ambitious plan of 60,000 public charging points across the island by the same year.

What differentiates Singapore is that the high upfront costs of car ownership, influenced by the COE, could narrow the price difference between an ICE vehicle and an EV. Consumers already primed for significant expenditure may be more open to embracing EVs as the cost gap shrinks relative to nations where car ownership is initially cheaper.

However, public perception remains a hurdle. Many still view EVs through a lens of limited awareness, and education efforts will be critical. Additionally, EVs inherently offer simpler mechanics compared to traditional ICE cars, a benefit that must be highlighted in consumer outreach.

Car dealerships in Singapore are taking note, actively expanding EV offerings to align with the shifting market. This indicates a strong belief that the potential EV boom in Singapore will outpace adoption rates in neighboring countries, precisely due to the pre-existing structure of car ownership restrictions.

Singapore’s commitment to a robust charging infrastructure network by 2030 positions it to overcome this significant hurdle faster than its neighbors. The city-state’s compact size and well-developed urban planning further support the feasibility of EV charging infrastructure compared to the geographical spread and logistical hurdles present in many other ASEAN countries.

Singapore’s COE system itself doesn’t guarantee accelerated EV adoption. It can however be used by government to push EV adoption. These unique rules can even allow transportation authorities to technically, allow only electric vehicles on the island nation’s roads.

Government incentives, continued investment in charging infrastructure, and combating public misconceptions about EVs are still necessary. However, the framework of pre-existing expense associated with car ownership provides a unique lever that could be used to push EV adoption beyond what is achievable in countries without similar regulatory structures.

Experts in the Singapore Automobile Association—

Across the ASEAN-6 nations, three major challenges hinder widespread EV adoption: high costs, limited charging infrastructure availability, and an underdeveloped EV supply chain. Singapore stands out as the most EV-ready among the ASEAN-6. This is due to growing consumer awareness and acceptance of EVs, an expanding charging network, increasing EV research and development, and robust government support expressed through both policies and incentives aimed at fostering infrastructure growth. Following Singapore in EV readiness, we find Thailand, Indonesia, Vietnam, Malaysia, and the Philippines, respectively.

“While the ASEAN-6 nations had been slow to adopt EVs, societal concerns over climate change are now driving a rapid shift in policies and consumer attitudes toward EVs. Financial incentives to improve the affordability of EVs have been widely adopted across these markets, accompanied by national programs and policies to improve sustainability and decarbonize the transport and energy infrastructures have helped to encourage consumer sentiments and adoption of EVs,” Susana Utama, EY-Parthenon Partner, Industrial and Value Creation at Ernst & Young Solutions LLP said.

Unlike Singapore, many ASEAN countries maintain relatively low barriers to car ownership. In Indonesia and Malaysia, the affordability of fossil fuels, coupled with accessible financing options, makes owning and operating traditional ICE vehicles attractive. While the upfront cost of an EV might still be higher in these countries, the comparatively low cost of ownership for an ICE vehicle can disincentivize transitioning to electric alternatives, even as environmental concerns grow.

According ASEAN vehicle adoption surveys conducted between 2020-2022, the percentage of consumers that preferred an EV as their next vehicle in Indonesia, Malaysia, the Philippines and Vietnam fell below 5 percent. In Singapore and Thailand, that percentage was higher at 9 and 14 percent, respectively.

Furthermore, developing nations within ASEAN frequently face challenges in developing and maintaining robust electrical infrastructure. This can create uncertainty around the reliability of power grids to support widespread EV charging, especially outside major urban centers. While Singapore grapples with public perception and knowledge gaps around EVs, the issue becomes far more acute in countries where electrical grids themselves could prove unreliable under increased strain.

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