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SINGAPORE: If you ask someone which company is the world’s largest automaker by market value today, you may get the usual answers: Volkswagen, BMW, and Toyota Group.
The answer, according to Bloomberg, is Tesla. Tesla, owned by eccentric Elon Musk, has rewarded its shareholders for their patience – its share price has increased sevenfold in the past year.
READ: Comment: Don’t be too quick to write off Elon Musk
While Tesla could be something of a unicorn in the electric vehicle (EV) market, there are signs that this is an area to watch out for.
Chinese companies are reaping rewards in this area too. The startup Nio’s shares have tripled since its 2018 listing on the New York Stock Exchange.
Two Chinese companies were also listed on sales this year. Li Auto debuted on the Nasdaq in July with an initial public offering (IPO) of US $ 1.1 billion (S $ 1.47 billion) and its shares have grown more than 50 percent since then.
Xpeng made its entry into the United States in late August after raising $ 1.5 billion for its IPO.
READ: China’s EV Startups Compete for Leadership Position
Will investor fervor for EVs pay off or is it a bubble waiting to burst?
BUILDING THE ELECTRIFICATION ECOSYSTEM
Changes in the transportation landscape abroad and at home suggest that this is not a bubble.
Stock photo of cars, motorcycles and freight vehicles on the roads of Singapore. (Photo: Jeremy Long)
Singapore, as a global financial center, has thrown itself into the fray in a big and bold way. We march towards further electrification of our transportation sector by declaring that we will phase out internal combustion engine vehicles by 2040.
That’s most of the cars on the road right now. The goal is to dramatically increase the number of electric vehicles (EVs) from the current 1,120.
READ: MOT May Review 2040 Target for All Vehicles in Singapore to Be Low Emission – Ong Ye Kung
Our public train system, the MRT, is fully electrified, public buses are already on the same path with the recent tender from the Land Transportation Authority (LTA) and the new mega port of Tuas will be highly electrified.
We also anticipate that our port vessel community is on the brink of an electric future with the recent call for commercially ready proposals by the Singapore Maritime and Port Authority and the Maritime Institute of Singapore.
READ: Comment: Singapore’s ports and ships are turning the tide on climate change
In the field of electric vehicles, 28,000 electric vehicle charging infrastructures will be strategically distributed throughout our island.
Right now, GreenLots (Shell), SP Group, Blue SG, and Red Dot Power are on the market to assist car dealers who import hybrid electric and electric vehicles.
Sales are enabled by financial incentives of up to S $ 45,000 that favor the purchase of greener cars under the Vehicle Emissions Scheme (VES) and Early Adoption Incentives (EEAI) from January 2021.
A Hyundai Motor IONIQ electric car is charged at an electric charging station in Seoul, South Korea, on December 11, 2018. (Photo: REUTERS / Kim Hong-Ji)
This exciting changing landscape prompted Hyundai to announce its plans to build electric vehicles in Singapore, thereby creating greater access to electric vehicles and creating jobs for Singaporeans.
BRINGING THE BUBBLE BACK TO EARTH
While this march toward electrification is accelerating, the question remains whether drivers will actually buy electric vehicles, turning investors’ hopes into reality.
A few more things need to happen before consumers start choosing electric vehicles over traditional cars.
READ: Comment: What does it take to make Singapore truly car-lite?
First, we need a dedicated Certificate of Entitlement (COE) category for electric vehicles and plug-in hybrid vehicles. This will help electric vehicle charging infrastructure companies to schedule their infrastructure deployment, and auto dealers to monitor their sales and model availability.
If this revision occurs, then the pulse of transformation can be felt directly from the uptake of EOC in this category.
READ: Comment: Will COVID-19 temper Singapore’s love affair with cars?
Second, charging of electric vehicles must be done without complications. Unlike gas stations that are brilliantly lit with prominent logos and a history of sponsorship, locating electric vehicle charging stations is a completely different experience.
At this time, EV charging infrastructure tends to be “hidden” in building car parks, multi-story car parks, or open-air car parks. If you don’t have the freight provider’s app handy, of course you won’t find it.
Therefore, signage to facilitate routing will make it easier to locate these charging points.
The other problem is that each charging infrastructure provider has its own app, which means you have to open multiple apps to find out where the chargers are in the parking lot, if any.
(Photo: Unsplash / William Hook)
Here, a single integrated platform that allows access to all providers with their own business model still intact will make life easier for the consumer. GovTech could create one as an independent neutral body for business entity applications.
Also, if WAZE or Google Maps can load these sites into their integrated mapping systems, that would be a very welcome feature. With easy access, the high usage of load units will generate more revenue for infrastructure companies, further enabling their expansion plans.
CHANGING THE CAR MARKET
The final piece of the puzzle to turn the electric vehicle hype into real profits is the consumer.
In Singapore, not everyone can afford a car, much less an electric car. But BlueSG has made it possible for Singaporeans to access a fully electric car.
READ: Comment: People love to walk and ride bikes. So why aren’t they ditching their cars more?
In general, car ownership is a considerable investment. If driven by need, design, reliability and scope are key decision factors.
Taxis and private rental vehicles are workhorses in our transportation landscape, traveling nearly 350 km per shift on average. These electric “taxis” vehicles from BYD and Hyundai Kona and Ioniq demonstrate that range anxiety shouldn’t be a problem in Singapore.
If they can handle this, the ordinary driver averaging 40km to 50km per day can be sure that there is sufficient range before a full charge (depending on the model’s battery size), or opportunistic recharges (run time). short charge) which can keep the battery in a high charge state.
READ: In The New Map, author Daniel Yergin addresses energy, climate change, and the slow but steady changes in power relations.
The Nissan Leaf 2, Renault Fluence, BMWi3, Mini and Mitsubishi models are now available in Singapore with different designs, features and prices to appeal to a wide range of consumers.
However, if performance and style are the deciding factors, models from Tesla, BMW, Audi, Porsche, Jaguar, Mercedes and the like will satisfy the senses.
FILE PHOTO: A Tesla car is seen in Los Angeles, California, USA, July 9, 2020. REUTERS / Lucy Nicholson
Furthermore, the carbon credits generated from the EV ecosystem can be traded, as we have done with solar installations, creating more value for the EV operators and the charging infrastructure provider.
CUSTOMERS HAVE TO CHANGE TO MOVE THE NEEDLE
We definitely have many options to choose from. If auto dealers can make a decent profit from the sale, I am sure they will be clamoring for their principle for the right to “cut” the available stock coming off the production line.
I think the turning point will be the battery warranty. When that period coincides with the 10-year COE, the risks associated with batteries, the most expensive component, will pass to the automaker and consumers will begin to dive.
Today, depending on the model, battery life can range from six to eight years. But time, experience and technological advances could extend it even further.
READ: Comment: Electric vehicles will take over Singapore. But this is what must happen first
READ: What is it like to have an electric car in Singapore? We took a ride with the new MINI Electric
For most of our transportation needs, if the regular use of environmentally friendly public transportation doesn’t meet our living needs, there are options ranging from carpooling to electric vehicle ownership and leasing.
While incentives, policies, and infrastructure are a job for the government and auto companies, the demand for greening all goods and services is really in the hands of the consumer.
If we choose not to drive electric modes of transport, even if they are a bit more inconvenient, then we can really move the needle and not only deliver on our bold electrification plans, but also show the rest of Asia how it can be done right.
Hear from Pulitzer Prize-winning author Dan Yergin reveal China’s calculations for going green and embracing electric vehicles on The Climate Conversations podcast:
Sanjay Kuttan is Chairman of the Sustainable Infrastructure Committee of the Singapore Sustainable Energy Association.
