Accelerating the Transition to Electric Vehicles in Singapore

Land transport is one of the world’s largest carbon dioxide emitters. The quest for sustainable mobility solutions has rendered electric vehicles (EVs) an attractive alternative to the typical internal combustion engine (ICE) vehicles, as the former emits significantly less greenhouse gas emissions. Thus, many cities, including Singapore, are electrifying their vehicle fleets as a plausible remedy for their skyrocketing land transport emissions.

Today, the land transport sector is Singapore’s third largest carbon emitter, accounting for 15% of its total carbon emissions. In response to this concerning trend Singapore aims to reduce its land transport emissions by 80% by 2050. To that end, it is assiduously developing the EV industry through its 2030 Green Plan and the 2040 Land Transport Master Plan. This has culminated in a rapid increase in EV adoption: EVs accounted for 8.4% of all new car registrations in Singapore, as compared to 4% in 2021 and only 0.2% in 2020.

EXISTING EV POLICIES IN SINGAPORE

Existing financial incentives for EVs include the EV Early Adoption Incentive Scheme, Enhanced Vehicular Emissions Scheme, and road tax reduction. Thanks to the two schemes, EVs have become more affordable for early adopters—the upfront cost of EV ownership is now reduced by $45,000 for cars and $57,500 for taxis. Road taxes for fully electric and hybrid cars will also be reduced by up to 34% from 1 January 2022.

To further accelerate EV adoption, the Land Transport Authority (LTA) recently amended the Vehicle Quota System (VQS) by updating the Certificate of Entitlement (COE) category for EVs. EVs with a power output of up to 110 kilowatts are now eligible for Category A COEs. This generates additional cost savings for prospective EV buyers as Category A COEs are up to $30,000 cheaper than Category B COEs.

Furthermore, new registrations of ICE cars and taxis will be banned from 2025 and be completely phased out of roads in Singapore by 2040. Leading this transition is the public sector—all new cars that are publicly procured will be of cleaner energy from 2023.

To cope with the surging demand for EV chargers, the government has embarked on its goal of installing 60,000 EV charging points nationwide by 2030. Recently, Mr S. Iswaran, the Minister of Transport, has clarified that this goal will be pushed forward to 2025. 

GAPS IN EXISTING EV POLICIES

While EV policies and legislations in Singapore are fairly comprehensive and can, in theory, advance environmental sustainability, social and economic sustainability appear to be elided. A more holistic approach that encompasses the social and economic aspects is required to gain public support for an EV transition. Existing EV policies in Singapore arguably only focus on encouraging EV ownership without considering factors that would help drivers commit to using EVs.

Singapore’s current EV policies that regulate and facilitate the EV transition for the point-to-point driving industry, which includes taxis and private-hire cars, are not sufficiently robust in terms of social and economic sustainability. Although financial incentives are extended to the taxi industry to defray the upfront costs of EVs, these policies fail to recognise that monetary cost may not be the sole consideration of point-to-point drivers. As they incur extremely high mileage, their chief concerns are charging and range anxieties. Charging anxieties arise when drivers worry about the availability and reliability of charging points, whereas range anxieties occur when drivers are concerned about their vehicle mileage after a single charge. As of September 2022, there are only 3,000 EV chargers in Singapore. Thus, currently available facilities are simply not enough to convince point-to-point drivers that they can and should drive EVs for the long-term.

An increasingly rampant issue is the hogging of EV charging stations, which hinders their efficient usage and creates charging and range anxieties. Hogging, in this context, refers to the behaviour of staying connected to an EV charging point even after the vehicle is fully charged. In Singapore, there is a lack of public education campaigns that cultivate proper charging etiquettes as well as regulations that prevent people from misusing the charging stations—no penalties have been meted out or institutionalised to penalise those who hog EV chargers. Should government inaction persist, the problem of hogging may undermine the attractiveness of EVs.

Finally, the generous subsidies channelled towards the EV transition are problematic. They (a) are regressive as they only benefit higher-income households or those who can afford to purchase EVs to begin with, (b) strain the government’s budget as they are fiscally expensive, and (c) undermine Singapore’s car-lite vision that seeks to decrease car dependency. LTA estimated that government spending on EV subsidies will total to about $71 million by 2025. It’s hardly fair if public tax revenues are used to subsidise expensive EVs for wealthy households. Furthermore, EVs are merely one of many means of emissions reduction. Thus, the current EV subsidies in Singapore are socially inequitable, economically unsustainable, and may produce counterproductive environmental outcomes.

However, not all hope is lost. There are strategies that can circumvent and address these gaps identified.

1. Allow Point-to-Point Drivers Priority Access to EV Charging Stations

Point-to-point drivers (i.e., taxi and private-hire car drivers) clock significant vehicle mileage daily—up to nine times that of an average family car. Thus, it’s critical to not only ensure that the EV fast-charging capabilities are reliable, but also provide point-to-point drivers priority access to EV charging stations so that their driving schedules would not be adversely impacted by charging and range anxieties. More research should be done to determine how such priority systems should work.

2. Impose Standardised Idle Fees to Prevent EV Charger Hogging

To disincentivise EV charger hogging behaviour in Singapore, private operators of EV charging points should be required to impose a standardised idle fee that charges the user according to the duration the car remains connected to the charger even after it’s fully charged. Idle fees should be standardised across all operators to prevent drivers from intentionally hogging charging points with low or no idle fees.

3. Impose Fuel Taxes for ICE Cars

The Singaporean government should consider imposing fuel taxes on ICE cars, which can double as a carbon tax for private transport and thus require individuals to adhere to the polluter-pays principle. While Singapore has adopted a carbon tax, it’s currently only targeted at “a taxable facility of a registered person,” and not directly applicable to the transportation sector. To avoid tapping into public tax revenue that can be used to fulfil other social and environmental goals, fuel tax revenues can be used to fund EV subsidies.

Taxing ICE cars not only poses a direct financial disincentive for the usage of ICE vehicles, but also increases the likelihood of people going car-free. Fuel taxes increase the cost of driving ICE cars by functioning as an informal carbon tax, which discourages their use and encourages hybrid car owners to charge their cars instead. Recognising that fuel taxes disproportionately affect ICE car owners, they would be compelled to either deregister their ICE cars or switch to EVs.

Sustainability of EVs in Singapore

Today, the imperative to accelerate EV adoption rates is hardly questioned. Should this be a cause for concern? In Singapore, at least, it remains unclear if an EV transition is truly a sustainable endeavour. For one, it’s crucial to acknowledge that the primary source of electricity in Singapore is natural gas—a type of fossil fuel. Singapore produces 95% of its electricity from natural gas, which is currently used to power EVs. If EVs run on fossil fuels in Singapore, this means that they may not be as ecologically beneficial as they are touted to be. Thus, Singapore needs to, first and foremost, clean its electricity grid before EVs can realise their environmental potential.

Furthermore, should all vehicles be electrified, there will be a substantial surge in the energy demand from EVs, which will then impose additional pressures on Singapore’s energy grid. Ultimately, it must be noted that EVs shouldn’t be regarded as the panacea as they are not inherently environmentally sustainable.

Admittedly, however, Singapore has a disadvantage in renewable energy generation due to its geographical circumstances. It’s also undeniable that, even if EVs are powered by natural gas, they are much less polluting and produce net carbon savings of 50% as compared to their ICE counterparts. In fact, if all light vehicles are electrified in Singapore, 4% of national carbon emissions will be abated. Moreover, for Singapore, EVs are more than just an environmental strategy. The EV industry is a high technology sector that will contribute to national industrial and economic progress in Singapore, befitting its position as a technology and innovation hub.

These caveats collectively point to the need for greater efforts in greening our urban transport system. Ideally, car ownership—EV or not—should be fundamentally discouraged, given the existence of more environmentally friendly transport alternatives such as public transport and cycling. Rather, EVs should be promoted in the carsharing and ride hailing sector, where entire vehicle fleets can be electrified quickly.