Singapore sheds barriers to EV adoption

To encourage EV usage, 28,000 chargers will be deployed nationwide by 2030.

Electric vehicles (EV) have yet to make their mark in Singapore’s transport sector as their penetration rate is still at 1%, but the city is shedding barriers towards their adoption with the phase out of internal combustion (ICE) vehicles that was announced in the Budget 2020 speech.

Also read: Singapore Budget 2020 Full Coverage: COVID-hit sectors to get $4b and GST hike moved to 2025

One of the three measures that the government will implement to phase out ICE vehicles includes extending public charging infrastructure for EVs and raising their count from 1,600. According to finance minister Heng Swee Keat, up to 28,000 chargers should be available nationwide by 2030.

Another ICE phase out measure is the introduction of a usage-based tax on EVs as an alternative to fewer excise duties. A lump-sum tax will be imposed in the built-in road tax schedule of EVs to partly account for the loss of fuel excise duties.

The tax will be introduced in phases starting January 2021 for over 30 years, whilst the full quantum will be implemented by January 2023.

According to Wood Mackenzie research director Sushant Gupta, an effort to phase out at most 650,000 of the car population in the next 20 years looks challenging. “But the announced policy support for EVs looks holistic and realistic. Subsidies are being raised to incentivise EV purchases with a gradual increase in lump-sum taxes to offset the impact of fuel duty. Such policies serve as a role model for other cities and countries within the region to promote EVs.”

A parallel development of charging infrastructure would also reduce the common barrier in EV adoption, Sushant said. “In addition, range anxiety is not a big concern because of the smaller distance trips made in Singapore compared to some larger countries.”

As EV adoption rises, the demand for gasoline and diesel may take a hit, however. But Sushant said the effects are less severe. “The gasoline demand, for example, is about 17,000 barrels per day, just 0.2% of Asia’s total gasoline demand," he added.