Untangling the policy barriers to electric cars

Why Singapore is the best and worst place to own an electric car

The Tesla Model S attracts a $6,202 road tax in Singapore. PHOTO: REUTERS

The story of a Tesla Model S which was slapped with a $15,000 carbon surcharge here throws up several questions. The one that goes up in neon must be: Are electric cars as clean as we think?

And there are conflicting answers, just as there are for diesel cars, hybrid cars and natural gas cars.

Detractors point out that electric cars are actually dirtier than conventional cars if one adopts a lifetime comparison. They say the cars' biggest shortcomings have to do with the production of lithium batteries and the type of fuel used at power stations that produce electricity used to charge these cars.

Most, if not all, of the arguments fail to account fully for the same weaknesses in conventional cars. Such as steel production, which is not exactly clean, the mining of rare metals that go into catalytic converters, or the process of getting oil out of the ground and into your car (not just fuel but the various lubricants too).

Just Google "flaring", "fracking" or "tar sands" and you get an idea of the environmental cost associated with fossil fuels.

The Tesla 
Model S attracts 
a $6,202 road 
tax in Singapore. PHOTO: REUTERS

The point is, every motorised form of mobility has emissions. But for electric cars, the emissions are away from population centres. That is what matters.

From an efficiency perspective, electric cars are also superior to conventional cars, even if you account for transmission losses and battery degradation.

How clean (or dirty) an electric car is depends much on the power source. In countries such as India and China, where coal accounts for about 60 per cent of electricity produced, an electric car would not be exactly squeaky clean.

Even in the United States, where coal has 40 per cent of grid mix, it is not great either. Nevertheless, in a cradle-to-grave analysis, US-based Union of Concerned Scientists found that electric cars are still cleaner than conventional cars in America.


In a place such as Singapore, however, where most of the electricity is produced by natural gas, electric cars are a lot greener. Ideally, these cars should be recharged from renewable or nuclear power, like in France.

But even if we are talking about coal, the first argument holds - electric cars remove bad air from population centres. That alone is worth something, as the World Health Organisation estimates that seven million people die prematurely annually from air pollution.

And with more than half the world's people living in cities, it is something policymakers should think about.

Policymakers in Singapore seem to be in two minds when it comes to electric cars and the environment.

The authorities have spent tens of millions on electric vehicle test-beds, with little to show for it. They have granted tax-free status to a fleet of BYD electric cars that are used as on-call taxis. Singapore is now embarking on another experiment with dubious value - an electric car-sharing scheme, which is going to cost several more millions.

On the other hand, we are not making it easy for individuals who want to own electric cars. We apply a grid factor to calculate the CO2 emission of electric cars.

Environmentally, it is not a wrong move. One should account for carbon emitted, even if it is at source. But philosophically, it is questionable, as the authorities do not account for carbon emitted during the production and transportation of conventional fuels.

It is argued that this principle is akin to applying a duty on petrol at the pumps. It isn't the same thing. Petrol duty, according to the Finance Ministry, is to discourage excessive usage. So, the more you drive, the more you fill up, the more you pay.

But the grid factor is upfront. Once applied, it is a sunk cost. It matters not whether an electric car owner clocks 10,000km a year or 30,000km a year.

Singapore also has a punitive road tax for electric cars (as well as plug-in hybrids). The road tax on the first and only Tesla Model S (P85) is $6,202 - almost equivalent to what a 6-litre petrol car attracts.

Since electric cars do not have engines, the authorities cannot base the road tax on engine displacement. So they use power output as a proxy. Fair enough. But the Model S produces about what the latest Porsche 911 Carrera S makes. Yet its road tax is nearly treble that of the Porsche's.

Meanwhile, there are more than 600 diesel VWs here, which were granted CEVS rebates but are spewing 20 to 30 times more nitrogen oxides than declared.

While CO2 and NOx emissions are two different things, the fact is that some of these cars may not even meet the Euro 4 standard, which all new cars must comply with before they can be registered.

Yet they are allowed to continue to ply the roads, until VW rolls out a rectification programme which may take more than two years from the time the diesel scandal surfaced.

The irony is laughable if it were not so tragic.

A version of this article appeared in the print edition of The Straits Times on March 12, 2016, with the headline 'Electric shocks'. Print Edition | Subscribe