Building Sustainable Cities

Green vehicles add power to the fight against climate change

Advancements in technology are closing the price gap between electric and combustion engine vehicles, while pressure is mounting on policymakers to curb vehicle emissions

In Singapore, government rebates can bring the cost of owning a fully electric car down by up to $45,000.
In Singapore, government rebates can bring the cost of owning a fully electric car down by up to $45,000.PHOTO: UNSPLASH

Nearly a million vehicles ply Singapore’s roads today, releasing around 6.4 million tonnes of carbon dioxide (CO2)-equivalent each year, over a tenth of the city-state’s total emissions. Less than 0.5 per cent of these are electric vehicles (EVs).

But momentum is building for a green transport revolution. By 2040, Singapore aims to have driven all vehicles running on fossil fuels through an internal combustion engine (ICEs) off the road.

Given the 10-year certificates of entitlement, this means from 2030, all new cars will have to run on cleaner energy. They will have to be either electric, hybrid or hydrogen fuel cell ones. And diesel cars and taxis — which emit the, even more, pollutive PM2.5 — will not be sold from 2025.

Singapore is clearly pushing hard to boost the use of electric vehicles. Last year, it had a target to have 28,000 EV charging points around the island by 2030, which doubled to 60,000 earlier this year.

What is driving the shift?

Singapore is not alone in its drive to push EV adoption, but it has lagged behind other global cities over the past decade.

Norway’s Oslo, for example, went from 75 per cent of new private vehicle sales being diesel in 2010 to 75 per cent EVs in 2020. And China’s Shenzhen was the first city to make its bus fleet fully electric back in 2017.

Last year, the number of electric cars on the world’s roads hit 10 million, a 43 per cent increase from 2019, says the International Energy Agency’s Global EV Outlook 2021.

Further pick up is expected as passenger EV sales are projected to rise from 3 million in 2020 to 66 million in 2040, even without further policy support, a Bloomberg New Energy Finance (BNEF) report says.

Today, governments are working on boosting driving range, charging infrastructure and speed, and affordability in a bid to boost EV adoption, cut emissions, and arrest climate change.

How technology makes a difference

Advancements in technology have rapidly narrowed the price difference between traditional and electric cars. And BNEF predicts that battery EVs could on average be cheaper than ICEs as soon as 2025, without subsidies.

Falling prices for lithium-ion batteries are the biggest tech driver. Average lithium-ion battery pack prices fell 89 per cent from 2010 to 2020, dropping 13 per cent in 2020 alone.

BNEF expects pack prices to fall to less than US$100/kWh (S$136/kWh) by 2024 as materials costs and scrappage rates continue to fall, and energy density and output rise. 

How are EVs being promoted?

In Singapore, S$30 million has been earmarked for EV-related initiatives over the next five years, including incentives to make buying an EV more attractive.

Rebates under the EV Early Adoption Incentive and the enhanced Vehicular Emissions Scheme — which also hiked surcharges for more pollutive vehicles — can bring the cost of owning a fully electric car down by up to S$45,000. A new fully electric taxi could be up to S$57,500 cheaper under these schemes.

As at end-July, there were 1,643 electric passenger cars running on Singapore’s roads, 426 more than at the start of 2021, data from the Land Transport Authority shows. And 94 new passenger EVs were registered in the month of July alone, close to the 97 registered in all of 2020.

This is despite a possible dampening of buyer sentiment due to the return of pandemic-related restrictions, notes Paul Welford, vice-president of the Electric Vehicles Association of Singapore, a non-profit promoting awareness of electric mobility.

He thinks the numbers are likely to rise in the coming months, thanks to the typical Tesla effect of “making a big splash” in markets it enters.

Elon Musk’s EV brand started delivering cars to Singapore buyers in July, five months after it first launched its sales portal here. 

What holds back EV adoption?

The lack of charging infrastructure is a top concern, as the Deloitte Global Automotive Consumer Study shows. Currently, there are over 1,800 public EV charging stations offered by providers such as BlueSG, Greenlots and SPGroup in HDB carparks, petrol stations, shopping malls and office buildings.

The Government aims to have 40,000 points in public carparks and 20,000 in private premises across the island by 2030. Eight towns will have charging points in all HDB carparks by 2025 and an EV Common Charger Grant will help defray installation costs for non-landed private residences such as condominiums.

The Transport Ministry also made clear that its 2030 target prioritises the sheer lack of charging points rather than introducing fast, high-powered charging, which would require major upgrading of the power substations and grid infrastructure.

Are EVs safe? There are common safety standards for EV batteries and charging which manufacturers have to adhere to. This ought to prevent the fires that happened with charging personal mobility devices and fuel similar worries over EVs that have thermal management systems and protective sensors built-in.

Despite the clear benefit of zero tailpipe emissions and less noise, valid questions remain over how much greener EVs are given that the electricity that powers them is, in Singapore’s case, still generated mostly from natural gas rather than renewable sources.

The Transport Ministry estimates net carbon savings of about 50 per cent in switching from ICEs to EVs. If light vehicles alone all ran on electricity, that would yield a total net carbon abatement of 1.5 to 2 million tonnes of CO2-equivalent each year, or 4 per cent of Singapore’s annual emissions. 

What role can public transport play?

Having businesses commit to the electrification of fleet vehicles — ride-hailing, last-mile logistics and more — could yield greater environmental impact. They are more frequently used and have higher mileage than most passenger vehicles, notes Transport Minister S Iswaran.

One example is SMRT, which already has a fully hybrid tax fleet and rolled out its first batch of electric taxis in August — part of its five-year plan to switch all cabs to EVs. And from 2023, all new cars procured by the Government will be cleaner energy models, eliminating ICEs from its fleet by 2035.

Perhaps in response to a scheme that from April gives buyers of electric light commercial vehicles a S$30,000 cash rebate, the number of EVs in the “goods and other vehicles” category more than doubled to 234 by the end of July. There were just 97 at the start of this year.

The larger the vehicle, the greater the impact. “Heavy vehicles comprise less than a tenth of our vehicle population but account for nearly half the carbon emissions,” Mr Iswaran said at the opening of Sembwaste’s EV fast-charging hub, where it also launched 24 electric waste collection trucks.

The public bus fleet is being greened too. There will be 60 electric public buses on Singapore’s roads by the end of this year and with the Government pledging to buy only cleaner energy buses from last year. All pure-diesel buses will be phased out before 2040.


Financing the push to promote EVs

When it comes to buying an EV, the cost premium was the second most important concern for the more than 1,000 Singapore consumers surveyed by Deloitte.

Apart from various incentives from the Government to make electric vehicles a more attractive choice, banks have rolled out green car loans too.

UOB’s “Go Green Car Loan”, for instance, offers buyers of new, fully electric cars an indicative interest rate of 1.68 per cent per annum. 

This beats the 2.68 per cent and 2.78 per cent per annum interest rate on loans taken out to buy non-electric new cars and used cars respectively.

Beyond the better rate, electric car buyers who apply for UOB’s green car loan will also receive three Renewable Energy Certificates (RECs). These market-based instruments are created when three megawatt-hours of renewable energy is produced. This translates into 2.7 tonnes of carbon emissions avoided, the equivalent of growing 164 tree seedlings for 10 years.

“RECs reflect consumers’ demand for renewable energy and also enable consumers to play a part in supporting the development of more renewable energy projects,” says UOB’s head of group personal financial services, Jacquelyn Tan. 

This is the fifth of a 15-part series in collaboration with