1. Introduction
1.1 Background
Land Transport Authority (LTA) released a yearly vehicle statistic in 2018 regarding the motor vehicle population in Singapore along with the types of fuel used by the vehicles as shown in Figure 1. The statistics showed clearly that over the past 10 years, there is only a slight increase in the electric vehicles(EVs) population while petroleum, diesel and petrol-electric operated cars increased largely.
With the growing amount of fuel consuming vehicles, the consumption of oil in Singapore has also increased greatly over the past 10 years. According to Census and Economic Information Center(CEIC) data (2019), Singapore’s oil consumption was 1,448.792 barrel/day in December 2018 which is 2.1 percent more than that in Dec 2017 as shown in Figure 2.
Singapore’s oil consumption data was updated annually, with an average of 457.718 barrel/day from Dec 1965 to 2018. This means that a vehicle is consuming at least 166,805 Barrels/Year. However, vehicles in Singapore consumed 528,520 barrel/year in 2018 which exceeds the average oil consumption from 1965 to 2018. This shows that oil consumption in Singapore is increasing at a tremendous pace.
LTA has updated its latest road tax formula where it is used to calculate the car’s engine displacement or power. For petroleum vehicles with an engine capacity of 998cc, the road tax cost about $391 yearly while the road tax for electric vehicles with 120 horsepower is about 89kW costs about $1099 yearly (CarBuyer, 2019) This means that owning an electric vehicle will need to pay more tax as compared to petroleum vehicles.
Regarding the issue of insufficient publicity on EVs, the main stakeholders would be LTA as well as businesses related to the automobile industry. LTA is responsible for constructing and implementing policies that will greatly affect the actions taken to promote the use of electric vehicles. These policies can aid in promoting the adoption of new technologies for electric vehicles. The government can introduce campaigns to raise awareness to the public on the use of EVs in the long run. Businesses that have a stake in this issue include local automobile businesses such as motor vehicle manufacturers and petrol stations. These businesses are responsible for advocating the use of electric vehicles to ensure that they have a sustainable business in the long run. Insufficient publicity on EVs also accounts for high carbon emissions from petroleum vehicles as there is a lack of awareness to educate the public to adopt the use of EVs.
According to the report ‘Incentives for Electric Vehicles in Norway‘, Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) (2018) had introduced different ways to incentivize motorists who choose to use electric vehicles. Some of the incentives that the government has implemented were an exemption from registration tax, low annual tax, free municipal parking, having access to bus lanes, and many more. In Norway, the most important incentives would be financial incentives. The total cost of ownership of Plug-In Electric Vehicles(PEVs) is much lower as compared to the Internal Combustion Engine(ICEs).
Based on the report, a study led by Haugneland, Lorentzen, Bu, & Hauge (2017) has shown that the main reason consumers will consider purchasing EVs is to save money with the different incentives provided by the government. Other studies based on surveys conducted for consumers had shown that operational cost and upfront investment are some of the vital considerations that consumers will look into before purchasing EVs. In Norway, the price of fossil fuels is relatively higher as compared to electricity. The transportation sector in Norway was heavily taxed, registration taxes on new vehicles, annual taxes, taxes on fuels and numerous toll roads were included. This allows the government to provide more incentives for consumers so that it can influence consumer’s decisions to purchase different types of vehicles.
1.2 Problem Statement
Motorists in Singapore are not using EVs due to insufficient publicity on electric vehicles and incentives provided by the government are inadequate. Implementing policies to educate the public about EVs and providing more incentives to promote the use of EVs that can be considered as a sustainable mode of transport for motorists.
1.3 Purpose Statement
This report aims to propose to Mr Heng Sweat Keat, the finance minister of Singapore to promote the use of EVs in Singapore by providing more incentives for motorists who use EVs.
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