SIE2016 Effective Communication: Draft 3 Technical Report

1. Introduction

1.1 Background

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 may influence the consumer’s decisions to purchase different types of vehicles.

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, it was reported that 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 low usage of EVs, the main stakeholders would be the ministry of transport (MOT) as well as businesses related to the automobile industry. MOT 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 ministry of transport can provide more incentives for consumers who purchase EVs. Businesses that have a stake in this include local automobile businesses such as motor vehicle manufacturers. These businesses are responsible for advocating the use of electric vehicles to ensure that they have a sustainable business in the long run. The low usage of EVs also accounts for high carbon emissions from petroleum vehicles as providing more incentives will encourage motorists to adopt the use of EVs.

1.2 Problem Statement

The use of electric vehicles in Singapore should be incremental for the next ten years and this could potentially reduce carbon emissions and increase energy efficiency in Singapore. (IDEAL) However, there are not many EVs in Singapore due to insufficient financial incentives provided for motorists who purchase and own EVs. (GAP) As such, the provision of different incentives should be implemented by the finance minister of Singapore to encourage more motorists to use EVs (GOAL).

1.3 Purpose Statement

This proposal aims to propose to Mr Khaw Boon Wan, transport minister of Singapore to allocate the different types of incentives to motorists who purchase and own the EVs.

2. Proposed Solutions

The team referenced the electric vehicle’s benchmark in Norway and we came up with three solutions to increase the number of EVs in Singapore.

2.1 Increase the amount of monetary incentives for motorists who purchase EVs

According to LTA with effect from 1 January, 2018 Singapore had revamped its carbon emission-based vehicle scheme (CEVS) to the broad-based vehicular emissions scheme (VES), considering the amount of emissions produced by a vehicle. Currently, under the VES, the maximum incentives that the government is providing is $20,000. In comparison to the cost of an electric vehicle in Singapore, the current rebate that the government is insufficient. To encourage motorists to purchase EVs, the government should consider increasing the amount of monetary incentives for EVs owners.

2.2 Waiver of parking fees for own residential estate

In Norway, waiver of public parking fees was implemented in the past and it has a negative implication on the economic economy (Aasness, Odeck, 2015). The team noticed that Norway allowed waiver to multiple parking areas, which might encourage motorists to take advantage of this waiver system. Currently, Singapore charges the seasonal parking fees to motorist in order to park their vehicles in their own residential estate. Thus, the team proposes that motorists that own an EVs should have a waiver on their own residential estate. This can prevent motorists from taking advantage of the waiver of parking fees given to them.

2.3 Provide road tax subsidies for consumers who purchase EVs

Other than electric vehicles, the remaining vehicles are required to pay a sum of money each day as part of the motor insurance tax in Norway (Norweigian Motor Insurers’ Bureau, 2018). However, the team is aware that Norway did not impose the motor insurance tax for EVs as they want to encourage more motorists to use EVs. In Singapore, they impose road taxes for all vehicles to encourage motorists to use vehicles that are fuel-efficient and produce less emissions. The team proposes that the government should provide road tax subsidies rather than waiving off the road tax fully so that motorists can switch to using EVs.

2.4 Prioritize solution

The team has come up with three solutions and the team’s recommended prioritize solution is to increase the amount of monetary incentives for motorists who purchase and own EVs. Most motorists will take into consideration the financial factor when purchasing new cars. Therefore, the amount of incentive given would influence the consumer’s decision in purchasing EVs. To conclude, the team have decided to choose the first solution to be implemented in Singapore.

3. Benefits

The team’s proposed solutions can lead to an increase in EVs in Singapore, having more motorists switching to EVs can reduce carbon emissions and increase energy efficiency.

3.1 Reduce in carbon emissions

According to ‘Transport Policy’ (Noela,Rubensa,Kestera,Sovacoola, 2018) of the 227 interviews that was carried out ,167 shared that one of the more prominent benefits of using EVs is environmental benefit. The response of the 167 respondents is equivalent to 73% of the interviews. Out of those who mentioned emission, 99 interviews clearly mentioned about the benefits of reduction of carbon emissions by using Electric Vehicles (EVs) as compared to Internal Combustion Engine Vehicles (ICEVs). While 94 interviews also mentioned regarding the impact that EVs can have on decreasing local health emissions such as NOx. The table below has shown the data of the interview that reflects what the respondents think is the co-benefits of an electric vehicle. With the use of EVs, there will be fewer ICEVs on the road and therefore the emission of harmful gases to the environment will be reduced. The emission of carbon dioxide is commonly used to assess the impact the vehicle have caused to the environment. Charging of EVs reduced carbon dioxide emission by roughly 10% as compared to the base case of gasoline vehicles.In general, it is clear that EVs reduce the total carbon emission even in electricity systems. This is because of the high efficiency of electric motor as compared to the internal combustion engine.

The global EVs fleet consumed approximately 58 terawatt-hours (TWh) of electricity in 2018 as compared to the total electricity demand of Switzerland in 2017 (IEA, 2019). Of all the vehicles, two-wheelers account the largest percentage of EV energy demand whereas light-duty vehicles show a stronger growth as compared to other transport modes in 2017 and 2018. China has accounted for 80% of the world's electricity demand for EVs in 2018. The global EV market in 2018 has emitted about 38 million tonnes of carbon dioxide as compared to the internal combustion engine fleet which emitted 78 million tonnes. This means that EBs can save approximately 40 million tonnes of carbon -- dioxide and reduces the carbon emissions caused to the environment.

3.2 Increase in energy efficiency

Typically, the energy density of an internal combustion engine is affected by the fuel tank size and is separated from the energy conversion device, which will decrease the balances between the compromising acceleration for cruising efficiency. The distinctly high energy density of the tank of liquid fuel reduces the utilization of an inefficient energy conversion device.

While a BEV is competent of providing maximum power and average power at outstanding efficiency but has a fairly low energy density. BEVs attain approximately 3–6 mile kWh1 (INL, 2006) rely on the vehicle design and driver behaviour.

This means that BEV provide a more balances compromising acceleration for cruising efficiency as the energy density is low throughout.

4. Proposal Evaluation

In this section, the team’s drawbacks of proposed solutions will be evaluated and discussed.

4.1 Challenges

One of the potential challenges posed to the proposed solutions would be the economic loss in Singapore. For example, waiver of parking fees means that parking spaces would be occupied at zero cost. Thus, this would lead to economic loss and adversely affect the economic sector in Singapore. The purpose of having road tax in Singapore is to encourage motorists to use vehicles that are fuel-efficient and produce less emissions. But providing road tax subsidies would also lead to economic loss in Singapore. Evs would be using the road just like any other vehicle, but EVs users would only be paying a lesser amount of road tax as compared to other motorists who have to pay the full amount.

4.2 Limitations

One of the limitations of the proposed solutions would the reduction of budget given to the transport sector. According to the report by the head of expenditure (2019), it shows that Singapore has reduced the budget allocated to the transport sector in its yearly budget. In the year 2018, the government had allocated 14.9% of its overall budget for the transport sector in terms of its operation and development cost. The report also shows that in 2019, there has been a slight drop in the budget allocation to the transport sector. The government had allocated 13.3% of the entire budget to the transport sector. The report shows that there has been a drop of 1.6% as compared to last year. Therefore it is probable that the transport sector may not have sufficient funding for the incentives for EVs having in mind the upcoming development that the government wants to carry out.

5. Methods and Procedure

In this section, the team’s primary research and secondary research will be analyzed and evaluated.

5.1 Primary Research

In an attempt to explore the need for providing different types of incentives for consumers who purchase EVs and to identify the limitation that was limiting the amount of monetary incentive given to consumers purchasing EVs, quantitative survey research was conducted. In the survey (refer to Appendix A), respondents were asked about what were their main concerns when purchasing EVs and the key factors that prevent them from buying EVs.

5.2 Secondary Research

To further supplement the findings obtained through primary research, secondary research was conducted. Research articles related to government websites, scholarly articles and other relevant information.

6. Conclusion

The problem with EVs not widely used in Singapore has serious environmental implications as the majority of the motorists are using diesel/petroleum vehicles. The ICEVs can produce a large amount of carbon emissions which will be detrimental not only to the environment but also to the health of its citizens. It may lead to serious health and environmental issues in the long run.

Other than using the proposed solution, Singapore could research on alternative ways to encourage Singaporeans to prioritize EVs over diesel/petroleum vehicles.

Since the transport minister has an important role to play in the incremental use of electric vehicles in the next 10 years, the allocation of different types of incentives for consumers who purchase and own EV would be a good initiative to encourage more motorists to switch from their petroleum/diesel vehicles. With greater use of electric vehicles in the long run, the carbon emissions caused to the environment can be greatly reduced.

7. References

Aasness, M., & Odeck, J. (2015). The increase of electric vehicle usage in Norway—incentives and adverse effects. European Transport Research Review, 7(4). https://doi.org/10.1007/s12544-015-0182-4

Census and Economic Information Center. (2018). Singapore oil consumption. Retrieved from https://www.ceicdata.com/en/indicator/singapore/oil-consumption

Ecofys. (2018, September 03). Incentives for electric vehicles in Norway. Retrieved 25 October 2019, from https://www.euki.de/wp-content/uploads/2018/09/fact-sheet-incentives-for-electric-vehicles-no.pdf

Financial Security. (2019). Total estimates outlays for FY2019 by head of expenditure

International Energy Agency (2019), Global EV Outlook 2019. Retrieved 25 October 2019, from www.iea.org/publications/reports/globalevoutlook2019/.

Land Transport Authority. (2019). Annual Vehicle Statistics 2018. Singapore: Land Transport Authority. Retrieved 25 October 2019, from

https://www.lta.gov.sg/content/dam/ltaweb/corp/PublicationsResearch/files/FactsandFigures/MVP01-4_MVP_by_fuel.pdf

Land Transport Authority. (2019, Jan 31). Vehicle tax structure. Retrieved 25 October 2019, from https://www.lta.gov.sg/content/ltaweb/en/roads-and-motoring/owning-a-vehicle/costs-of-owning-a-vehicle/tax-structure-for-cars.html

Orlov, A., & Kallbekken, S. (2019). The impact of consumer attitudes towards energy efficiency on car choice: Survey results from Norway. Journal Of Cleaner Production, 214, 816-822.https://doi.org/10.1016/j.jclepro.2018.12.326

Wong, D. (2019, October). A dummies guide to owning an electric vehicle in Singapore. Carbuyer. Retrieved from https://www.carbuyer.com.sg/a-dummies-guide-to-owning-an-electric-vehicle-in-singapore/

Appendix A - Survey of perception of electric vehicles

Based on the results shown, 68.3% of the respondents indicated that insufficient incentive given when purchasing EVs is the main factor that is stopping them from buying EVs. This result supports the team’s observation that there should be more incentives provided for consumers who purchase EVs or consider switching their petroleum/diesel vehicles to EVs.

Results show that 65% of the respondents chose “incentive” as the factor that attracts them the most when purchasing EVs. 20% of the respondents chose “low maintenance cost”, 10 % of the respondents chose “positive environment effect” and 5 % chose “road tax subsidies”. This shows that incentives would be the main factor that attracts consumers to purchase or switch to EVs.

Based on the results collected from the survey, it is clear that motorists in Singapore are currently not ready to buy electric vehicles. 33.3% of the respondents want to buy an electric vehicle in the next 5 years. Out of the 60 respondents, 8.3% of them do not wish to buy an electric vehicle. While 48.3 % of the respondents would want to buy an electric vehicle in the next 10 years. This shows that electric vehicle is currently not very popular in Singapore as the latest policies and schemes that are in place may not be what the citizens are looking for.