Electric Cars; we look at how Norway has become a world leader in the EV segment and what Asia can learn
Analysts and government officials recognise the need for decadeslong strategies and subsidies to develop the EV industry in Asia
Several countries in Southeast Asia have stated their intent to become xelectric vehicle (EV) manufacturers, noticing the enormous growth potential for the market. But none are in a position to develop such production hubs without more vigorous state support, say analysts. Thailand, Malaysia and the Philippines have all indicated that they want to become manufacturing centres for production and assembly of EVs, but none of them have decided on financial incentives that would draw EV companies to invest there. The vehicles would have to be manufactured for export as there is almost no market for them in Southeast Asia yet.
The Thai government has made EV production a national priority, listing it as one of 10 industry clusters to be the focus of the country’s next growth phase. Though it has vowed strong support, the Board of Investment has not decided on investment privileges yet while the Energy Ministry is writing a plan to build EV facilities such as charging stations.
The problem is it doesn’t make sense for the government to offer enough incentives to offset the high cost of EV batteries to make EVs affordable, thus creating demand and encouraging further investment, Vichai Jirathiyut, president of the Thailand Automotive Institute, told the Bangkok Post.
“Relying on such privileges could create a huge burden for the government. And the Thai government is unlikely to provide a subsidy to lower EV prices and support sales since it requires a huge budget,” he said.
Siam Commercial Bank’s Economic Intelligence Center predicts successful market penetration of EVs in Thailand would take a decade. The research house notes manufacturers still cannot agree on technology that would best meet consumer demand and EVs remain pricey, largely because of the cost of batteries. As of last year, EV sales account for less than 1% of global car sales.
Thai Deputy Prime Minister Somkid Jatusripitak insisted the country must forge ahead as this technology is the future and shows huge consumer demand. To increase consumer awareness, the government recentlyallowed imports of completely built-up EVs provided importers invest in domestic production of the same model within a few years.
The Energy Ministry set a goal for EV units in Thailand to rise to 1.2 million by 2036, but this would require a huge outlay to build up EV infrastructure, specifically hundreds of charging stations, said Mr Vichai. The ministry, energy flagship PTT Plc, and several major automakers signed a memorandum of understanding to develop EV charging stations across the country. Thailand currently has four charging stations.
Most of the early Thai government purchases of EVs are for buses and minibuses.
Hiroyuki Fukui, president of Toyota Motor Asia-Pacific, said policymakers in Thailand and ASEAN need to make the public understand the importance
of environmental concerns if the region wants to become an EV hub. That lack of recognition along with the higher cost of EVs has limited their sales in Southeast Asia, Mr Fukui told the Bangkok Post.
Thailand had 70,285 hybrid and plug-in hybrid EVs registered in 2015.
Before Japan was able to sell 4.38 million hybrid EVs domestically, the Japanese government and carmakers had to map out a 20-year strategy for the automotive sector including environmental innovation, CO2 reduction, traffic flows in big cities and green manufacturing plants, Hisashi Nakai, public affairs spokesman for Toyota Motor Corp, told the Bangkok Post.
The government’s strategy also utilised research and development, demonstration programmes and longterm market support such as artificially creating niche markets for targeted technologies, he said. Toyota eventually introduced its Prius hybrid in 1997 thanks to generous government tax breaks and subsidies.
In the Philippines, industrial giant Ayala Corp is looking to partner with foreign automakers to produce EVs. The economy is booming there and new car sales in the first half of this year grew 28% year-on-year.
Annual EV sales in India are paltry at less than 1,000 units, but automaker Mahindra & Mahindra is keen to enter the segment as well. And Chinese online entertainment firm LeEco announced in August it plans to start making EVs with an investment of USD 3 billion. Like Ayala, LeEco has no prior automotive experience.
China may well lead the way for the EV market in Asia, with a raft of new startups betting that the urban mass market will develop a taste for electric cars. LeSEE, NextEV, Future Mobility, Qiantu Motor, and WM Motor are all angling to take advantage of Chinese government subsidies that it hopes will develop the market.
Many Chinese startups see a market for affordable EVs with mobile internet connectivity, made from lowcost, high-quality parts from China, that can be shared or leased when needed for city dwellers, reports Asia Times.
Singapore envisions a similar model and the transport minister for the citystate recently announced a scheme that will see 1,000 EVs introduced as part of a car-sharing programme along with 2,000 charging stations. The government also provides carbon rebates to EV owners in cash after the cars pass CO2 emissions test for the electricity generated to charge the cars.
The Singaporean government may also introduce EV buses soon, but Transport Minister Khaw Boon Wan reiterated public transit is the greenest form of transportation because even though EVs produce no tailpipe emissions, the process of generating the electricity they consume emits carbon, he told www.eco-business.com.
Malaysia’s Amber Dual Sdn Bhd signed a joint venture agreement in May with China’s Beijing Auto International Corporation (BAIC), one of the global leaders in EV production, to develop a manufacturing plant in the country. Output is expected to commence next year. BAIC already has a plant in Malaysia that performs completely knocked down vehicle assembly for cars with normal engines, hybrids and EVs.
There are four platforms of EVs. Hybrid electric vehicles and plugin hybrid electric vehicles were first developed with two systems, electricity/ petrol and electricity/diesel. Battery electric vehicles were later developed, which are fuelled purely by electricity. Fuel-cell electric vehicles represent the latest technology.
There has been tremendous interest in EVs globally. Within three days of Tesla offering its new “affordable” Model 3 sedan, the company had received deposits for 276,000 orders. And in Norway roughly one-third of new car purchases are EVs, with the segment reporting 71% growth in 2015.
PHOTO: STEVE JURVETSON - FLICKR: TESLA AUTOBOTS
PHOTO: MARIORDO As of June 2016, the Nissan Leaf (left) is the world's all-time top-selling highway-legal all-electric car (over 228,000), and the Chevrolet Volt (right) is the world's best-selling plug-in hybrid (about 117,300).