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Tackling barriers to green mobility uptake in ASEAN

By Rika Safrina, Muhammad Rizki Kresnawan, and Prof. Ir. Dr. Haslenda Hashim

Thursday, 16 Jun 2022

Southeast Asia’s transportation sector is the second largest greenhouse gas emitter after the power sector and is projected to account for a 25 percent share of the final energy consumption in 2025.

Shifting from conventional vehicles to green mobility is seen as one option to reduce emissions for environmental sustainability in the region. The use of green mobility, such as electric vehicles (EVs), has been introduced as a green technology solution to tackle climate change and air pollution for its potential to produce less harmful gases than gasoline-fueled vehicles.

EV absorption is expected to expand to around 140 million new consumers in Southeast Asia by 2030. Research has found that Thailand, Indonesia and Malaysia are the largest four-wheeler vehicle markets in ASEAN, accounting for 75 percent of the market share. Meanwhile, 99 percent of two-wheeler vehicle sales come from Thailand, Vietnam and Indonesia.

ASEAN member states have released their own targets in terms of EVs on the road and installing charging infrastructure. Indonesia aims to have 19,000 electric four-wheelers and 750,000 electric two-wheelers on the road, as well as 2,400 charging stations by 2025. As the region’s most significant auto production center, Thailand plans to have 50 percent of the cars it produces to be EVs by 2030. Meanwhile, Singapore has announced the phasing out of internal combustion engine vehicles (ICEVs) by 2040.

Despite the availability of policies in shaping an EV-friendly environment, the successful adoption of EVs is also highly dependent on consumer perception. An online survey conducted by the ASEAN Centre for Energy and University of Technology Malaysia identified public opinion on those factors that can help accelerate EV uptake among ASEAN countries. The survey, which involved participants from 10 ASEAN states, showed that only 8 percent of the participants owned an EV, while 10 percent were considering buying one as soon as possible and 84 percent planned to buy one in the next 5-10 years.

The survey listed various factors affecting consumer choices in adopting EVs under three categories: costs, environmental benefits and infrastructure. It found that the top five factors were related to costs and infrastructure: maintenance costs (82 percent), purchase cost (79 percent), charging time (61 percent), availability of charging infrastructure (54 percent) and battery costs (43 percent).

To make owning EVs more affordable, ASEAN governments have launched several initiatives, mainly tax incentives. One of the most common initiatives is duty and tax reductions or exemptions. For example, EVs in Malaysia are exempted from import duty, excise duty, sales tax and road tax, and subjected to income tax relief of up to 2,500 ringgit (US$589).

In Singapore, one of the most expensive countries in the world to own a car, an early EV adoption incentive is in force from 2021 to 2023. This incentive offers a 45 percent rebate and road tax reduction for EV purchasers. Although this helps reduce the EV purchase cost, it is still not lower than the purchase cost for ICEVs, especially when considering other cost factors such as maintenance, battery and electricity.

The survey showed that EV costs in ASEAN were likely to fall within the $50,000-100,000 range.

In addition, EV penetration must be supported by increased availability of charging infrastructure. Access to superchargers, which can fully charge an EV in a few hours, is also essential. Considering that batteries have a prominent role in EV development, having a battery factory would be crucial. Factories can produce electric vehicle batteries (EVBs) to fulfill domestic demand and export the rest to gain economic benefits. Last September, Indonesia broke ground on the first EVB factory in the region.

The availability of clean and affordable energy is vital to supporting green mobility to ensure energy security and environmental sustainability. As ASEAN aims to achieve a regional renewable energy target of 23 percent share of the supply mix and 35 percent of installed capacity by 2025, the natural problem of intermittency will affect grid stability. EVs could address this issue with proper demand-side management in relation to peak renewable energy generation. In parallel, large-scale variable renewable energy sources (VRES) with energy storage systems should also be increased to improve energy supplies with a cleaner grid system.

EV deployment can be matched with prior implementation of biofuels in the region, which has abundant resources. Biofuels can focus on heavy-duty vehicles and long-distance transportation, while electric mobility can be concentrated in urban areas. This combination is expected to reduce overall infrastructure costs and, at the same time, take advantage of the region’s native energy supply.

Nevertheless, the environmental impacts associated with increasingly higher demand for EVs, EVB manufacturing and EVB life spans must be considered. One potential approach to addressing those issues is through battery-swapping stations, which have been implemented in Germany and China. There must also be a sound collection and recycling system for old EVBs to cater to the future EV ecosystem.

Notably, integrating a high share of clean energy into the grid for powering EVs could have an important role in ensuring the green transition, when EVs are adopted on a large scale in the near future. This should be coupled with resource conservation via efficient collection and technologies for EVB recycling and repurposing. In addition to the availability of tax incentives and other supporting mechanisms, installing charging stations is also needed. Public awareness initiatives to address consumers’ key concerns are also vital to expanding the market by promoting EVs on social media platforms and showcase events.

If all these barriers can be overcome, the region could be home to EVs well into the future.

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