The Electric Vehicles Industry In Singapore: Is It Sustainable?

From 2010 to 2019, electric vehicles (EVs) in the world grew from 17,000 to 7.2 million or 1% of the global car stock. By 2040, this is predicted to rise to 31% or 500 million on the promise of a greener and cleaner future.

The rise of electric vehicles is here. But to understand why and how they will impact Singapore, there are two big issues to think about. One; will consumers switch over? And two; how effective are they in tackling climate change?

In 2020, EV sales in Thailand reached about 37,000 units or 10% of all passenger vehicle sales. In Singapore, only 1,274 EVs ply the roads, just 0.2% of the total car population. But, they are drawing far more attention than before.

New cost subsidies and tax rebates from the government are aimed at driving EV adoption. But are these enough to win consumers over?

Compared to normal petrol cars, consumers of EVs can save more than half of their cost. Another cost that has been reduced is maintenance fees. EVs have fewer moving parts; so no filter to change or spark plugs to renew.

Charging stations seem to be everywhere in Singapore, around 1,900 to be specific, a healthy 2:1 ratio for EVs. But fast forward 10 years and the ratio jumps to 5:1, 300,000 EVs to 60,000 charging stations. EV owners might find it harder to find charging points that easily in 2030.

In Singapore, 81% of population live in public housing with public car parks. Even if cars are not charged nightly, for each charging point to support more than one EV, it would require a complex system of subscription, payment, and electricity allocation. And what would be the strain and impact on Singapore’s power grid? Is there a need to upgrade power at a distribution and source level?

Perhaps one compelling reason to switch is the zero carbon footprint an EV emits. Road transportation accounts for 15% of total carbon emissions globally. Every fuel driven car replaced by an EV leads to quieter roads and cleaner air.

EVs will definitely help to reduce Singapore’s carbon emissions but probably not as much as most people would think. It is mainly because EVs will just shift the emissions from the vehicle to power stations.

The catch-22 for Singapore though, is its 95% reliance on natural gas to produce electricity. The country’s power stations produce electricity by burning natural gas, which is clean but still a fossil fuel. So what that means for Singapore is at most 1.3% of emissions can be save. Fundamentally, the more important change for Singapore is that the electricity production needs to be from renewable energy, but that will take a considerable amount of time.

Unlike Vietnam, where hydropower and renewable energy sources are abundant, high cloud cover or lack of wind or fast flowing waters make it hard for Singapore to harness renewable energy.

Lithium-ion batteries power smartphones and laptops, they also drive EVs. Besides lithium, nickel is now a key component, packing more energy at a lower cost, so vehicles can travel longer distances. To meet the rising EV demand, millions of new battery pack will be built, leading to a lithium and nickel mining boom that harms the environment greatly.

There is always an environmental impact associated with all mining operations and this is no different when mining for rare earth elements required for EV batteries, and there’s a lot of energy expanded to extract and process these rare earth elements as well. That’s the main reason why we see an upfront carbon emission loaded to the manufacturing of EVs.

Manufacturing EVs can result in 60% more carbon emissions than petrol vehicles but this carbon debt will be paid back after years of driving. An EV battery’s lifespan however, is more complicated. At the end of the lifecycle of the EV batteries, it is not yet commercially viable to recycle these batteries. So, these EV batteries at the end of their lifecycle, get put into landfills or get incinerated.

If EVs still impact the environment in some ways, and charging stations are a logistics and infrastructure challenge, why is Singapore pushing hard for EVs?

In 2019, the Asia Pacific EV market hit over US$84 billion, with China contributing 47%. By 2027, the market will grow to over US$357 billion, with untapped opportunities in related industries; like payments, fleet management, and telematics yet to be uncovered.