ASEAN wants to go electric – IECC

ASEAN wants to go electric

The first image that usually springs to mind when someone mentions any Southeast Asian capital is congested roads filled with honking cars and motorcycles. Congested roads have become synonymous with Southeast Asia, and that is not going to change anytime soon.

According to the latest data, vehicle sales in Southeast Asia is set to outpace all other regions in the world. Last year, aggregate new car sales in Singapore, Indonesia, Malaysia, Thailand, Vietnam and the Philippines rose five percent to nearly 3.4 million units. Aside from that, it is estimated that vehicle ownership across the region is expected to grow more than 40 percent by 2040.

Car ownership in the region is particularly high compared to other parts of the world. It’s not uncommon to have more than one car per household in countries such as Thailand, Malaysia and Indonesia. Meanwhile in countries such as Vietnam, motorcycles are the vehicle of choice. The Vietnam Investment Review highlighted last year that Hanoi has an average growth rate of 10 percent and it is projected that by 2025, Hanoi alone will have 11 million motorcycles on its streets.

Aside from problems arising due to traffic congestion, another thing to worry about is the air pollution these vehicles cause. Since most vehicles in the region run on gasoline or diesel, they contribute significantly to the worsening air pollution in Southeast Asia’s cities. For example, increasing car ownership in Jakarta has worsened air quality there. Despite phasing out leaded gasoline 10 years ago, Jakarta’s air quality hasn’t improved by much. A study by the Faculty of Public Health University of Indonesia found that 58 percent of all illnesses among people living in the city were related to air pollution. With demand for automobiles increasing, this will only get worse.

Electric vehicles (EVs) could however change all that. EVs, including hybrid electric cars can drastically reduce carbon emissions released into the environment. Compared to conventional cars that release unhealthy amounts of carbon dioxide, carbon monoxides and nitrogen oxides into the atmosphere, battery-electric cars effectively produce zero-emissions from their tailpipes.

In a study commissioned by Nissan and carried out by research firm Frost & Sullivan, it was revealed that a third of Southeast Asian consumers are open to buying an electric car. Titled “Future of Electric Vehicles in Southeast Asia”, the study found that consumers in the Philippines, Thailand and Indonesia as the most enthusiastic about the future of EVs.

Incentives

ASEAN member states need to encourage their respective populations to switch to EVs. In the same study by Frost & Sullivan, respondents said that the best incentive to make them switch to EVs would be tax exemptions. While tax incentives usually mean governments would incur some sort of cost due to loss of tax revenue or having to bear the cost of subsidies, ASEAN governments need to realise the irreversible impact these vehicles are having on the environment.

Some ASEAN countries have already made a head-start in encouraging the use of EVs. To promote the use of EVs, the Thai government has drafted a ‘Electric Vehicle Promotion Plan for Thailand’ under its Thailand Alternative Energy Development Plan 2012-2021. As a result, Thailand went from having 60,000 hybrid passenger cars and 8,000 battery electric motorcycles that were registered in 2014 to a total of 102,308 hybrid cars and 1,394 battery electric vehicles.

Vietnam’s first car manufacturer, Vinfast is also planning to release EV’s of its own. Vinfast announced that it will produce 250,000 electric scooters a year and is planning to release its own electric car in the coming years.

Currently the region is also, rightly, investing in public transportation. Despite this, it is unlikely that the dependence on cars and motorcycles in the region would decrease. The reality is that many Southeast Asian cities are designed with cars in mind rather than public transportation. In Kuala Lumpur, the new Mass Rapid Transit (MRT) system has not reached its forecasted ridership despite the billions of dollars spent on the system. Also, a properly planned public transportation system could take years to develop. Many of the public transport infrastructure projects in the region will only be completed at the end of the next decade. For example, the first subway system in Manila is only expected to be completed in 2025. With this in mind, EVs could well be the immediate solution for the region’s transportation woes.

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