Although Tesla founder Elon Musk previously called out the Singapore government for its unwelcoming attitude towards electric vehicles (EVs) years ago, it has since completely changed its stance.
Fast forward to today, the EV landscape in Singapore has changed dramatically as the government ramps up its initiatives to boost local EV adoption.
As part of the Singapore Green Plan 2030, the government said it would “make it easier to buy and own” EVs.
The government also highlighted its plans to expand the EV charging infrastructure to 60,000 by the end of 2030. This is more than double the original target of 28,000.
In the recent Budget 2021, Minister Heng Swee Keat also announced that the government is setting aside S$ 30 million for EV-related initiatives.
As Singapore gradually transitions towards phasing out internal combustion engine (ICE) vehicles by 2040, how are the various car companies reacting to this move?
Vulcan Post reached out to four different companies in the industry — particularly car rental companies and used car marketplaces — to suss out their thoughts on this and how they are preparing for this transition.
Unanimous Support Towards EV Shift
Carsome is touted to be Southeast Asia’s largest integrated car e-commerce platform with presence in Singapore, Malaysia, Indonesia and Thailand.
It aims to digitalise the region’s used car industry by reshaping and elevating the car buying and selling experience, providing end-to-end solutions to consumers and used car dealers.
Benjamin Koellman, Chief Operating Officer of Carsome, sees the phasing out of ICE vehicles as an “exciting industry update, not only for Singapore but also for Southeast Asia.”
He noted that many countries in the region such as Indonesia and Thailand are also announcing plans to adopt EVs.
This signals optimism that SEA will work towards cutting emissions and actively fighting climate change as per the United Nations’ Paris Agreement within the next decade.
Carro on the other hand, is described as Southeast Asia’s largest automotive marketplace. It leverages artificial intelligence (AI), technology and automation to offer a full-stack service for all aspects of car ownership.
Aaron Tan, founder and CEO of Carro, describes the initiative to phase out ICE vehicles as an “admirable act” and a “forward-thinking move” by the government to create a clean transportation system, representing an investment in Singapore’s future generations.
As the world shifts towards being more mindful of the environment, sustainability will be a key economic theme for many countries and businesses, including those in the auto industry.
– Aaron Tan, founder and CEO of Carro
Tomoya Ryuse, director of Car Club Singapore, shares the same sentiments. Acknowledging that the EV technology is inevitable in the future, he “welcomes” this initiative.
“We are in tune with the government’s direction, and are also excited to create new transportation value together with our customers. We are (also) always proud to contribute to a more sustainable society,” he added.
Car Club Singapore’s core business lies in short-term car-sharing. It utilises a pay-per-use model that starts from an hour, and the service is fully automated by its mobile app.
It is also a technology enabling company which supports other businesses in the mobility sector such as with its fleet management technology.
Adrian Lee, co-founder of Tribecar, also expresses his excitement on this move towards green vehicles, or EVs in particular.
“As an engineer myself, EVs make absolute sense — less parts means less problems, and yet, it has better performance and better eco-footprint,” he said.
The local car-sharing company is said to be the “pioneer of affordable door-step mobility)”, providing low-cost access to a multitude of vehicles for leisure and commercial usage to drivers.
They came up with the concept of car-sharing rental on an hourly basis to cater to the use of ride-hailing in Singapore, and to address the pain points of customers due to the pandemic which has drastically changed consumer lifestyles and habits.
Their Core Business Model Will Remain Unchanged
Carsome’s core business model is aimed at helping consumers sell (consumer-to-business) and buy used cars (business-to-consumer) in a trusted and convenient manner.
The transition to EVs opens up a new market opportunity for us. Cars in Singapore typically have a lifespan of ten years. Given the renewal for COE, it will give car owners considerable thought when approaching the end of the ten-year cycle.
– Benjamin Koellman, Chief Operating Officer of Carsome
He added that concurrently, we will continue to see automakers gradually phase out ICE vehicles in their markets in favour of EVs by 2040.
The EVs will then enter the used car market approximately three to five years after their introduction into the new car market. And by 2040, we would have phased out sales of ICE vehicles in its entirety.
Echoing this sentiment, Aaron said that the phasing out of ICE vehicles will also serve as a business opportunity for Carro.
As the government rolls out incentives to encourage adoption of EVs, demand for ICE vehicles will drop. Prices are likely to fall as well, as dealers focus on clearing their stock and consumers prepare to make the switch.
We will likely see more activity on our platform with more ICE vehicles being listed for sale as we near the end of the phase-out exercise. Come 2040, I anticipate that most of the cars being sold on Carro will be EVs.
– Aaron Tan, founder and CEO of Carro
Regardless, their role as an automotive tech player does not change — it will continue to support both buyers and sellers with new products that cater to to evolving driver needs.
“While the types of cars on the road may change, the fundamentals of car buying and selling are still relevant today — consumers and businesses look for transparency, convenience and safety,” stressed Aaron.
“We (will) continuously innovate and ramp up on digital technologies and strategic partnership with enablers to expand our platform and offerings to create new ways to buy or sell a car.”
While Carro does not foresee significant changes to their business model in the short to medium term, they anticipate changes in its current processes and will adapt accordingly to the adoption of EVs.
For instance, they will review what are the things to look out for when assessing an EV’s condition, as well as the factors that need to be taken into consideration when determining the pricing of a used EV.
Tomoya also said that despite Singapore’s move to phase out ICE vehicles, Car Club’s main focus will remain the same: “designing a safer, more convenient and suitable transportation model for all”.
Where necessary, it will definitely consider shift from ICE to EV, or any other transportation model depending on the market and customers’ demands and needs.
We’re always ready to adapt and transform our current business model and fleet to suit the government’s initiative or the consumers’ preference.
Our main mission is to always create new value propositions for the Singapore’s mobility space. So by and large, we are always willing to take up new challenges such as to switch to a new EV platform when the time comes.
– Tomoya Ryuse, Director of Car Club Singapore
Sustainability Is Already A Part Of Their Business Plan
According to Adrian, Tribecar is one of the original commitment signee to the Land Transport Master Plan (LTMP) 2040 since it was first announced in May 2019.
Along with some other car rental companies, Tribecar has committed to making their entire fleet run on cleaner energy by 2040.
“Since 2019, 30 per cent of our fleets are now hybrids and 10 per cent are clean diesels (Euro 5/6). I would say that we are ahead of our own schedule to go green,” said Adrian.
He added that car-sharing services like Tribecar are by nature, well-aligned with the green movement.
“While private cars are only used by one driver, our vehicles are shared amongst up to 30 households in a housing estate per vehicle,” he explained.
“Our service (one free membership, many types of vehicles) is a real viable alternative to commuters who seek private transportation for their journeys.”
By 2040, he envisions that pure sharing (ie. not privately-owned platforms) like Tribecar and BlueSG will take centrestage and be a core part of a commuter’s lifestyle.
With the green strategies Tribecar already has in place, Adrian is confident that they will not be majorly affected by the phasing out. In fact, they expect to be “green” well ahead of the rest of the car-sharing industry.
In our opinion, the Land Transport Authority (LTA) has made correct bets that the market will correct itself as green vehicles will reach price parity with ICE vehicles by mid 2020s. Once the economics makes sense, our fleet partners will without a doubt buy in green vehicles over ICE vehicles.
Furthermore, we are exactly two COE cycles away from 2040. This means that we will have plenty of time for fleets to phase out ICE vehicles and for consumers to get used to green vehicles.
– Adrian Lee, co-founder of Tribecar
However, he expressed some concerns over motorcycles.
Tribecar has temporarily stopped increasing their motorcycle fleet because there are not a lot of suitable Euro 4/5 motorcycles in Singapore.
“This is due to the fact that the demand in neighbouring countries where the manufacturing plants are, are less eco-minded as compared to Singapore’s regulators,” explained Adrian.
Some Have Plans To Push Out EV-Related Services
Tribecar has been working with multiple local and overseas vendors since 2018.
With the government’s recent big push towards electrification, it has seen big bets by many industry players such as manufacturer dealers and vendors shifting to EV.
Tribecar is doing the same too, said Adrian, adding that they are in a “good position” to provide a transition platform for Singaporeans to try out EVs.
As individual owners are unlikely to have access to a charger point in the coming months, (or) even possibly a year. We have plans to put in place a charger and a full-sized EV so the masses can try out such a service.
The economics may not fully make sense given the capital expenditure, but we are happy to absorb the cost and provide an educational platform for the community.
– Adrian Lee, co-founder of Tribecar
Tomoya on the other hand, feels that car-sharing as a whole, must adapt to such change. In fact, they have already started a trial to offer its members EVs.
“If the demand is great, we will expedite and build a robust platform for our members to have this option in the future,” he said.
“We’re all ready for the challenge to incorporate EVs into our fleet and create new value for our customers in the mid- to long-term.”
What Needs To Be Done For A Seamless Transition Towards EV
For many years, ICE vehicles have been the norm for businesses and consumers to use in their everyday lives. Phasing it out would affect every stakeholder in the ecosystem, not only the auto marketplace players.
As such, careful considerations will have to be introduced to ensure a smooth transition towards a sustainable Singapore.
“It is important to have a well thought-out plan in place to avoid shocking the system too much, creating resistance or backlash,” warned Aaron.
As such, he urges the government to have open dialogues with all stakeholders and take multiple viewpoints into consideration to build a comprehensive plan of attack.
“This will ensure that all bases are covered and the transition towards a sustainable Singapore can be as frictionless as possible.”
To prepare for this shift towards EV, he said there needs to be a strong focus on education. Information must also be made available to prepare all stakeholders in the ecosystem and shape new services that can support a fully EV auto industry.
True change will require co-innovation from all sides, so we will continue working closely with our dealer partners and listening to customer feedback to ensure we are serving the right needs.
Carro remains brand agnostic and nimble to the auto industry’s trends. If consumers gravitate towards adopting EVs, we will be well-positioned to adapt to the demand when the time comes.
– Aaron Tan, founder and CEO of Carro
Tomoya agrees that education is necessary, and feels that more people need to come onboard the EV movement.
While the EV landscape in Singapore is growing steadily now, he finds that the whole infrastructure and accessibility can be improved.
“On the whole, EV for short-term usage is very sustainable and easy to use. From our point of view, all drivers should always try them out and experience EV for themselves. We see this as an opportunity for us,” said Tomoya.
Opportunity For Disruption In S’pore’s EV Market
Although Singapore was listed as the top country for autonomous readiness in 2020, Adrian feels that we are still lagging behind in terms of EV development as compared to the US and China.
“This can be attributed to how our population is being distributed in Singapore. The fact remains that 80 per cent of our population stays in HDB (flats).”
“It is a herculean effort by private-public enterprises to rewire a good portion of multi-story car parks for EVs. We see the biggest and quickest change to come through commercial EV usage.”
Benjamin finds that Singapore is a “relatively ideal market” for EVs, given its modern infrastructure, short driving distances and low speeds.
While he understands that many consumers are worried about EV’s perceived lack of range, he feels that it should not be a concern for most drivers in Singapore, especially since the government is increasing the number of EV chargers.
Innovation around a nationwide charging infrastructure and an enhanced consumer experience will be critical enablers for this successful transition.
There needs to be a synchronised and well-balanced rollout between infrastructure, consumer demand, consumer awareness and education, and all-aspect technical support of EVs in Singapore.
– Benjamin Koellman, Chief Operating Officer of Carsome
These already provide an abundance of opportunities for disruption,” he noted.
While Singaporeans are becoming more receptive towards EV now (due to the greater sustainability awareness and attractive pricing), Aaron feels that many still think of it as a form of “luxury”.
This perception will unfortunately inhibit its growth as Singaporeans remain thrifty in a post-pandemic world to safeguard against future volatility.
I foresee that the EV market will only start registering exponential growth when the sustainability mindset really takes off and people recognise that EVs are the future.
Once EV adoption grows in Singapore, there will be a high demand for specialised maintenance services for EVs.
– Aaron Tan, founder and CEO of Carro
This is another opportunity for disruption that could arise from the upcoming EV revolution.
Strategic partnerships between the public and private sectors will enable both to capitalise upon this opportunity and provide customers with a better experience.
There will also be more opportunities for innovations in green energy to enter the auto industry.
While Carro fully supports the government’s initiative to phase out ICE vehicles, consumers’ shift towards EV is gradual and will take a long time.
Particularly, the EV charging infrastructure in high-rise Singapore will need to be developed further to provide adequate support for EV users.
Fortunately, developments in this sector are progressing well.
Tesla’s relaunch in Singapore has included plans to set up an EV charging network. OCBC Bank has also recently partnered with local firm Charge+ to encourage property development customers to install EV charging points in their premises.
“We expect to see more partnerships and industry players contributing to Singapore’s “green” transport movement and encourage the adoption of EVs,” said Aaron.
Featured Image Credit: Pixabay
