In an interview with CNA938’s Singapore Today co-hosts Lance Alexander and Daniel Martin, KPMG in Singapore’s Sharad Somani discusses the rising adoption of electric vehicles (EV) in Singapore as well as future advancements, and the potential usage of hydrogen cars. Sharad also highlights areas for Singapore to focus on to boost renewable energy transition.


CNA938: Tell us about Singapore's electric car adoption is it on a positive slant upwards?

Sharad: Electric car adoption is indeed increasing. Recent statistics show that close to 15 percent of total car sales are electric, up from the previous 12 percent—an upward trend. The question arises: Is this growth rate fast enough? If not, why? Range anxiety emerges as a critical barrier. Many people fear they won't find charging stations within the 250 to 300-kilometer range, posing a challenge. This dilemma creates a chicken-and-egg situation: while there's a commitment to roll out 40,000 stations by 2030, the speed of implementation in the short term will determine uptake.


CNA938: How does Singapore's 15 percent electric car adoption rate compare to other first-world economies?

Sharad: Looking at the European region for example, Singapore has catching up to do in general. However, upon closer inspection of the incentives being offered, Singapore already provides several incentives similar to those in the Europe region. Specifically, upfront subsidies to defray the high cost of EVs vis-a-vis internal combustion engine (ICE) vehicles are comparable. Additionally, the rollout of charging stations is progressing at a similar pace to that of other countries.


CNA938: What do you think of these hybrid cars – part electric and part ICE.  Are they good for the environment? Because some people like buying them especially in Singapore.

Sharad: Hybrid vehicles are a good transition option. However, in the long term, our focus must shift to the cleanest energy vehicle available: the EV. Firstly, concerning battery technology, we anticipate significant advancements in the next three to five years. It's likely that EV car ranges could reach up to 500 kilometers, providing drivers with the assurance comparable to conventional cars. Secondly, battery costs have substantially decreased, with an 85 percent reduction in recent years. By 2030, we expect batteries to be highly cost-competitive, making EVs a more efficient and economically viable option compared to both ICE and hybrid vehicles.


CNA938: Has the high Certificate of Entitlement (COE) cost in Singapore impacted electric vehicle (EV) adoption?

Sharad: Singapore remains steadfast in its car-lite policy. However, by 2040, there will be no internal combustion engine (ICE) vehicles on the road since Singapore’s commitment is to transition fully to electric vehicles (EVs) by that time. This implies that by 2030, consumers will cease purchasing ICE cars, a decade ahead of the full transition. The question arises: over the next six years, consumers may still prefer ICE vehicles due to concerns such as range anxiety and cost. While subsidies and incentives may offer short-term benefits, they are not indefinite. In the long term, as per Singapore's guidelines, consumers will ultimately transition to EVs.


CNA938: Do you think hydrogen could be the future for vehicles instead of EVs or ICE? Could we see hydrogen-powered vehicles on our roads soon? Considering that the byproduct is water, is this environmentally beneficial for all of us?

Sharad: We see hydrogen-powered cars gaining traction and some commercial vehicles are being tested. However, we need to explore the ease of procurement, storage, and handling of hydrogen. The cost of hydrogen, even for shipping and the power sector, is quite prohibitive. Therefore, in the short term, hydrogen may not be comparable in terms of both cost and technology. Nevertheless, it is being investigated as a potential competitor to EVs. We predict that once the technology matures, EVs and hydrogen will coexist in the future.


CNA938:  Could EVs and hydrogen cars really coexist? How will this impact car manufacturers?

Sharad: Looking ahead, we believe in the potential for both technologies. Reflecting on the past, EVs took some time to gain traction but are now mainstream, with most major manufacturers investing in EVs. If hydrogen technology becomes commercially competitive in the coming years, we believe it will take another ten years to establish the ecosystem for widespread adoption. There are differing opinions on this matter, considering factors such as the lifecycle of carbon emissions and battery technology. We anticipate significant advancements in battery technology in the coming years, with new sodium and high-density batteries reshaping the landscape.


CNA938: Could we discuss Singapore's broader ESG goals and the implications of the COP28 deal on fossil fuels? Are there specific areas within the Singapore budget where investments could be directed to enhance energy capacity by 2030?

Sharad: The top three takeaways from COP28—tripling renewable energy, doubling energy efficiency, and phasing out of fossil fuels—signal important shifts. While Singapore is implementing initiatives aligned with these goals, more action is needed. Singapore's focus on importing low-carbon power and establishing the Future Energy Fund are positive steps forward. However, greater efforts are required to promote sector-wide decarbonisation and enhance energy efficiency across industries. This includes increasing support for funding, sharing use cases, and capacity development, particularly in hard-to-abate sectors like steel and SMEs in manufacturing and technology. Southeast Asia's heavy reliance on coal underscores the need for collective action to retire coal plants early and transition to renewable energy and low-carbon solutions. This transition not only facilitates sectoral decarbonisation but also stimulates the growth of the decarbonisation industry in Singapore and Southeast Asia. Therefore, there is significant room for further action in this regard.


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