Asian Development Bank sees increased electric vehicle sales in region, recommends strategies
“Harness the momentum of electric vehicles to the full,” says the Asian Development Bank (ADD) in its “Electric Mobility Options for Developing AfDB Member Countrieswhich predicted and recommended both the rapid shift to electric vehicles in the region to stem both climate change concerns and rising fuel costs.
The report noted how the People’s Republic of China (PRC) has focused on producing and developing electric vehicles both in the small personal mobility space as well as developing battery and drivetrain technologies locally and in partnership with other car brands. As a result, over the past decade, the adoption of electrified vehicles in China is the highest in the Asian region at 16%, which translates to more than 4 million pure electric and hybrid vehicles.
Interesting way, Bloomberg reported that China has more than 350 million electric scooters, and the China Electric Vehicle Federation said that there are still about 100 million registered open, closed and pickup-type 3-wheel electric transport vehicles . There are more than 51,000 electric vehicle manufacturers in China. According to one estimate, in provinces with lax e-vehicle registration, about 200 million additional EVs are sold and used.
Six months after the release of the AfDB report, the ASEAN region is beginning to reinvigorate its entire vehicle manufacturing and distribution industry, bringing with it a nascent EV component whose growth has been truncated by the pandemic .
Auto industry experts from the ASEAN Automobile Federation (Association of Southeast Asian Nations) are adamant about the viability of electric transport in the region. The group said growth in electric vehicles will come first from private vehicle purchases before public transport. This theory is reflected in figures collected by the International Renewable Energy Agency which predicts that by 2025 around 20% of all vehicles on the road in Southeast Asia will be electric. To achieve this, the AfDB recommends a three-pronged strategy to pursue electric mobility in the region.
First, one is to focus initiatives and investments in electric mobility towards high-mileage commercial vehicles, including buses, taxis and delivery trucks, even electric motorcycles and transporters. In the Philippines, for example, the AfDB has invested some $300 million over three years to replace polluting 2-stroke tricycles, a popular form of last-mile transportation.
Public transport, such as the TransJakarta bus network in Indonesia, is a more viable and productive example. The diesel buses in this dedicated on-road train type system will be replaced by electric units. An electric bus will reduce the emissions of 40 fossil fuel cars or 110 motorcycles. The city plans to operate an all-electric bus system of over 14,000 e-buses by 2030.
AfDB’s prioritization proposal should be given where investments in electric vehicles generate the highest economic and environmental returns. In Jakarta, Indonesia’s main city, taxi service BlueBird launched a test fleet of 30 e-taxis in May 2019, and DAMRI, which operates the airport bus service, also plans to introduce progressively electric units. Large fleets of high-mileage vehicles that operate in cities allow faster payback of higher initial fixed costs.
Bangkok already has electric buses and taxis on its streets. A new innovation is to launch e-ferries, as rivers and tributaries are part of mass transportation systems.
Second, AfDB recommends cost-effective EV policies that support an ecosystem with adequate power infrastructure. This includes incentives to develop charging ports at existing service stations, shopping center parking areas and, for the public sector, fast charging along service routes, as electric buses can run on batteries smaller and shorter recharge times. Adequate electricity supply and adapting charging facilities to different vehicles are at the heart of the electric vehicle ecosystem, especially in ASEAN where the lack of a standardized plug-in policy and the influx of a variety of Chinese, Japanese, Korean, European and American electric vehicles means up to 8 different charger plug configurations.
The AfDB has also recommended the refurbishment of electric vehicle batteries to move from the high discharge environment of electric vehicles to solar or wind renewable energy storage once the batteries are no longer useful in electric vehicles – usually after 6 to 8 years. Development banks say this solves the environmental anxiety of battery waste and extends the economic utility of batteries, which could potentially cover the initial investment burden.
Since there is a correlation between the demand for electric vehicles and the price of fossil fuels, the AfDB suggests incentives “targeting high-impact vehicles in support of sustainable business models.” Although applied intensively for the public transport sector, this suggestion also reduces the demand for private vehicles, which can theoretically reduce traffic congestion.
Other subsidies that can have a direct impact on preference relate to non-monetary purchase and post-purchase incentives. For example, China subsidizes 65% of the purchase cost of electric buses. The Philippine Electric Vehicle Industry Development Act (EVIDA) offers incentives such as zero import duties, priority parking and subsidies for public charging infrastructure.
With the end of the COVID-19 pandemic and the recovery of recovering Asian economies, the time has come for an automotive industry electrification program, whether based on an all-electric or hybrid approach. Starting with large, high-use vehicles electrifying transport in ASEAN will help reduce greenhouse gas emissions by up to 50% by 2035.
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