Who will pay for the electric car future?

Published October 5, 2021, 12:05 AM

by Manila Bulletin

Editorial

Filipinos are among the most excited in Southeast Asia to switch to electric vehicles (EV). This was the finding of a Nissan-commissioned study by Frost & Sullivan in 2020, titled “The Future of Electrified Vehicles in Southeast Asia.” Forty-five percent of Filipino car drivers state they would certainly consider an electrified vehicle as their next car purchase within the next three years.

Thankfully, we have a group of advocates working to make this a possibility. The Ninth Philippine Electric Vehicle Summit (PEVS) organized by the Electric Vehicle Association of the Philippines (EVAP) touched on updates about several developments hoped to encourage EV adoption in the country.

Over the two-day online summit, the PEVS shared key developments like the recent Senate and House of Representatives’ respective versions of the Electric Vehicle and Charging Stations Act to encourage development of EV charging stations nationwide. The Land Transportation Office has also released guidelines for the classification and operation of EVs to ease their registration. The House of Representatives also filed a bill to establish local EV manufacturing. Anticipating more dependency on the grid, Meralco is already planning to shift its power generation to more renewable resources. These are all well and truly appreciated, but their effects may only be felt five years to a decade down the line.

So what’s stopping electric cars from roaming our streets now? Price.

Electric vehicles on sale in the country today cost two to three times as much as a conventional car of the same size. They are already imported into the country without tariffs or excise tax, yet this is not enough to offset the high cost of the batteries and electronics they come with.

Their success in countries like the US, Europe, and China is owed largely to government subsidies that further reduce their price, putting them nearly at par with conventional vehicles.

Yet with so much spending on infrastructure and the current pandemic, it’s clear the government is already too strained to offer a similar incentive. The EV providers, on the other hand, have invested in equipment and training to maintain, service, and charge this new breed of vehicles.

Perhaps the only questions that remains unanswered is, “Who will cushion the blow of the high price?” Electric vehicles do promise cleaner motoring thanks to a lack of emissions. With regard to charging, the cost of electricity used is comparable if not cheaper than fossil fuels to travel the same distance. While there may not be that many charging stations, Nissan has noted that the average commute is only 10-14 kilometers. With a range of at least 200-300 km, these EVs can be used for a whole week without needing to charge. That certainly amounts to savings in the long run, but it’s still a hefty initial investment for any private citizen.

There’s no question that the dream of switching to clean electric cars is one worth pursuing. Yet either the government or stakeholders will have to absorb a massive portion of the car’s sticker price to make it appealing to consumers. Without it, electric vehicle adoption will continue to be slow.

 
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