Electric car-share scheme may cost $100m 'tax loss'

ST tracked down the Porsche involved in the test-bed programme to a private landed residential estate off Braddell Road.
Christopher Tan, The Straits Times AsiaOne 21 Feb 15;

The Government stands to forgo $100 million or so in tax revenue in an electric car-sharing scheme it hopes to launch from next year, according to calculations based on the approximate cost of such cars.

A Request for Information (RFI) by the Land Transport Authority and Economic Development Board that closes at the end of the month
seeks proposals for such a scheme, which was first announced last November.

RFI papers show the Government could exempt up to 1,000 electric cars from vehicular taxes (including certificate of entitlement premiums) for a car-sharing scheme that lasts up to 10 years.

Assuming the average open market value of an electric car in the fleet is $30,000 (many cost a lot more), the Government stands to forgo $100 million in upfront taxes, comprising additional registration fee, excise duty and an assumed COE premium of $60,000.

No road tax will be levied, but there will be an annual special tax of $1,600 on each car. That would work out to $16 million for 1,000 cars over 10 years.

According to the RFI, the operator will have to build a network of charging stations, but can apply for grants of up to half the capital expenditure.

If two charging stations are proposed per car, it would work out to 2,000 stations. That is deemed the minimum by industry players for an A-to-B system, where users need not return the vehicle to its pick-up point.

Based on conservative estimates, such a network would cost $14 million to $20 million, or $7,000 to $10,000 per charger. Fast chargers, which can charge a car up in less than 30 minutes instead of around eight hours, can cost 10 times as much.

The network has to be handed over to the Government at the end of the scheme, the RFI states.

A briefing last month for interested parties drew about 50 potential proposers from the automotive, infrastructure and car-sharing industries. There was mixed response from those who attended.

A European carmaker's top executive who declined to be named said: "A car-sharing scheme where users need not return the vehicle to its origin is already a difficult concept to implement.

"Making it 100 per cent electric adds to the complexity because (such vehicles) require charging stations."

If chargers were not part of the equation, the location of parking spaces can be changed to suit usage patterns over time, he explained. But with chargers already installed, the operator has to get it spot on the first time.

An executive from a local listed group noted the operator would have to pay for parking spaces, which can be hefty. Based on the Housing Board's season parking charge of $90 per month, the total cost for 2,000 spaces over 10 years works out to $21.6 million.

Among those who are more optimistic is Mr Christophe Di-Perna, Renault's Asia-Pacific head (electric and light commercial vehicles), who said the cost of the charging infrastructure could be lowered if one station with multiple charging cables could be set up. But even so, "there are still a lot of questions to be answered".

He said Renault is in talks with Autolib' - an electric car-sharing firm set up in Paris in 2011 - as well as other parties to participate in the RFI.

Car-sharing Association of Singapore president Lai Meng said the Urban Redevelopment Authority, JTC and HDB were setting aside several hundred parking spaces for the scheme.

"It's a good start," he said, adding that having around 3,000 spaces would be sufficient.

But it has to be a business case at the end of the day, he noted.

National University of Singapore transport researcher Lee Der Horng said usage charges must be reasonable if the scheme is to be run as a government-subsidised commercial operation.

The Land Transport Authority said the amount of cost exemptions will only be finalised when a tender is called for the project.

Two test-bed vehicles yet to be scrapped

Two electric cars granted tax exemption for a test-bed programme (2001 to 2010) have not been scrapped as required.

The two - a Porsche 911 sports car and a Toyota RAV4 sports utility vehicle - were converted to run on battery power alone. They were among 100 vehicles used in the Transport Technology Innovation and Development Scheme. The other vehicles were scrapped at the end of the test-bed programme.

In response to press queries, the Land Transport Authority (LTA) said owners of the vehicles "have yet to submit their disposal documents to us".

That means the vehicles have not been returned for around four years now, given that the test-bed programme pended in 2010.

For privacy reasons, the LTA would not name the owners. But The Straits Times tracked down the Porsche, a left-hand-drive model, to a private landed residential estate off Braddell Road. The LTA confirmed that there was only one left-hand-drive Porsche 911 in the test-bed programme.

According to past press reports, the car was converted to run on electricity for Mr David Chou, managing director of electric car start- up EV Hub.

Mr Chou could not be reached for comment.

It is not known immediately who owns the electric RAV4, but a local technopreneur who dreamt of making electric cars with a range of 900km had brought one in six years ago to garner interest in his venture.

An LTA spokesman said it is investigating the two cases.

Meanwhile, another test-bed scheme started in 2011 involves an additional 100 tax-exempt cars.