Singapore is expected to have the highest share of passenger electric cars (EVs) in Southeast Asia by 2040, according to BloombergNEF.
This projection comes as no surprise given Singapore's strong commitment to sustainability and its ambitious plans to phase out internal combustion engine vehicles. The city-state's compact size, well-developed infrastructure, and tech-savvy population make it an ideal environment for widespread EV adoption. Furthermore, the government's proactive approach to incentivizing EV purchases and investing in charging infrastructure has played a crucial role in accelerating the transition to electric mobility.
According to the estimate, by that year, 80 percent of all passenger vehicles in the country will be electric, compared to a regional average of 24 percent. Thailand is expected to take second place with 41% of the market, followed by Vietnam (31%), Indonesia (25%), Malaysia (15%), and the Philippines (10%).
The varying adoption rates across Southeast Asian countries can be attributed to several factors, including government policies, economic conditions, and consumer preferences. While Singapore leads the pack, other nations are also making significant strides in promoting EV adoption. Thailand, for instance, has been actively courting EV manufacturers and implementing supportive policies to boost its domestic EV industry. Vietnam's rapid economic growth and increasing environmental awareness among its young population are driving its EV market forward.
Singapore had the greatest EV adoption rate among the six Southeast Asian countries in 2023, accounting for almost 19% of all vehicles sold. According to Land Transport Authority figures, electric vehicles accounted for 32.1% of new car registrations in the first seven months of 2024.
The Republic has the highest density of public EV charging stations in South-east Asia in 2023, with one charging station for every three EVs. In Thailand, there was one public charger for every 16 electric vehicles. Malaysia had one for every 38 electric vehicles (EVs), while Indonesia had one for every 42.
BloombergNEF stated that dropping battery prices are "key to EV adoption" in its 2024 analysis on the region's EV forecast. The cost of producing batteries can vary based on the availability and pricing of raw materials and other components, as well as supply-and-demand conditions. This is because batteries are the most expensive component of electric vehicles, according to the report's author, Ms Komal Kareer.
"Falling battery prices will reduce the upfront cost of the vehicle... and make EVs competitive with gasoline(-fuelled) vehicles," said Ms Kareer, who studies clean transportation in South and Southeast Asia.
She stated that "a dearth of electric models that can compete with these prices (of fossil fuel-powered cars) as well as deliver the desired performance" is a major barrier to EV adoption. Once the overall number of batteries on the market doubles, battery prices will decline by 17%.
Between 2010 and 2023, battery pack prices plummeted by 90 percent.
This dramatic reduction in battery costs has been a game-changer for the EV industry. Technological advancements, economies of scale, and increased competition among battery manufacturers have all contributed to this price drop. As battery technology continues to improve, we can expect to see EVs with longer ranges, faster charging times, and even lower prices. This trend is likely to further accelerate EV adoption across Southeast Asia, making electric vehicles an increasingly attractive option for consumers.
In 2023, annual passenger EV sales in Southeast Asia increased for the second year in a row, thanks to supportive regulations and the expanding presence of Chinese carmakers in the region, which has been aided by subsidies and tax cuts.
For example, major Chinese automakers such as BYD, Great Wall Motor, and GAC Aion have manufacturing plants in Thailand, the region's largest EV market, with sales expected to increase more than fourfold to 86,383 units by 2023. In 2023, more than 153,500 passenger electric vehicles were sold in Southeast Asia, with Singapore accounting for 5,734. This figure depicts plug-in hybrids.
Associate Professor Walter Theseira, a transport economist at Singapore University of Social Sciences, told The Straits Times that the forecast that Singapore will have the biggest share of passenger EVs in Southeast Asia by 2040 is "not extraordinary".
"The Singapore vehicle market is quite different from that of regional countries, and there are factors here that make EV adoption much more extensive," Prof. Theseira explained.
Singapore's increasing EV adoption rate is primarily due to the certificate of entitlement system, which pushes car owners to turn in their vehicles every ten years. In contrast, most other countries in the region maintain their automobiles for more than ten years or sell them on the used market until they are no longer economically viable to use, according to Prof Theseira.
When combined with rules that support EV use, such as no new diesel-powered cars or taxis being registered in Singapore after 2025, it is not unexpected that Singapore's EV adoption rate is far higher than the regional average, he noted. Prof Theseira also mentioned the availability of charging infrastructure, which has both "pluses and minuses".
"Singapore is very compact; no one would seriously have 'range anxiety' in Singapore," he said, alluding to the concern that an electric vehicle would run out of charge.
On the other hand, most people "must rely on chargers that are controlled and installed by others. It depends on where you live and the surrounding infrastructure," Prof Theseira said, adding that "only a very small fraction of people would be able to install chargers in their homes."
The issue of charging infrastructure highlights the importance of urban planning and public-private partnerships in facilitating EV adoption. While Singapore's compact size mitigates range anxiety, the limited availability of private charging options underscores the need for innovative solutions. Some cities are exploring alternatives such as battery swapping stations, wireless charging roads, and integrating EV charging into existing infrastructure like streetlights. These approaches could help overcome the challenges associated with charging in densely populated urban areas.
In terms of public bus electrification, the governments of all six nations covered in BloombergNEF's analysis have set adoption objectives for electric buses, with Thailand leading the region's installations in 2023.
The Bangkok Mass Transit Authority, a government-owned public bus firm, intends to deploy 3,390 electric vehicles over an undefined period, while private bus operator Thai Smile Bus has the right to run electric buses on 123 routes throughout Bangkok, including round-the-clock service.
Thai Smile Bus has 2,100 electric buses in Bangkok and surrounding areas in 2023, with another 1,000 planned for 2024. In Jakarta, the Indonesian government intends to electrify 50% of its public bus fleet by 2027. Singapore has a similar objective, with plans to power half of its 6,000 public buses with electricity by 2030 and all public buses with cleaner energy by 2040. Malaysia's largest bus operator, Rapid Bus, wants to electrify 30% of its fleet by 2030.
Singapore aims to have all automobiles running on cleaner energy by 2040. Since 2030, all new car and taxi registrations must be for cleaner-energy models. Singapore's Green Plan envisions 60,000 EV charging sites by 2030.
The electrification of public transportation is a critical component of Southeast Asia's broader efforts to reduce carbon emissions and improve air quality in urban areas. Electric buses not only contribute to lower greenhouse gas emissions but also offer quieter operation and potentially lower maintenance costs in the long run. As cities across the region invest in electric bus fleets, they are also creating opportunities for local manufacturing and job creation in the green technology sector. This shift towards electric public transportation is likely to have a ripple effect, influencing consumer perceptions and accelerating the adoption of electric vehicles in the private sector as well.
