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Electric cars are coming. How soon?

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In the wake of Britain’s recent decision to ban the sale of petrol and diesel vehicles after 2040, reactions from petrol-heads and environmentalists have often been extreme.

How does this decision affect electric cars?

It is highly unlikely The US federal government will make a similar announcement in the short term, but we probably should look to what California does. By itself California is the world’s eighth biggest economy, and where it goes with regulations about cars, the rest of the world’s biggest economy tends to follow: California banned lead additives in petrol in 1992, and they were subsequently banned in the rest of the US in 1996, and now only three countries worldwide still allow lead additives in fuel. (Actually, Norway beat everybody with this, banning lead additives in 1988. More on Norway later.) 

California aims to have 1.5m electric vehicles (EVs) on its roads by 2025, and what is currently America’s largest car company by market capitalization – Tesla – is also headquartered there.

But decrees from the top can’t drive consumer sentiment – if people don’t want electric cars, then car companies will have trouble selling them. It doesn’t seem a problem for Tesla, with a 12- to 18-month waiting list for its recently released Model 3. Perhaps we should put that down to Tesla CEO, Elon Musk, and his showmanship. 

Mainstream manufacturers GM, Ford and Nissan all have electric car offerings available in the US, but they don’t seem to generate the same hype. 

What does this mean for motorists in Singapore?

  • A pilot scheme testing EVs here from 2011 to 2013 concluded that EVs suit Singapore’s driving conditions – where the average daily driving distance is 55km, well within the range of most EVs – but that the higher purchase price and lack of charging facilities are a barrier to more widespread adoption.
  • Bosch eMobility Services currently operates around 20 public charging stations across Singapore, home charging is more the preserve of landed property owners.
  • Taxation policy can be tweaked to encourage buyers to opt for EVs, but the Vehicular Emissions Scheme (from January 1, 2018), only offers a rebate of $20,000 off the Additional Registration Fee for zero emission vehicles. Currently, this is not enough to offset the higher Open Market Value of typical EVs.
  • For now – as is the case with Singapore’s sole Tesla, privately imported by an Internet research firm executive – EVs are likely to remain the province of early adopters.
  • BMW’s innovative i3 electric car has seen more than 100 sales in Singapore, all of which have been equipped with the Range Extender – an on-board petrol generator that addresses customer anxiety about the availability of charging stations. Apparently even early adopters have some doubts.
  • It also appears the government is relying on market forces to bring the costs of EVs down. Parallel importers do offer the Nissan Leaf – the world’s most popular EV – here, but at about a 50% premium over similarly-sized petrol-driven cars. Nissan offered it officially during the pilot scheme and sold a limited number of units, but the official agent for mass retail sales does not currently offer it.

What does the future hold?

Predicting the future is a dangerous business, but some sources suggest pricing parity between petrol and electric cars will be reached in the early 2020s.

But the electric revolution is definitely coming – the number of EVs on the world’s roads topped 2m in 2016, up from 1m in 2015, according to the International Energy Agency. 

In oil-exporting countries you’d expect the take up to be lower, but Norway – the world’s 10th biggest oil exporter – is also the world’s biggest market for EVs by market share: 29% of new vehicles sold there are electric.

If you don’t believe EVs are likely to make a bigger impact here in coming years, just remember unleaded petrol…

For more motoring analysis, news and tips, look out for regular posts in this series. 

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