Incentivising SMEs to Lease Electric Vehicles for Commercial Use

Mr Saktiandi Supaat asked the Minister for Transport whether the Government will roll out schemes to incentivise SMEs to pivot to renting electric vehicles for commercial use, in view of Singapore’s Green Plan and climate ambitions.

Mr Speaker, the Government has implemented incentives, such as the Commercial Vehicle Emissions Scheme (CVES) and Early Turnover Scheme (ETS), to encourage electric Light Goods Vehicles (e-LGV) purchases, including purchases by vehicle rental companies.

The adoption of e-LGVs in Singapore has grown significantly – from 0.4% of new LGV registrations in 2020, to around 28% this year, to date. This is the highest among all vehicle categories. We will continue to monitor and review the efficacy of and the need for any additional incentives.

I thank the Minister for the answer. I have two supplementary questions for the Minister.

The first is whether there are any specific sectors he is targeting for the electric vehicle (EV) transition for both motor vehicles as well as motorcycles.

The second is with regard to EV motorcycles. Just yesterday, I had a resident who is an SME owner and trying to sell electric motorcycles in Singapore. He has concerns about the ability to rent out his motorcycles for commercial use or even private use going forward. My question is whether the Minister can shed some light on which agencies would be appropriate to help such approaches in terms of renting electric motorcycles in Singapore going forward.

Mr Speaker, I thank the Member for his questions. Do we target specific sectors? The answer is no, but with an important qualifier. Basically, because when you make a transition from Internal Combustion Engine (ICE) to electric, there is a general benefit to the overall ecosystem in terms of emissions reduction. However, of course, in certain sectors where the utilisation of the vehicles may be more intensive, if the conversion can take place earlier and to a greater extent, then the beneficial outcomes will also be similarly enhanced.

So, from that point of view, for example, we are seeing moves in the taxi and also the bus fleets – we have announced that 50% of our bus fleet will be fully electric by the end of the decade and so on – because these are where there are emissions that might be more intensive because of usage patterns.

In addition, I would say it is also a function of technology because, for example, in the realm of very heavy vehicles, adoption and usage have been varied when it comes to electrification. In fact, other solutions, like hydrogen, appear to be gathering momentum. So, we will have to wait and see.

But the broad answer would be that we are not targeting specific sectors. Rather, we are focused on just promoting the general adoption of and transition to EVs and, eventually, to other cleaner energy forms.

On the second point on EV motorcycles, I must first point out that, today, plug-in solutions already exist. There are motorcycles that can use plug-in recharging and so on, and that already is there. But this, generally, tends to be in the higher power output type of motorbikes. For the broad mass, at the moment, there are different models. Battery swapping is one solution that is being promoted and the challenge with these sorts of solutions is the safety consideration. Because we want to ensure that if batteries can, in fact, be removed from the vehicle and taken to whichever premises, including residential premises, then the attendant risks, including fire hazards, increase as well. And so, we want to be very careful about this.

What we have done is to commence some trials with partners. For example, it brings together the supplier of the motorcycle, the supplier of the charging solution, the user of such motorcycles, like a delivery company and so on, and we have two such trials taking place. On the specific point raised by the Member, the agency that is coordinating this effort is LTA and, if there is a specific query, I would be very happy to ask LTA to follow up on it.