What can Singapore do to be the global leader in autonomous vehicles?

Can Singapore be global leader in autonomous vehicles?

This was first published in The Business Times on 09 April 2019

Satyanarayan Ramamurthy

Partner, Head of Infrastructure, Government & Healthcare, Head of Strategy, Advisory, Global Co-Head of Public Transport

KPMG in Singapore


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AVs: Ripe for take-off

If there is a time for autonomous vehicles to take off, it is now.  

For the second year running, Singapore was ranked second in the world behind the Netherlands and first in Asia to be ready to embrace autonomous vehicles in the 2019 KPMG’s Autonomous Vehicle Readiness Index (AVRI).

The rankings illustrate that autonomous vehicles are no longer just a possibility, but an imminent reality for all of us living in Singapore.

Source: KPMG Autonomous Vehicle Readiness Index 2019

Source: KPMG Autonomous Vehicle Readiness Index 2019

Indeed, AVs not only mark the beginning of an era of future mobility, they are also better for the environment and the consumer. In the long run, costs are saved on fuel and there are fewer maintenance requirements than a conventional vehicle.

According to the 2019 AVRI, driving Singapore’s preparedness in AVs are its strengths in policy and regulation, high consumer acceptance and readiness in infrastructure.

This is evident through recent developments such as the launch of the first AV bus by Volvo and Nanyang Technological University (NTU), and the publication of Technical Reference 68 (TR 68), which are a set of national standards for developing and deploying AV technology.

Singapore is also currently serving as an excellent test-bed for AV technology, although in the area of technology and innovation, there is still room for improvement, particularly, attracting AV-related technology headquarters to be established here.

However, Dyson’s recent move to relocate its global headquarters to Singapore and set up an electric vehicle (EV) factory on our island are testament to the fact that the nation has what it takes to create a market for AVs. Dyson’s move will also pave the way in attracting more AV-related technology companies to base themselves here, and use Singapore as a testing ground for AV technology. In turn, the high costs associated with being headquartered in Singapore can be offset through incentives in other areas.

EV a precursor to AV: how can Singapore drive uptake?

Despite great strides made in AV regulation and infrastructure, uptake of EVs in Singapore still remains low.

In 2018, EVs, represented less than 0.1 per cent of all vehicles in Singapore. The upfront cost and inconveniences of owning an EV in today’s Singapore have been singled out as key reasons for low adoption.

Presently, even as progress is being made to increase the availability of more affordable models, EVs are still estimated to cost around 20 to 30 per cent more than cars that run on petrol.

The lack of charging stations around Singapore and the uncertainty around the lifespan of vehicle parts such as the battery and the availability of replacement parts also pose concerns to consumers.

In light of these challenges, a three-pronged approach can be considered to increase ownership of EVs.

Firstly, an Early Turnover Scheme (ETS) for passenger vehicles could be implemented.

Similar to the existing ETS which encourages replacing older diesel commercial vehicles with more environmentally-friendly alternatives, a new ETS encouraging people to convert passenger vehicles to EVs could be rolled out over the next few years as the availability of charging infrastructure and access to affordable post-sales services improve.

Secondly, improving public awareness of EV technology to bring clarity and alleviate concerns on owning such a vehicle in Singapore is key to changing existing misconceptions.

For instance, range anxiety where a person driving an electric car worries that the battery will run out of power before the destination or a suitable charging point is reached, is often cited as a reason why many are reluctant to buy electric vehicles. However, this should not be a major concern in Singapore as the average mileage for a standard electric car on a full charge is around 270km1, considerably further than the average daily mileage for a common vehicle at 40-45km2.

As to concerns relating to EV battery longevity, longer warranties covering a 8-10 year span from manufacturers with either unlimited mileage, or 100,000km mileage limit could also drive uptake in ownership.

Manufacturers could even offer to replace the EV battery at the end of 5 years to cover the duration of a vehicle’s COE. Such battery longevity will help to further remove any barriers to purchase.

Thirdly, Singapore needs to ramp up the development of its EV charging infrastructure.

Industry players cite the slow deployment of public charging infrastructure as a key reason for the low ownership of electric cars here.

Singapore can accelerate the ongoing deployment of charging points through various means: by encouraging the development of charging infrastructure through incentives such as grants to install, passing legislation similar to the United Kingdom which requires fuelling stations to provide EV charging, and through direct procurement models such as those adopted in Norway where charging garages are being established around Oslo.

With this three-pronged approach in place, Singapore will be well on its way to mass electrification of vehicles, as a stepping stone to AV adoption.

The writers are Head of Infrastructure, Government & Healthcare, KPMG in Singapore, and Global Head of Infrastructure, KPMG in the UK respectively. Views expressed are their own.

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