Friday, March 18, 2016

Electric car Tesla slapped with $15,000 tax surcharge

[Edited. New article appended Mar 18.]

Straits Times

Mar 5, 2016

Electric car is the first tailpipe emission-free vehicle to be penalised thus in Singapore
Christopher Tan

Senior Transport Correspondent

An electric car which attracts tax breaks in several countries has been slapped with a tax surcharge in Singapore.

The Model S - a sedan made by California-based Tesla Motors - is the first tailpipe emission-free car to be penalised this way here.

Mr Joe Nguyen, 44, registered a used Model S he sourced from Hong Kong just before Chinese New Year. He was shocked that the car - for which he paid close to $400,000 - was liable for a $15,000 carbon surcharge.

"Honestly, it's stupid," said the senior vice-president with an Internet research firm. "I went back to them (Land Transport Authority), and they cited a UN emission test regulation. They also factored in carbon emissions at the power station. We don't apply a carbon penalty to people charging their iPhones, do we?"

[Of course not! We don't have a law about carbon penalties for charging phones, tablets, computers, shavers, vacuums, etc,]
In response to queries, an LTA spokesman said: "Based on tests conducted under the UNECE R101 standards, the electric energy consumption of his imported used Tesla car was 444 watt-hour/km."

To "account for CO2 emissions during the electricity generation process", the spokesman said, "a grid emission factor of 0.5g/watt-hour was also applied to the electric energy consumption".

From this, it was determined that Mr Nguyen's Tesla produced 222g/km of CO2, putting it within the $15,000 surcharge band under Singapore's Carbon Emission- based Vehicle Scheme. The LTA applied this grid factor once previously to an electric Peugeot Ion (a subcompact hatchback), and it was granted a carbon rebate of $20,000.

The BMW i3 electric hatchback and i8 plug-in hybrid both qualify for a $30,000 carbon rebate.

Mr Nguyen, married with three sons, said he paid the surcharge because he "didn't want to wait any longer". It had taken him more than half a year from the time he imported the car last July to get it approved and registered for use on the road.

He had to shuttle between LTA, the Energy Market Authority and vehicle inspection centre Vicom in the process. Before the car was approved, he had to give an undertaking that he would recharge it only at his home - a cluster housing.

On the long process, LTA said "this is the first time a Tesla Model S has been tested for emissions".

The Model S is granted tax breaks in several countries. In Britain, buyers get a £4,500 (S$8,800) grant, and in the United States, they get a US$7,500 (S$10,400) income tax credit. Hong Kong waives registration tax for electric cars, which can be as high as 115 per cent of value. In Norway, a Model S gets a tax exemption of around US$135,000.

Mr Nguyen has posted an "open letter" online outlining his difficulty in registering the Tesla as well as his beef over the tax surcharge.

"I've given up on getting the money back," he told The Straits Times. "I just want LTA to improve. There is a lot of interest in the Model S."

Commenting on the case, Nanyang Business School adjunct associate professor Zafar Momin said: "Given Singapore's land size, great infrastructure and commitment to sustainability, we would not only have been the perfect test bed for electric vehicles (EVs), but also an ideal market for their wider application and usage.

While we have initiatives and incentives for EVs, we may already have missed the big opportunity to be a leader in EVs as a nation. The Tesla importation case is perhaps indicative of why we may have missed the opportunity."


LTA on Tesla: CO2 emissions for electric cars start at power grid

The LTA's clarification came after a consumer detailed the months-long journey of getting his Tesla Model S electric car on Singapore's roads. 

04 Mar 2016 

SINGAPORE: All used cars imported into Singapore will have to undergo exhaust emissions and fuel efficiency tests, and for electric cars, this means having the car's electricity generation process assessed for carbon dioxide (CO2) emissions, said the Land Transport Authority (LTA).

The authority was responding to Channel NewsAsia's questions after a local consumer, Mr Joe Nguyen, was reported to have spent months trying to get a licence for his Tesla Model S car to be driven on local roads. Additionally, he was not given the Carbon Emissions-based Vehicle Scheme (CEVS) rebate of S$15,000 but was charged S$15,000 tax for having a non-fuel-efficient car instead.

Mr Nguyen said in the Stuff report on Tuesday (Mar 1): "I don't get it, there are no emissions. Then they send out the results from VICOM, stating that the car was consuming 444 watt hour per kilometre (Wh/km). These are not specs that I have seen on Tesla's website, or anywhere else for that matter. And then underneath it, there's a conversion to CO2 emission."

A LTA spokesperson explained that for Mr Nguyen's case, the car was tested under the United Nations Economic Commission for Europe (UNECE) R101 standards. The result was that the electric energy consumption of his imported used Tesla car was 444Wh/km, she said.

"As for all electric vehicles, a grid emission factor of 0.5 g CO2/Wh was also applied to the electric energy consumption. This is to account for CO2 emissions during the electricity generation process, even if there are no tail-pipe emissions. The equivalent CO2 emission of Mr Nguyen’s car was 222g/km, which is in the CEVS surcharge band," the spokesperson added.

Under the revised CEVS, Mr Nguyen's Tesla falls in the C3 band, which accounts for cars with 216 to 230 g/km, and carries with it a S$15,000 surcharge.

She added that the Tesla is not the first fully electric car where grid emission factor was applied. A Peugeot Ion, for instance, was registered in July 2014 and received the maximum CEVS rebates, the spokesperson said.

LTA did acknowledge the delays Mr Nguyen faced during the testing process at VICOM Emission Test Laboratory. He had told Stuff that he experienced a two-month "ordeal" getting his car assessed.

"This is the first time a Tesla Model S has been tested for emissions," the spokesperson said.

[The discrepancy is that the rated energy consumption as provided by the manufacturer (Tesla) is about 237 Wh/km. LTA test was a result of 444 Wh/km.

This is a huge discrepancy.

LTA could have done the test wrongly.

BUT... there is the Volkswagen scandal.

So... not sure who to believe.

BUT... note that Tesla had tried to set up shop in SG (for about 6 months) before calling it quits because they were not going to get tax breaks for their cars.

Then again, maybe there IS a conspiracy. Because there are two issues here. Carbon Emissions and pollution, and Vehicle Ownership and traffic congestion.

The Tesla cars solves or ameliorates the first. But it is still a car on the road.

The Tesla cars are luxury cars costing hundreds of thousands of dollars. If you can afford one, you are in upper 20th percentile at least. Not getting a tax break on your green luxury car is not just a First World Problem. It's a Richie Rich problem.

I'm not going to worry too much about it.]

Tesla v LTA debate throws up some hard questions

Jessica Cheam

Mar 18 2016

The latest story to propel Singapore into the global limelight was the curious incident of a Tesla car and the Land Transport Authority (LTA).

Tesla Motors is an American premium electric vehicle (EV) manufacturer which became well-known in Singapore after news broke earlier this month of how the first Tesla EV imported into Singapore by 44-year-old Joe Nguyen attracted a $15,000 penalty from LTA.

The disgruntled Mr Nguyen - who reportedly paid $400,000 to get his Tesla Model S on the road - detailed the arduous seven-month-long process on a blog. His main grouse: Why did LTA penalise his EV, which has no tailpipe emissions, when so many other jurisdictions across the world offer rebates for similar vehicles?

[Side comment which may be relevant. In Singapore, being the first mover can be a risk. The first person to offer Karaoke in Singapore was fined for providing entertainment without a licence. The person who propose to have mobile lunch wagons/vans in public car parks tried to do it by the book and sought permission from the authorities first. As there were no scheme for such a programme, his request was denied in the first place, but subsequently, the authorities launched the scheme and invited interested vendors to bid for licences and location. The original proposer failed to get a licence. So surprised that the first person to bring in an elective car would have problems?]

The widely reported incident even prompted a call from Tesla's chief executive, Mr Elon Musk - a visionary tech entrepreneur who is also behind aerospace firm SpaceX - to Prime Minister Lee Hsien Loong. Both of them had met during PM Lee's trip to the US last month.

LTA is now reportedly working with Tesla engineers to assess if its test on the EV was conducted correctly.

The story has since generated a slew of comments and questions, which include: Is LTA's method of testing EVs and including grid emissions correct? LTA derived the penalty it charged Mr Nguyen by calculating the emissions of the EV from a power consumption test and from the electricity used to charge it using the national grid.

Others have asked if the Tesla EV should enjoy tax rebates when it's a high-performance car and whether Singapore should be embracing EVs?

To answer these questions, we need to look at the facts.

After remaining in relative obscurity for a century, EVs have soared in popularity in the past decade due to a combination of lower technology costs and increased government focus on cutting emissions and pollution.

Unlike conventional cars that run on internal combustion engines, EVs operate using batteries that are charged and have no tailpipe emissions. They help improve energy security by cutting reliance on transport fuels, and are a boon for cities, such as Beijing, that are plagued by smog since they do not emit any particulate matter.

The drawbacks of EVs, however, include their limited driving range and expensive batteries, which critics say make their manufacturing process more resource-intensive. Despite this, multiple studies conducted in recent years that have compared the life-cycle environmental footprints of petrol cars versus those of EVs have generally shown that the latter perform better.

That is also why governments across the world are encouraging EV adoption by offering incentives to consumers. They view EVs - combined with renewable energy - as a key part of their energy strategy to slash carbon emissions, which will help them meet the commitments pledged under the recent Paris Agreement to tackle climate change.

Mr Musk has publicly acknowledged that the world doesn't need more high- performance cars, but Tesla's strategy is to enter the high-end market - where customers can pay a premium - and use the revenue to drive down costs with each successive model so that EVs can some day become an affordable mass market option.

Ultimately, the biggest factor at play when determining if an EV has lower emissions is actually grid power, that is, how a country generates its electricity.

EVs that operate in a country powered by clean gas or renewables fare much better than, say, in a country powered mainly by coal. For instance, a 2013 study on "wells to wheels" emissions by a research group Shrink That Footprint found that Paraguay is the greenest place to make and drive an EV, whereas in India and China, where power generation is heavily coal-based, EVs have similar emissions as those of vehicles that use petrol.

In this sense, it is not wrong for LTA to consider grid emissions - the crucial thing is how it applies this calculation, whether it is applied fairly to all cars, and for it to provide transparency on its testing methodologies.

It should also allow some flexibility to cater for situations where, say, a car is charged via solar-generated electricity - not a remote idea, given the recent uptake of solar energy in Singapore.

LTA's handling of this incident has also exposed a bigger issue - Singapore's lack of knowledge and experience in EV technology.

For far too long, Singapore has ignored and lagged behind in the EV market and it does so to its own detriment.

Member of Parliament Ong Teng Koon noted in Parliament in January that EVs provide a rare opportunity in which "the (carbon) abatement cost would be voluntarily borne by consumers... rather than being paid for by the government".

Already, Bloomberg New Energy Finance is predicting that the EV revolution could be more dramatic than governments and oil companies have yet realised. It published a study last month which estimated that by the 2020s, EVs will become a more economic option than petrol or diesel cars in most countries. It forecasts that sales of EVs globally will hit 41 million by 2040, almost 90 times the equivalent figure for last year, when EV sales are estimated to have been 462,000, some 60 per cent up on 2014.

This would have implications beyond the car market since such an increase in the demand for EVs will displace the use of crude oil and shift energy demand to electricity generation.

Governments will need to find ways to ensure their grids are prepared for a growing fleet of cars that will now be charged at home, while simultaneously integrating large amounts of renewable energy.

It is unclear if Singapore is prepared for this reality. It launched an EV test bed in 2011 but that remains in testing stage after five years and Singapore still has no EV infrastructure to speak of.

Some industry observers have suggested that Singapore has deliberately chosen to ignore EV technology because it plays host to several large oil refineries, which depend on petrol car owners as a key source of revenue. If that is true, then it seems to be a short-sighted decision. But perhaps, all this won't matter in the end. For all the brouhaha over EVs, the larger vision for the country is to be a "car-lite" nation, as outlined by PM Lee in the Sustainable Singapore Blueprint last year.

Singapore's top priority should be to reduce the private car population as much as possible by making public transport affordable, reliable and accessible across the country. And where there is a need to use private cars, motorists should be encouraged to use the most efficient cars available, and share them as much as possible too.

I don't think anyone could argue with that.

The writer is editor of Eco-Business, an Asia-Pacific sustainable business online publication. This is a monthly column on the environment.

[See this article also on the relative "greenness" of various electric and hybrid cars.]

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