Rude shock for electric cars after Sri Lanka duty cut
ECONOMYNEXT – Finance Minister Mangala Samaraweera’s move to slash customs duty and encourage the import of electric cars may have unexpectedly backfired with hardly any takers for the supposedly greener vehicles.
Dealers stuck with stocks imported prior to the November duty reduction were struggling to push their unregistered Nissan Leaf and BMW I3 models while the second hand market for electric cars remained in the doldrums.
A car dealer at Galle Road, Bambalapitiya said a 2013 LEAF which had cost him 4.3 million to import prior to the tax cut was now being offered at 2.9 million and yet there were no takers despite advertising it every weekend.
The second-hand market for the LEAF had been all but killed by the duty reduction with 2012 and 2013 models being offered at below two million, but yet no one to buy them.
"Range anxiety" associated with electric cars and the sudden drastic reduction in the price of small hybrid and gasoline powered cars has taken the shine off electric cars, according to dealers.
A key importer of reconditioned and new cars at Kohuwala said they had not imported an electric car in two years, but were trying to sell a few second hand units that were traded in for unregistered vehicles.
The Nissan LEAF began entering the Sri Lankan market about four years ago with the second-hand 2012 model which had a theoretical range of 120 kilometres, but practically did just about 80 kilometres on a full charge.
The newer LEAF models boast a range of 180 kilometres on a single charge, but users say they get only about 100 kilometres. LEAF drivers across the world suffer from what is globally known as "range anxiety."
Many Leaf drivers return home sweating, unable to use the air conditioner for fear of running out of battery power.
"With the first generation Leaf, the range was not enough and ‘range anxiety’ became a big issue for a lot of consumers," Christopher Richter, an auto analyst at brokerage CLSA in Tokyo said in September when Nissan launched the 2nd generation LEAF.
The new generation LEAF has a theoretical range of 400 kilometres, but it costs about $30,000 in Japan and the on-the-road price would be comparable to a 1,000 to 1,200 CC brand-new hybrid such as the Suzuki RS or the Honda Civic.
Monthly Leaf registration which hit a high of 528 in October 2015 had dropped to just three by November last year.
The three Leaf cars registered in November 2017 compared with 2,439 other cars that entered Sri Lankan roads during that month. Out of that, 2,049 were hybrid models.
Minister Samaraweera reduced the duty on electric cars saying he wanted to encourage more environmentally friendly vehicles, but the record of the electric car is anything but.
Only a few use solar power to recharge their electric cars. Most of electric car owners get a special connection from the Ceylon Electricity Board which offers a concessionary rate.
Considering that 85 percent of power is generally generated using coal or other fossil fuels, electric cars are only shifting the pollution from the car to the power station.
Often, the electricity is also generated using diesel which is subsidised by the state. This means, electric car owners get subsidised electricity generated with subsidised diesel.
However, the minister has argued that the problem will be resolved when car charging centres using renewable sources are set up across the country. But, with the demand for electric cars dwindling, it is unlikely that anyone will invest in rolling out a charging network to service a few thousand cars. (Colombo/Dec08/2018)