Outlook - The future of electric vehicles in Sri Lanka.

Now that the Green Frontiers mission we started in December 2015 has reached it's objectives, the fast charging network of the country is reasonably spread out covering most of main routes and main outstation locations... and we have maintained and kept all this alive for more than 3 years. Moreover, this was done while keeping to low rates of Rs 50-60 rate and without enforcing membership fees.

It's now time to evaluate what's the impact has been and what lies for the future of EVs in the country.

EV s on their hey day - @ Green Frontiers, Battaramulla -

For the moment, it looks like charging and range anxiety is not as big issues as they were. There are few new players who has entered into fast charging, CEB is also there. Several people are experimenting with battery solutions, Service providers and spare parts vendors are emerging etc.. Petrol vehicle taxes have gone up. One may think EVs might make a comeback. However, the looks can be deceiving...

With the help of many partners and brave individuals and support from the community, we may have managed to prevent EVs from totally collapsing for 3 years, without any government help, but that's all there is to it. There is a limitation on what few individuals or an organization can do, in the absence of a national policy and active government help. Everywhere in the world where EVs has succeeded, that has happened only with active government help. EVs has not thrived in anywhere yet, without some form of state help.

In Sri Lanka, EVs have started to come in numbers in 2015 when the import tax was just 5%. By around end of that year, the number of pure electrics and plugin electrics were around 4500. Then in November 2015 budget, the government has introduced the draconian new EV tax which suddenly penalize an EV import to as much as 50% of CIF value. Subsequent budgets and ministers boasted they have helped EVs but they were only number games. Final actual tax was always around 40-50% and to this date, the total number of EVs in the country stand only around 5000. The progress was virtually stopped in November 2015 and remains the same.

When new arrivals of cars are scarce, any new investor, service provider or business will think twice before entering into EV sector. Market growth, which is a key indicator of any business analysis is simply not there. With this background, it is unavoidable that even the existing EV related businesses to be winding down. Fast chargers do not have enough cars on roads to sustain their business, once the existing chargers which are outside of warranty periods (that is most of the chargers in here) need to import parts to replace broken ones, most investors are bound to ask the question whether it's worth it. Same goes for other areas of support. New battery replacement related experiments and investments might also slow down. All this would affect the second-hand car market of EVs -which is already struggling- in a very adverse manner.

All above issues will be non existant and EVs would thrive if only the EV tax is reduced at least partially. Therefore, the future and sustainability of EVs in here is going to be critically and directly depend on this years budget which is due in few days/weeks. Without a noticeable reduction of the EV tax, this environmentally vital sector will face a certain slow and painful demise in this year itself.

One may think, there are other helps the government can do. We do not believe so. Most things some expect the government to do are actually not beneficial and even damaging. For instance, CEB has started put up fast chargers, one may think this is a good move, but this is Sri Lanka and here's how the situation will play out in the end. We are a notorious country for government waste, mismanagement and corruption. Sri Lankan Air lines, Mihin Lanka, Railway, CTB, Ceypetco, CEB are just few examples. One minister has said once that the total problem of Sri Lankan economy can be equated to the loss at CEB. Ceypetco, Sri Lankan airlines and other organizations listed also are very much capable of profit making but instead, they remain as burdens on tax payer and huge black holes which gobbles up our resources. Why ? the reason is that governments can not do business.

Let's take fast charging. Very expensive brand of fast chargers arrived years after the tender proceedings, installed many months after arrival, some says that even the warranty periods are now expired. Some stations are still not even operational. Even if they become operational, how long they would remain so, who would take care of maintenance and proper operations? will a government institute which has other high priority tasks put on them will be passionate and dedicated to operating charging stations fluently for a long time? experience on our government service tells us otherwise. This is no body's fault. A government is inherently not suited do businesses.

One day, there is a good chance that these expensive stations will be tendered and sold out cheaply due to small maintenance issues accumulated over many months and that would be a tremendous waste of public money. If the government or the CEB really wanted to encourage and promote EVs in here, they could have simply, granted a favorable electricity tariff to charging stations. proper supply lines which don't cause voltage fluctuations and equipment damage. While one department of the government is putting a tax and preventing EVs from coming here, another department of the same government is importing and putting up fast chargers for those very EVs the first department is discouraging!

So it's our understanding and experience that the only and most effective way for the government to encourage and promote EVs in here is by reducing the import tax. Nothing else is needed and anything else will not be as effective. When more vehicles start to come, other services will naturally appear and develop. There is no need for the government to take the burden of importing batteries, putting up fast chargers, service stations etc. Those would just be avenues for public money wastage only. Government's main job is to provide legislation, policy and overseeing of proper implementation of those policies.

We have done our best for the past 3 years to keep things together... the ball is now with the government, which is still not too late to save the electric vehicle.

Electric Vehicles - Facts and Myths

I was out of blogging and social media for a long time (for good, so I thought). So many things have happened in last few years. Few years ago, I have written about Toyota Prius which got some discussion going on about the hybrid vehicles. Well, as they say a lot of water has flown under the bridge!

Just thought of coming back and write this since I have heard so many untruths recently about electric cars that it was almost hard not to have a say in some sort. So many have commented on these already, but I will just for the record add my 2 cents here as well.

1) Sri Lankan electricity grid can not take so many electric vehicles.
People who say this belongs to two categories, those who don't know enough and those who knows but knowingly and willingly trying to mislead others due to vested interests.

Some of electric car owners have already opted for net metering with solar panels, and many others are also planning to do so. Market analysis show that utilisation of solar power (via net metering) is so high among EV owners. So it is not correct to say that EV owners are a burden on the grid. Besides, Sri Lanka has a surplus of electricity at off peak hours (nights after 10PM) that anybody charging on those times are not a problem to the national grid at all. Not to mention the fact that new coal power plants are producing enough electricity for the country.

2) Electricity is produced using hydrocarbons so charging cars from electricity has no benefit in terms of environment or carbon emissions.

We can excuse people who say this out of lack of subject knowledge, however I suspect there are quite a few who propagate this knowing very well that it is not true at all. Compared to the combustion engines of motor vehicles, power plants are efficient by an order of magnitude! Even if we use electricity produced by a power plant using diesel or coal, it is still much more clean and will be using much less hydrocarbons than we pumping from the shed and burning in vehicle engines which are no way near the efficiency levels of industrial power plants. This can be so easily verified by a quick google search or from wikipedia that a further discussion on this is utterly unnecessary.

One last thing.. should we really need to mention that there is a seizable component of electricity produced without hydrocarbons ?

3) Importing more vehicles is not good for the national economy as we loose foreign currency.
True, but why then target EVs specifically! 2.5 million tax is not really a tax, impact of that is so huge that it cant be described any other way than as a measure to kill an emerging sector at its birth!

Surely, petrol/diesel vehicles could have been taxed more and some concessions could have given to environment friendly EVs and Hybrids. As a nation, we would have save money from petroleum imports. This is such a no brainer and something almost all other countries in the world are following.

4) EV owners who use solar power at home for charging will not be contributing towards the economy.
It is sad and disappointing to hear that some of learned businessmen and politicians have even entertained this thought! the argument goes like, EV owners if moved into using net metering with solar panels, will not be using petrol sheds and will not be paying electricity bills. So they can no be taxed and hence they are not contributing to the economy.

Do we really have to provide an answer to this argument ? When learned people comes up with this type of arguments we can just get an idea about how high the amount of vested interests could be.

Any sane person will not fail to see the huge positive impact a single person can make by becoming petroleum independent. Such a person will be an asset for an country and will be saving a huge amount of money annually which would otherwise be burned in a car or in a power plant to provide his energy needs.

Now, basic economics tell us that such a person will then spend that money (he has saved) in investments, savings or consume goods/services (which the others in the society has produced). That is certainly not a bad thing for the economy. Taxing should be a tool to improve a society, not to destroy one. If we still need to tax such a practice (instead of encouraging more people to follow that path, like other countries are doing), at least we should be finding some other ways to tax without killing off both Solar power and EV usage in one stroke. Almost any measure would have been much better than the one which has actually taken in this case!

Two good trends we have seen in Sri Lanka recently are the use of EVs and use of solar power (PV). Many people have opted for net metering which is a great save for petroleum importing developing country like ours. EVs seemed to encourage that trend further, at last it started to seem like some good things may happen to our economy and environment. It is very rarely one see something which is good for the economy and environment both at the same time. Sadly, this is the hope which is now made to go down in smoke, in favour of the petroleum importers, petrol/diesel car importers and few mega businessmen.

We may be engaging in many industries and businesses in many fields, some policy decisions may hit us on our profit margins here and there. As intellectually honest people we need acknowledge bad decisions and harmful decisions to the country/society even if they benefit us personally in the short term, vice versa.

If certain acts which are harmful for a country seem to benefit us, then that may be an indication that we may be in a wrong business, or engaging in some unethical, unpatriotic or anti-society business practices. This is what we need to say to those who trying to justify/promote the EV tax hike.