Managing a city of electric vehicles: How can this happen?

Managing a city of electric vehicles: How can this happen?

By SMU City Perspectives team

Published 22 December, 2023


POINT OF VIEW

Smart Charging is a simple yet powerful idea: Price the charging service based on duration so that drivers of electric vehicles give flexibility to utility firms or charging stations.  As a concept it is feasible anywhere and is applicable in any country.

Yangfang (Helen) Zhou

Associate Professor of Operations Management


In brief

  1. Most cities are not ready for the widespread adoption of electric vehicles (EVs) due to the high upfront cost, the predominance of fossil fuel-based energy generation and insufficient charging infrastructure.  
  2. EV adoption rates and investments in infrastructure need to work hand in hand to successfully create EV-friendly cities. These require policy and business stakeholders to work in tandem to support these respective aspects of EVs at the right times.  
  3. There are exciting opportunities for innovation in EVs and renewable energy solutions; from smart charging pricing models to energy-to-grid applications that increase efficient energy use by supplementing and matching energy supply and demand.

According to the United Nations Environmental Programme, the transportation sector is responsible for a quarter of carbon emissions globally, with the overwhelming majority of transportation dependent on fossil fuel-derived products, such as petroleum and diesel. Reducing the carbon emissions of the transport sector is crucial in the drive to mitigate the negative effects of climate change. Electric Vehicles (EVs) have been lauded as the technological innovation that could potentially substantially reduce transport emissions. In 2023, a record high of 10 million EVs were sold worldwide, a 55 percent annual increase. 

EVs reduce emissions by removing dependencies on Internal Combustion Engine (ICE) vehicles - heavy carbon emitters, by switching to electrical engines instead. However, there are many challenges facing the EV transition, namely high upfront costs, predominant reliance on fossil fuel-based energy generation and insufficient charging infrastructures. Innovative solutions have been proposed to tackle these, including smart pricing models and integrated energy solutions.

Yang Fang (Helen) Zhou, Associate Professor of Operations Management, co-authored a research paper on Smart Charging of Electric Vehicles, with Owen Wu and Şafak Yücel, that demonstrates one such solution, smart charging. The paper outlines the benefits of smart charging in a city, providing cost reduction for both car owners and utility firms operating charging stations. In their proposed model, smart charging allows EV owners to charge their cars at times when electricity is the cheapest and cleanest, saving themselves money and reducing overall carbon emissions. This is through their time flexibility, which they can offer for those benefits. Assoc Prof Zhou shares what it takes to be an EV-friendly city, the key challenges to EV adoption and  how Asian cities are faring in this regard.

Q1:  In your opinion, what does it take for a city to be EV-friendly? 

Assoc Prof Yangfang (Helen) Zhou: An EV-friendly city is a city that has a conducive infrastructure and regulatory environment to encourage the adoption and use of EVs that result in a positive environmental impact. These conducive environments include, first, readily accessible public charging points to alleviate consumers’ range anxiety. Second, governments need to dangle policy incentives such as tax breaks, subsidies, and perks such as free parking, or priority lane accessto encourage the use of EVs. Third, sustainable energy sources such as renewable energy should be available for charging these EVs, with suitable recycling and handling of vehicle batteries to reduce landfill use at the end of the life cycle of these batteries. 

Compared to the first two, the last one is less talked about. In my view, for a city to be EV-friendly, the city has to have a clean enough energy mix for EVs to be environmentally friendly. We need to be mindful that the requirements for a city to be EV-friendly change as adoption evolves. For instance, a city may start with very attractive perks, such as free city parking, and toll reduction, but these need to be gradually rolled back as adoption increases, otherwise, they may result in unintended environmental consequences, such as encouraging greater use of cars than mass public transportation. 

Q2: What are the key challenges facing big Asian cities today in transitioning into EV-friendly cities?

Assoc Prof Zhou: In a nutshell, the three key transition challenges are the sustainability of the city's energy generation mix, the cost of EV models and the lack of investment in charging infrastructure. Big Asian cities are currently among the most polluted, therefore an initial key challenge for them would be to green their energy generation mix first before these cities can become both environmentally and EV friendly. The next challenge would be the limitations of low-cost EV models. In widespread adoption, it is hard to achieve parity of the total cost of ownership to vehicles with Internal Combustion Engine (ICE) vehicles. The initial upfront cost of purchasing, especially for less affluent segments of the population, tends to deter purchase, especially when the total cost of ownership discounts future potential savings on fuel costs. Additionally, a lack of investment in charging infrastructure is severely hampering the adoption and use of EVs. 

Q3: What do you think is the most critical shift needed for widespread EV adoption?

Assoc Prof Zhou: For Asian countries, the regulatory shift seems to be the most critical in EV adoption. For instance, China leads in EV adoption worldwide because of its attractive policy incentives. On the other hand, Malaysia EV’s adoption is lagging behind, likely because there is no official ban on ICE vehicles. It is the regulatory commitment in terms of subsidies and tax breaks, along with investment in charging infrastructure, that are the most critical to stimulate the adoption of EV. 

Q4: Do you think Singapore’s current regime of tax incentives, clear regulations and EV charger deployment schemes is sufficient for making Singapore EV-friendly?

Assoc Prof Zhou: These measures are indeed a big boost to EV adoption, but given the current EV adoption rate in Singapore these measures may not be sufficient for Singapore to catch up with some of the most EV-friendly cities. For example, Oslo has the highest percentage of passenger vehicles to be electrified worldwide. More than 80 per cent of Oslo’s vehicles are electric, while it is less than one per cent in Singapore now. In other words, out of close to 990,000 vehicles in Singapore, less than 8,000 are EVs. Many have argued for an outright ban on ICE vehicles as one way to increase the adoption rate.

Q5: Japan is facing issues, with charging stations becoming obsolete and requiring high infrastructure maintenance and replacement. How can governments and businesses better align themselves and their EV infrastructure investments, given the maintenance costs and lifespan of chargers?

Assoc Prof Zhou: The most important issue is that the government needs to support the investment of charging infrastructure in tandem with the EV adoption, rather than separately. Though Japan has invested heavily in the charging infrastructure, its EV adoption had not picked up momentum to tap into such infrastructure. These two must move together step-by-step to ensure an optimal outcome. 

Q6: Do you see the smart charging pricing model you proposed in your research, Smart Charging of Electric Vehicles, becoming widely adopted in Asian cities?

Assoc Prof Zhou: Yes, absolutely. This concept is feasible anywhere and is applicable in any country. It is a simple yet powerful idea: price the charging service based on duration so that EV drivers give flexibility to utility firms or charging stations. Suppose you don’t have to pick up your child until five hours later, you could just park your Tesla at the charging station throughout so that the utility company can charge your vehicle at the most convenient time, reducing electricity generation costs for the grid and carbon emissions arising from excess generation. Excess loads often rely on back-up energy sources which contribute additional carbon emissions. As a driver, you are compensated for your flexibility, plus, you are given a green sticker for having reduced emissions for the grid. It is a triple-win, a win for the grid, a win for you, and most importantly, a win for the environment. 

Q7: With a new industry of EVs emerging, there are plenty of opportunities for businesses, governments, and other stakeholders. What do you think is the most exciting opportunity arising in the EV industry? 

Assoc Prof Zhou: I am most excited about opportunities in energy storage and use from vehicle to energy grid. You could think of each vehicle battery as a mobile storage unit, moving around the city as a vehicle but functioning as a battery for the grid to tap whenever there is a high demand. Energy grids use backup power plants known as peak power plants, which tend to be polluting as they emit more carbon emissions. With vehicle-to-grid integrations, you can use these moving energy storage systems instead. Instead of only a centralised electricity generation model, batteries in EVs can help to supplement and match electricity supply and demand.  This idea may feel like it came out of a movie, but I believe it can become reality.

What insights come to mind?

What insights come to mind?

Click to respond and see what others think too

What makes you skeptical?

We read every single story, comment and idea; and consolidate them into insights for our writer community.

What makes you curious?

We read every single story, comment and idea; and consolidate them into insights for our writer community.

What makes you optimistic?

We read every single story, comment and idea; and consolidate them into insights for our writer community.

What makes you on the fence?

We read every single story, comment and idea; and consolidate them into insights for our writer community.

Story successfully submitted.

Story successfully submitted.

Thank you for your story. We'll be consolidating all stories to kickstart a discussion portal in our next release. Subscribe to get updates on its launch.

I consent to SMU collecting, using and disclosing my personal data to provide information relating to XXX offered by SMU that I am signing up for/that I have indicated my interest in.

I can find out about my rights and choices and how my personal data is used and disclosed here.

Methodology & References
  1. Ministry of Transport. (2023, Nov). Electric Vehicles, Policies. MOT.gov.sg. Retrieved from {https://www.mot.gov.sg/what-we-do/green-transport/electric-vehicles}. 
  2. Jaeger, J. (2023, Sept). These Countries Are Adopting Electric Vehicles the Fastest. WRI.org. Retrieved from {https://www.wri.org/insights/countries-adopting-electric-vehicles-fastest#:~:text=There%20are%20already%20a%20number,%25)%2C%20according%20to%20our%20analysis}. 
  3. Une, Y.. (2023, Sept). Japan’s EV infrastructure is aging as market fails to take off. Retrieved from {https://asia.nikkei.com/Spotlight/Datawatch/Japan-s-EV-infrastructure-is-aging-as-market-fails-to-take-off}.
  4. U.S. Department of Transportation. (May 2023). Implementation Challenges and Evolving Solutions for Rural Communities. Transportation.gov. Retrieved from {https://www.transportation.gov/rural/ev/toolkit/ev-benefits-and-challenges/challenges-and-evolving-solutions}.
  5. ENERGY5 (2023, Nov). Who Pays for Public Electric Car Charging Stations? Energy5. Retrieved from {https://energy5.com/who-pays-for-public-electric-car-charging-stations}.  
  6. International Energy Agency. (May 2022). Global Electric Vehicle Outlook 2022. IEA.org. Retrieved from https://www.iea.org/reports/global-ev-outlook-2022
  7. International Energy Agency. (Nov 2023). Transport. IEA.org. Retrieved from {https://www.iea.org/energy-system/transport}. 
  8. Suravi, R. H. (2021) EV Friendly Cities: A Comparision of Policy and Infrastructure in Sixteen Global Cities. HDL. Retrieved from {http://hdl.handle.net/1773/47722}. 
  9. Hughes, M. (May 2022). How to pay for an EV charging project. Charge Point. Retrieved from {https://www.chargepoint.com/blog/how-pay-ev-charging-project}. 
  10. Farmer, R., Gupta, R., Lath, V., Manuel, N. (June 2022) Capturing growth in Asia’s emerging EV ecosystem. McKinsey. Retrieved from {https://www.mckinsey.com/featured-insights/future-of-asia/capturing-growth-in-asias-emerging-ev-ecosystem}. 
  11. Land Transport Authority, Singapore. (2022). Annual Vehicle Statistics, MOTOR VEHICLE POPULATION BY VEHICLE TYPE. LTA.gov.sg. Retrieved from {https://www.lta.gov.sg/content/dam/ltagov/who_we_are/statistics_and_publications/statistics/pdf/MVP01-1_MVP_by_type.pdf}.