If the transition from internal combustion to electric and electrified is very visible in Europe and the UK and, slightly delayed, will be so in the United States, it has not been a hot topic in most Asia countries. Global and regional fleet managers with responsibilities over Asian fleets, will have noticed that OEMs don’t even publish the CO2 emissions of vehicles produced locally. Fleet electrification is just one of the topics that will be addressed at the online Global Fleet APAC Summit on 20 and 21 January 2021.
Status quo
Until now, only few Asian countries have formalized some sort of emission regulation. Thailand, for example, has reviewed its excise tax in 2016 in function of emissions, engine size and the vehicle utilization; big luxury cars with 3 liter engines and +200g/km emission will be taxed at 50% whilst clean cars will be submitted to a 10% taxation only. The (popular) pick-up trucks, such as the locally produced Toyota Hilux, are however not submitted to the emission-based regulations and drive away with a 3% only taxation (for single-cab, below 3.250cc and below 200g/km).
China
China has invested massive amounts of money towards electrification, which translates into subventions for both manufacturers and end-customers. These subventions have been in place since the “Made in China 2025” economic plan and are part of a larger strategy aimed at transitioning China’s industries from low-tech to high-tech. In addition, China wants to become less dependent on the import of energy (oil). The plan is working and the uptake of EVs is visible in the roads of China’s cities: almost all 2 and 3-wheelers are pure electric, and, in recent surveys, 50% of Chinese consumers confirm that their next car will be electric or electrified.
Australia
Other major countries in the region, however, have not been specific about their intentions to decarbonize. Australia is probably the most striking example: although it has been the topic of many political debates, the country seems to hesitate to put in place regulations that incentivize low-emission vehicles. In addition, local climate activists are frustrated by the lack of alternatives, such as public transport, that could reduce vehicle emissions.
Japan
So, what about Asia’s second largest economy, with roughly 80 million vehicles for a population of 126 million? It would be highly incorrect to say that Japan has not done anything to lower its vehicle-related emissions. Fact is that Japan has an extremely efficient public transport network, new taxis are hybrid Toyotas, small (“kei-“)cars receive a favorable tax regime and hybrid vehicles have become the go-to standard for consumers. Nonetheless, what was missing is a strong mission statement from Japan’s Government, lifting sustainability to the top of the agenda. And that might have happened now.
Near-Zero by 2050
Japan, careful and conservative by nature, prefers non-disruptive evolution to directive and immediate change, as seen in China. Nonetheless – and surprisingly – the Japanese Government, under leadership of new Prime Minister Suga, has made a few statements that will have major impact on both the car industry and public perception.
As part of a post-corona strategy, the Japanese Government has put forward a 34 trillion Yen ($326 billion) strategy of which decarbonization is an important pillar. This translates into different initiatives, such as an incentive of JPY 400.000 ($3845) for EVs; these incentives are said to raise to JPY 800.000 ($7690) in a next step.
The most aggressive statement however is Japan’s intention to reduce emissions industry-wide and country-wide to “near-zero” by 2050. Combustion engine vehicles will most probably be banned by mid-2030s (not formally confirmed yet); by then, Japanese statistics predict that 50% to 70% of all vehicles will be “new energy” vehicles.
What does this mean for the APAC Fleet Manager?
The moral impact of the “big economies” in APAC should not be underestimated. China’s electrification has had a direct and immediate impact on the awareness of emissions standards in many Asian countries – let’s not forget that these economies depend to a large extend on China. But when Japan decides in favor of sustainability, it confirms the correctness of such strategies. China leads by example in innovation, but Japan does so in implementation.
We can expect a trickle-down effect to other countries, especially the fast-growing South-Asian nations. These countries are well-positioned to accelerate electrification for various regions: they have the funding, they are looking out for new industry opportunities and they have the (natural) resources. At the same time, these nations are eager to reduce the negative effects of urbanisation, of which pollution and congestion are the most visible ones.
Therefore, Global and Regional Fleet Managers can anticipate tax/regulation changes by adapting policies in favor of electrification and become the early adopters of new energy vehicles. 2021 is year 1 of Asia’s corporate car fleet decarbonisation.
Understanding is the first step to success: unlock fleet and mobility efficiency in APAC at the online Global Fleet APAC Summit on 20 & 21 January 2021.
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December 15, 2020 at 06:06PM
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Asia at Sustainability Crossroads - Global Fleet
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