Electric vehicles

Incentives Needed for Electric Vehicles to Zoom in Cambodia

An Energy Lab event on increasing the use of electric vehicles in Cambodia says taxes need to be cut on the eco-friendly modes of transport for them to reach their full potential.
The government is urged to increase the tax of combustion vehicles rather than increase the tax of electric vehicles.  Picture: Sam
The government is urged to increase the tax of combustion vehicles rather than increase the tax of electric vehicles. Picture: Sam

Creating a network of green cities across Cambodia by boosting the use of electric vehicles face hurdles before becoming a reality.

Electric vehicles or electric mobilities (EVs or EMs) are an emerging concept as an eco-friendly mode of transport that use electricity as power. This is achieved by charging a battery and comes with a raft of benefits. These include a smooth and quiet drive, zero carbon emissions and cheaper costs for the user due to lower energy consumption.

The concept was first introduced to Cambodia in 2013 in the form of electric cars. Since then, vehicles, such as two- and three-wheels vehicles have hit the country’s roads. However, they are yet to gain momentum on the capital’s streets.

On January 29, the Energy Lab organized an event to promote and showcase the potential of EVs at The Factory Phnom Penh. The aim was to show the growth, vision and challenges involved with rolling out EVs, while encouraging Cambodians to use them.

Energy Lab event to promote and showcase the potential of EVs at The Factory Phnom Penh. Picture: Meas Molika
Energy Lab event to promote and showcase the potential of EVs at The Factory Phnom Penh. Picture: Meas Molika

During the first panel discussion, "Is Electric Mobility the future of affordable and sustainable transportation in Cambodia?" Sophal Kong, Deputy Director-General of the General Department of Land Transport and Head Secretariat of the National Transit Transport Coordination Committee at the Ministry of Public Works and Transport, stated that even though the global market of EVs in the first half of 2021 grew by about 60%, the number remains below 3 digits.

To increase the number, the Ministry of Transportation has created 4 charging stations. In addition, UNDP has helped restore 5 charging stations.

EVs or EMs are an emerging concept as an eco-friendly mode of transport that use electricity as power. Picture: Meas Molika
EVs or EMs are an emerging concept as an eco-friendly mode of transport that use electricity as power. Picture: Meas Molika

Competition between second-hand vehicles and EVs

“The reality is that in Cambodia, electric vehicles are not competing with new combustion vehicles. They’re competing with the massive second-hand [vehicle] market,” said Karolien Casaer-Diez, the GGGI (Global Green Growth Institute) Country Representative in Cambodia.

She added the prices of new combustion vehicles are more expensive than electric vehicles. However, second-hand vehicles are much cheaper. She suggested the government should increase the tax of combustion vehicles rather than increase the tax of electric vehicles. This would help Cambodia in its mission to cut air pollution and curb climate change.

Sophal Kong said the government cannot currently ban all used vehicles in Cambodia as no policy has yet been created.

Safety battery

Responding to the risk of EVs regarding the safety of batteries, Amida Prak, Deputy Director-General of Policy and Strategy at the Ministry of Environment, said they need to be of a high quality to prevent accidents.

The two major EV players in Cambodia, Oyika and Onlion, plan to solve issue of having to swop batteries by creating the right recycling infrastructure. Currently to change the battery, the companies need to export them to another country and import new ones.

Electric vehicles are competing with massive second-hand vehicle market. Picture: Meas Molika
Electric vehicles are competing with massive second-hand vehicle market. Picture: Meas Molika

The final message from co-founder and president of Oyika, Carl Wong, was about the taxation on importing EVs to Cambodia. He said, “We pay more tax on EV motorcycles than the motorcycles costs. If EV motorcycles cost $1,000 that presents in the invoice of tax, they said, ‘no no no’ … you have to change it to $1,400. Then we have to go back to China to get the new invoice.”

He added that despite the International Trade Agreement detailing a tax price adjustment and the government stating they are willing to assist with this, the tax cost is still higher than the cost of motorcycles that he imports to sell in Cambodia.