Over the past few decades, our climate has changed drastically with Earth’s temperature rising by 0.18 degree celsius every decade since 1981. The rise has caused extreme weather events, chunks of ice melting in the Antarctic, longer lasting wildfire seasons. Majority of the global warming spectrum is caused by emission of greenhouse gases from the burning of fossil fuels generating energy to the carbon pollution from internal combustion engines of petrol vehicles. This has created an emergence of electric vehicles (EV) and the urgency for car manufacturers to adopt this change.
Leading luxury brands in this industry, Rolls Royce and Bentley, have made grand announcements of full electrification of their fleet by 2030, with many other brands following suit. Even Ferrari has just announced the revelation of its first fully-electric car, coming in 2025. Who would have thought that a brand of Ferrari’s caliber would produce a fully electric car worthy of Hypercar specs. While car manufacturers are quick in embracing the new electric trend, car rental companies face struggles and limitations operating with EVs in their fleet.
Furthermore, naysayers question the environmental friendliness of manufacturing a 1,500 kg fully electric car having a power output matching the 1,200 horsepower of its traditional petrol fuelled counterparts. Let us discuss if electric cars are nothing more than pure hype created by car companies and the limitations car rental companies in Singapore face with EVs in their fleets.
EVs’ Hidden Carbon Footprint
Unclean Source of Energy
The main difference between an EV and petrol cars is the way they convert potential energy stored in the vehicle into kinetic energy. While thermal engines convert chemical energy stored in the vehicle by chemical reaction and combustion, EV solely relies on its lithium-ion batteries without any fuel burnt. However, this does not necessarily mean an EV is automatically greener than our conventional combustion engine, this would depend on the source of energy used to power these EVs.
95% of Singapore’s energy is generated through the burning of natural gases which is cleaner compared to the burning of coal and oil by emitting half as much carbon dioxide into the atmosphere. However, they also release methane, which reacts with other gases when exposed to harsh sunlight in our upper atmosphere and breaks down our ozone layer. Hence, it doesn’t matter if the EV is not damaging our environment when driven as the pollution was already released from dirty energy sources in a distant power plant. Despite Singapore’s future strategy for cleaner energy, its geographical location and limited size restricts its access to natural assets needed for mass renewable energy generation.
Raw Materials for Lithium-Ion Batteries
While the process of manufacturing and assembling a car is almost identical for both petrol and electric, the main difference lies in the production of car batteries due to EVs’ larger batteries made of rare materials at higher environmental costs. EV batteries are made of rare Earth elements such as lithium and cobalt found deep beneath Earth’s surface, therefore requiring mining activities with very polluting processes. For example, to produce 1 ton of rare elements, 75 tons of acid waste and 1 ton of radioactive residues are also made. A researcher at Cambridge stated that producing an EV releases 30%-40% more production emissions as opposed to petrol cars. Despite all that has been said, EV’s higher initial environmental costs are offset by its superior energy efficiency overtime.
Limitations & Inefficiency of Adding EVs to Rental Fleets
As we enter an accelerated age of clean energy, car manufacturers and rental companies are pressured to go electric by consumers’ increasing demand to go clean and governments imposing deadlines for electric transition. In turn, car manufacturers set targets to turn full electric within the next decade, flooding the market with new electric models in recent years. This leaves car rentals with no choice but to follow suit. However, corporate car rentals in Singapore are bounded with heavy limitations adapting to this change.
EVs Getting Pricier Though Batteries Getting Cheaper
Despite the fall in lithium-ion battery prices, the price of EVs continue to rise as researchers develop ways to improve EV production efficiency. Given the relatively new EV production, car manufacturers would deploy their new technology on more expensive cars first as luxury car buyers are able to bear the price. After these new EV models have penetrated the market, automakers would increase production volume as new technological cost lowers. Car makers would then introduce a range of more affordable models available to lower-middle class citizens.
As of June 2022, a Hyundai IONIQ Electric costs S$153,888 including COE while a MG ZA EV costs S$145,888. On the higher end of the spectrum, a Tesla Model 3 Performance comes at S$264,632 while a BMW iX3 costs S$254,988.
Just like your mobile phone, an average of 5%-10% of the electricity range is lost per day as the EV sits idle as opposed to our conventional petrol car retaining its full tank even after not utilising. At BizLink Rent a Car, it is our standard procedure to ensure a fully filled tank to customers before handing our cars over. In this case, ensuring the EV is 100% fully charged. However, despite giving you a maximum operating time, a fully charged battery would lose battery capacity and reduce the battery’s lifespan if it is constantly charged to maximum capacity. Hence, our standard procedure for EV would have to be revised to construct a charging model to minimise “energy evaporation” and unnecessary costs.
Limited Charging Infrastructure
Charging stations are categorised into Alternative Current (AC) & Direct Current (DC) charges. Without getting into technical details, AC charger charges slower due to its lower power output of 3.7 kW (Greenlots by Shell) to 7.4 kW (SP Power) while DC outputs at 50 kW. AC chargers are also cheaper than DC chargers with price rates at$0.43 kWh and $0.52 kWh respectively. Of course, these prices vary depending on the fluctuating electricity prices.
Assuming an electric car with an average battery capacity of 40 kWh, it would take 5-10 hours to fully charge as opposed to 50 mins via a DC charger. As of today, there are currently 1,600 charging stations available in Singapore, majority being AC chargers and are based on First-Come-First-Serve basis. This serves as further limitations for car rentals to incorporate EVs due to limited charging stations and long waiting time which is detrimental to our turnaround time between customers. Fortunately, Singapore targets to ensure 3 charging points for every Housing Board car park by 2025 and 60,000 total charging points by 2030.
While a traditional car would take less than 30 mins to be cleaned, fuelled and be prepared for the next customer, an EV would take several hours to charge and be ready to handover depending on the battery percentage it was returned at. This would inevitably change the supply/demand balance of car rental providers. Corporate car rentals would have to implement a new operation model to pre-plan and turnaround , ensuring consumer demands are met on time.
Electric cars are generally categorised as luxurious products which makes them costlier to insure. This is largely due to EVs being more expensive and less produced than their non-electric counterparts, which means EV internal parts cost more to source, maintain and repair. In addition, electric cars run on large, expensive batteries which are costlier to repair when damaged. The driver’s age and driving experience are main factors when calculating an insurance premium. Whereas EV insurance policies take additional steps by taking the make and model of the car into consideration, making those policies limited and rare. These higher repair and protection costs would reflect in higher insurance premiums paid by the car rental and high excess beared by the customer in an event of any accident.
Our sales associates took their time to engage our customers on their views and preference on electric cars. We have concluded that 70% of respondents prefer renting the traditional petrol cars instead of EVs. When asked the reasons, most said they were dubious on the efficiency and functions of an EV. Other concerns were about limited charging stations and their inexperience in electrical charges. Conversely, the other 30% stated their interest in renting an EV as they understand how it works and would like a platform to evaluate this new technology. On the flip side, 50% of the respondents would purchase an EV if given the opportunity to to reduce personal carbon footprint, however are hesitant due to costly market entry prices.
Here at BizLink Rent-a-Car Pte Ltd, we have yet to launch electric cars. However, not to your dismay, we offer a range of Hybrid and Mild-Hybrid cars kept and maintained at the best condition if customers are adamant on environmental saving. Should you wish to enquire more on our different categories of cars and rental packages, feel free to visit us at https://bizlinkrentacar.com.sg/ or contact our sales associates at +65 6285 6616.