As parking attendants arranged endless rows of dusty gas-guzzling motorbikes in the front of FACTORY Phnom Penh, an exhibit showcasing the future of motorbikes was taking place just meters away.
Curious onlookers took turns making silent laps around an outdoor basketball court, adjusting to the new sensation of electric power offered by a variety of local electric vehicle (EV) startups.
Most of the EV motorbikes are cheaper than a new Honda motorbike and range from about $900 to $1,500. They look sleek as well, often with smoother lines and less bulk than a traditional motorbike.
Companies at the forefront of the anticipated EV revolution in Cambodia made their pitches at the Electric Mobility Showcase on Saturday while government representatives and industry experts untangled the uncertain future of EV in the Kingdom.
One of the main sticking points, according to the Deputy Director General at the Ministry of Public Works and Transport Kong Sophal, is the lack of charging and battery-swapping stations in the city and beyond.
This has created a chicken-and-egg situation, with the government waiting for more people to buy EVs while potential EV consumers are waiting for more charging stations before they take the plunge.a
Sophal said the government would jump first and is teaming up with the United Nations Development Program (UNDP) to install four charging stations in the country by the end of the year.
The stations will be installed in Phnom Penh, Siem Reap, Battambang, and Sihanoukville. There are alternatives to large charging stations as well. Thada, a local company specializing in electric motorbikes, is planning on installing its proprietary charging stations at cafes such as Brown and Amazon across the city soon.
Thalida Puth, the CEO of Thada, said Thada motos last for about 50 kilometers before needing a charge and delivery companies have already partnered with the company. “We think Cambodia is still developing and we want to go green like other countries. We want to create this for the people,” she said.
Cambodia Investment Review has previously reported on the Cambodian government EV agenda.
Future of EVs in Cambodia
Karolien Casaer-Diez, GGGI’s Cambodia country representative, said motorbikes will be the main driver for the future of the EV market.
The revolution has already started, and she said she expects that there to be about 1,000 electric motorbikes on the streets of Phnom Penh already.
Sophal added that most of these motorbikes are not registered and urged residents to register them with the government.
Casaer-Diez and Sophal joined a panel of experts Saturday to discuss the viability of EVs in Cambodia’s future.
According to the panel, there are speedbumps to the long-term success of EVs, with one of the most glaring one being the fear of running out of battery in a place without the ability to charge or swap a battery.
Casaer-Diez likened it to panicking when your phone gets under 50 percent. Although you know it will probably last the rest of the day, there’s still an urge to plug it in. The way to solve this is by constructing a wide network of battery swapping and charging stations, she said.
“Globally, that has been one of the most effective things that governments have done to stimulate the uptick of motorbikes, facilitating that by allocating space and subsidies,” she said.
She mentioned Taiwan as a prime example of how government incentives can spur the growth of the EV market. At first, the country subsidized the purchase of EVs themselves. After this failed to make much of a dent, they started subsidizing the construction of battery-charging stations, and that led to a massive increase in EV sales.
“That was tremendously successful because it overcomes that anxiety [of running out of battery]. You know you can swap your battery at any street corner the same way you can pick up petrol in every neighborhood,” she said.
Cambodia could follow a similar model and is already attempting to make the switch to EVs. Taxes on import duties for EVs were reduced from 30 percent to 10 percent last year to incentivize the purchase of EVs.
Supplanting the second-hand market
Casaer-Diez said these were important but that in Cambodia, the battle isn’t between new EVs and new vehicles or motorbikes, it’s between EVs and the second-hand market. She said increasing taxes on internal combustion engine (ICE) vehicles rather than lowering taxes on EVs could also be a successful strategy.
“There is no second-hand market yet for EVs… So I think that’s why these financial incentives remain very important.”
She said there were other models to consider as well, such as increasing taxes on internal combustion engine (ICE) vehicles or having utility companies offer special tariffs for charging stations and battery-swapping stations.
“For a utility [company] it makes sense to throw its weight behind the electrification of transport. It is simply an opportunity for extra revenue,” she said.
As a representative of the transportation ministry pointed out before the panel discussion, the world is trending away from ICE and Cambodia wants to jump on the bandwagon.
He said EVs make up 14 percent of car sales in China, by far the largest EV market in the world. In Germany – Europe’s largest EV market – EV sales represent 12 percent of the total automobile market.
Japan is aiming to ban the sale of gas-powered cars by 2035. Singapore plans to be the first in Southeast Asia to ban gas-powered cars by 2040.
Flipping EV Perceptions
Another issue stunting the growth of the EV market in Cambodia is the perceived poor quality of EV vehicles, which the panel mostly dispelled. Not only did they debate that notion, they said throughout a vehicle’s lifecycle, EV vehicles save their owners far more money on maintenance costs.
One businessman in the EV startup scene posited to the panel that this perception could be related to the prominence of poor-quality imported lead-acid batteries that have flooded the Phnom Penh market. He said they only have a lifespan of one to two years, which has turned people away from EVs as a whole.
Sophal said the transport ministry was looking into regulating batteries and said quality was of the utmost importance if EVs were to catch on in the Kingdom.
Casaer-Diez said young people would be the catalyst that lights a fire under the EV market. High school and college students are the most likely to become first adopters.
“In Cambodia, the people who move to Phnom Penh to start their studies and who buy their first motorbike. If they go electric when they’re 18, they won’t go back,” she said.
Tuk-tuk drivers could also become prominent players in this revolution. Onion, the company responsible for bringing the first electric tuk-tuk to Cambodia, said has received hundreds of preorders and 300 tuk-tuks will soon be ready to hit the streets.
The company assembles the tuk-tuks at Kandal province’s Suvannaphum Special Economic Zone. An Onion representative said tuk-tuk driver can increase their income by 20 to 40 percent considering the lower maintenance and fuel costs over a year.
Beyond personal savings, a switch to EVs will be a net positive for everyone. Casaer-Diez said gas-powered motorbikes emit nine times more carbon emissions than electric motorbikes.
In the future, she said the entire transportation sector should ideally move to a more service-oriented sector, where personal ownership of vehicles dips and short-term rentals or sharing programs take over.
EnergyLab proud to support EV in Cambodia
Melissa Lu, Country Manager of Energy Lab told Cambodia Investment Review that she was proud to organise the third Electric Mobility Showcase to show what’s available and happening in the electric mobility space today.
“It’s exciting to see so many people interested in using EVs in Cambodia, and to bring experts and policy makers to this event to show them that EVs are already here in Cambodia – and there’s a growing appetite for these vehicles. EVs can support Cambodia’s transition to clean energy as each vehicle essentially acts as mobile battery storage which can help balance variable renewable energy,” Lu said.
“Today we’ve heard panelists talk about the barriers from standards and registration to range anxiety and competitive cost and it’s important that we’re having these conversations now to support the uptake of electric vehicles in to the future,” she added.