Sri Lanka has traditionally relied heavily on fossil fuels such as oil, natural gas, and coal to fulfil the majority of its energy and transportation needs. This dependency on fossil fuels, particularly for electricity generation and transportation, has now pushed the country to focus on decarbonisation of its energy and transport sectors. The transport sector in Sri Lanka, like in any other country, holds a significant position in the nation’s progress and advancement. However, this sector also stands as one the largest source of greenhouse gas emissions in the country.
Sri Lanka is taking initiatives in the field of EVs which are multi-faceted and forward-looking. As per the May 2020 report on “Study on Infrastructure and Enabling Environment for Road Electric Transport in SAARC Member States” by India Smart Grid Forum, the country has already registered 4,200 EVs and 900 electric motorcycles. According to Economic and Social Commission for Asia and the Pacific, the country has ventured into EV manufacturing with models like Vega EVX and Moksha. Electric buses have been introduced on four specific routes, creating environmentally-friendly public transportation options. In addition to this, the government has drafted a Framework on Electric Mobility in 2019 to guide its EV efforts. This was done in partnership with the Swiss Agency for Development and Cooperation. The framework outlines important aspects including charging infrastructure, policy and regulations, manufacturing and import, technology, incentives and subsidies, institutional capacity, etc.
Furthermore, Sri Lanka Sustainable Energy Authority (SLSEA) is working towards encouraging private sector involvement in the expansion of the charging infrastructure. The SLSEA will incentivise private businesses to establish their own EV charging stations, creating a network that complements the efforts of Ceylon Electricity Board (CEB) and Lanka Electricity Company (LECO). Furthermore, an ambitious goal has been set to convert 500,000 three-wheelers to electric by 2029, with support from the UNDP. The objective is to facilitate the conversion of 13,000 existing petrol-powered three-wheelers (3Ws) into electric 3Ws. It also intends to introduce 1,200 new electric 3Ws along with establishment of 40 solar-powered charging stations.
In addition, the National Energy Policy and Strategies of Sri Lanka (2019) listed out ten pillars, one of it is to enhance self-reliance. Under this, the country is slowly shifting away from oil-based fuels and moving towards electricity as a cleaner alternative. To facilitate this transition, the country considered the introduction of time-of-use (TOU) tariffs to encourage increased demand for EV charging during specific time periods.
The General Policy Guidelines for 2022 outline specific measures regarding EV adoption and charging infrastructure. The existing TOU tariff structure will be re-evaluated to promote the charging of EVs at customer premises to encourage EV charging during periods of excess renewable energy generation. Additionally, the guidelines propose to introduce incentives for establishing vehicle charging points by the private sector.
The expansion of EV charging infrastructure is crucial for addressing several key challenges and promoting wider EV adoption in Sri Lanka. The establishment of more EV charging stations will help in alleviating range anxiety and encouraging more people to consider EVs. Furthermore, as EV batteries age, their range and performance may gradually decrease. With an increased number of charging stations, EV owners can conveniently recharge their vehicles, helping to mitigate the impact of battery aging and maintaining consistent driving range.
The expansion of the EV sector in Sri Lanka will lead to a decrease in greenhouse gas emissions, aiding the country in meeting its intended NDC targets. EVs will also offer the possibility of lower total cost of ownership compared to traditional internal combustion engine cars. By transitioning the transportation sector from the use of fossil fuels to EVs, Sri Lanka can effectively lower its expenses on oil imports.
However, the substantial initial expenses associated with the EVs and the required charging infrastructure pose a significant barrier to the widespread adoption of EVs. Sri Lanka’s frequent adjustments to its motor tax system disrupts car manufacturer’s ability to strategically invest in the EV ecosystem. Further, as per the India Smart Grid Forum report, Sri Lanka depends heavily on vehicle imports. The pricing of vehicles within the country’s domestic market is significantly influenced by the taxes imposed on imports, given that the country lacks a domestic vehicle manufacturing sector.
Going forward, as per the sustainable energy development action plan for EVs, there is a target to transition 10 per cent of the vehicle fleet to EVs by 2030. This target will result in a significant market size of EVs in Sri Lanka.
Net, net, the future growth prospects of the EV segment in Sri Lanka hinges on the country’s economic recovery from its financial crisis. Still the policy impetus and industry developments indicate that the EV market in the country can grow despite the ongoing herculean challenges in its economy country.