Situationer: New Energy Vehicle policy plagued by contradictions

The controversy centres on the draft policy’s proposal to extend major fiscal concessions, including a proposed one per cent sales tax and lower import duties, to both fully electric vehicles and plug-in hybrids, even though the PHEVs mostly rely on internal combustion engines. The move risks undermining the core objectives of the policy, i.e. reducing emissions and oil imports, promoting transport electrification, and developing a localised EV ecosystem. Engineering Development Board chief executive officer Hamad Mansoor did not take calls or respond to the messages for his point of view. The contradiction becomes sharper because the draft policy itself adopts different standards for different categories. For two- and three-wheelers, only fully battery-electric vehicles qualify for NEV incentives. However, in the passenger vehicle and commercial categories, the framework broadens eligibility to include PHEVs offering an electric-only driving range of 50 kilometres. Critics argue that the push to include PHEVs within the NEV category is being driven by existing industry players that already benefited from earlier greenfield incentives for hybrid and plug-in hybrid assembly. They said this policy created a regulatory double standard. If battery-only propulsion is considered necessary for motorcycles and rickshaws to qualify as “new energy vehicles”, then why should larger passenger vehicles that carry combustion engines receive the s