the preliminary works for the technical …open_jicareport.jica.go.jp/pdf/12182978.pdf · the...

THE PRELIMINARY WORKSFOR THE TECHNICAL COOPERATION

ON LOW-EMISSION TRANSPORT SYSTEM IN LAO PDR

(LETS EV)

FINAL REPORT

FEBRUARY, 2014

JAPAN INTERNATIONAL COOPERATION AGENCY(JICA)

ALMEC CORPORATION

JAPAN INTERNATIONAL COOPERATION AGENCY (JICA)MINISTRY OF PUBLIC WORKS AND TRANSPORT (MPWT)

LAO

14-004

J R

i

JAPAN INTERNATIONAL COOPERATION AGENCY (JICA) MINISTRY OF PUBLIC WORKS AND TRANSPORT (MPWT)

THE PRELIMINARY WORKS

FOR THE TECHNICAL COOPERATION ON LOW-EMISSION TRANSPORT SYSTEM IN LAO PDR

(LETS EV)

FINAL REPORT

February 2014

ALMEC CORPORATION

The rate used in the report is

USD1.0= JPY102.5=LAK7,882

(rate in February 2014)

Electrci tariff=780LAK/kWh=0.099USD/kWh

Gasoline price=10,590LAK/L=1.34USD/L

Diesel price=9,000LAK/L=1.14USD/L

(price in February 2014)

i

TABLE OF CONTENTS 1 INTRODUCTION ......................................................................................................... 1-1

1.1 Study Context ................................................................................................................. 1-1

1.2 Study Objective, Coverage, and Counterpart Agency ................................................... 1-2

1.3 Study Implementation..................................................................................................... 1-2

2 ELECTRIC VEHICLES IN LAO PDR ............................................................................ 2-1

2.1 Current Status of EV Introduction in Lao PDR ................................................................ 2-1

2.2 Current EV-related Policies and Proposals ..................................................................... 2-9

2.3 Analysis of Ownership and Utilization Costs of EVs ...................................................... 2-17

2.4 A Direction for Promoting EVs in Lao PDR .................................................................... 2-27

3 EV POLICIES AND REGULATIONS IN EV INTRODUCING COUNTRIES ................. 3-1

3.1 EV Policies and Regulations in Japan ........................................................................... 3-1

3.2 EV Policies and Regulations in Europe ....................................................................... 3-13

3.3 EV Policies and Regulations in the United States ....................................................... 3-22

3.4 EV Policies and Regulations in China .......................................................................... 3-31

3.5 EV Policies and Regulations in ASEAN ....................................................................... 3-36

4 INSTITUTIONAL FRAMEWORK FOR EV/PHEV PROMOTION IN LAO PDR .............. 4-1

4.1 General ........................................................................................................................... 4-1

4.2 Regulatory Framework on EV ........................................................................................ 4-2

4.3 Tax System on EVs ...................................................................................................... 4-12

4.4 EV Infrastructure Development .................................................................................... 4-45

4.5 Information and Education Campaign .......................................................................... 4-53

4.6 Public and Private Partnership (PPP) in EV Development .......................................... 4-60

4.7 External Assistance and International Cooperation ..................................................... 4-62

5 MODEL PROJECTS ..................................................................................................... 5-1

5.1 General ......................................................................................................................... 5-1

5.2 E-trike Support Program ................................................................................................ 5-2

6. CONCLUSION AND RECOMMENDATIONS ................................................................ 6-1

ii

Appendix Appendix 3A: Vehicle Regulations in Japan

Appendix 3B: Guidelines for Converted Electric Vehicles

Appendix 4A: Preliminary Analysis on Vehicle Tax and Road Transport Finance

Appendix 4B: Datasheet on Selected Vehicles for Analysis

iii

LIST OF TABLES Table 2.2.1 Priority Projects in the EST Strategy of Lao PDR ........................................................ 2-10

Table 2.2.2 Roadmap for EV Introduction ...................................................................................... 2-14

Table 2.2.3 EV Assumed Policy Targets by Year ............................................................................ 2-16

Table 2.3.1 Specification of Selected Vehicles ............................................................................... 2-17

Table 2.3.2 Characteristics of Sample ICE Vehicles and EVs for Analysis .................................... 2-18

Table 2.3.3 Vehicle Operating Costs of Motorcycles and E-bicycles (USD) .................................. 2-19

Table 2.3.4 Vehicle Operating Costs of Motorcycles and E-motorcycles (USD) ............................ 2-20

Table 2.3.5 Vehicle Operating Costs of Jumbo and E-trikes (USD) ............................................... 2-21

Table 2.3.6 Comparison of 8% Interest Loan and Interest-free Loan ............................................. 2-22

Table 2.3.7 Vehicle Operating Costs of Tuktuk, Shared taxi and E-minibus (USD) ....................... 2-24

Table 2.3.8 Vehicle Operating Costs of ICE-sedans and E-cars (Case 1: Base Case) ................. 2-25

Table 2.3.9 Vehicle Operating Costs of ICE Sedan and E-cars (Case2: battery cost =1/2) .......... 2-25

Table 2.4.1 Target EVs for Promotion by Vehicle and Battery Types ............................................. 2-27

Table 2.4.2 Comparison of Lead-acid and Li-ion Batteries ............................................................ 2-28

Table 2.4.3 EV/PHEV Promotion Policy by Vehicle Type ............................................................... 2-29

Table 3.1.1 Subsidy on EVs by the Next Generation Vehicle Promotion Center ............................. 3-2

Table 3.1.2 Working Groups in APEV ............................................................................................... 3-3

Table 3.1.3 Regulations Related to the Road Transport Vehicle Act ................................................ 3-5

Table 3.1.4 Classification of Charging Facilities at Private and Public Parking Spaces .................. 3-7

Table 3.1.5 Components of Technical Requirements for Converted EVs ........................................ 3-9

Table 3.1.6 Vehicle Classification under the Transport Vehicle Act ................................................ 3-11

Table 3.1.7 Vehicle Category under the Road Traffic Act ............................................................... 3-12

Table 3.1.8 Electric Vehicle Classification under the Transport Vehicle Act ................................... 3-12

Table 3.2.1 EV Promotion Policies and Strategies in European Countries .................................... 3-14

Table 3.2.2 Incentives given by European Countries to EVs/PHEVs Users .................................. 3-15

Table 3.2.3 National Members of AVERE ....................................................................................... 3-15

Table 3.2.4 Vehicle Classification in Europe ................................................................................... 3-19

Table 3.2.5 Supplemental Sub-classification Criteria for Vehicle Category L ................................ 3-20

Table 3.3.1 Incentives for EV/PHEV Promotion by the States ....................................................... 3-23

Table 3.3.2 EV/PHEV-Related Standards in USA .......................................................................... 3-27

Table 3.3.3 NHTSA Vehicle Classification ...................................................................................... 3-28

iv

Table 3.3.4 FHWA Vehicle Classification ........................................................................................ 3-28

Table 3.3.5 US EPA Vehicle Classification ..................................................................................... 3-29

Table 3.4.1 Subsidies for EVs/PHEVs in China .............................................................................. 3-32

Table 3.4.2 List of Published Standards of Electric Automobiles in China (36 Items) .................... 3-34

Table 3.4.3 Vehicle Classification in China ..................................................................................... 3-35

Table 3.5.1 Incentives for EVs/PHEVs in ASEAN .......................................................................... 3-37

Table 4.1.1 EV Related Regulations in Lao PDR ............................................................................. 4-1

Table 4.2.1 Identified Problems and Issues with Regards to EVs, PHEVs ...................................... 4-3

Table 4.2.2 Applicability of Existing Laws and Regulations on 3 Tests ............................................ 4-6

Table 4.2.3 Identified Problems and Issues with Regards to EVs, PHEVs ...................................... 4-6

Table 4.3.1 Tax Rates on Vehicles in the Current Tax System ....................................................... 4-12

Table 4.3.2 Rates of Road User Charges by Vehicle Type ............................................................ 4-13

Table 4.3.3 Amount of Tax/Charge for Model Vehicles in Lifecycle ................................................ 4-18

Table 4.3.4 Characteristics of Middle Price (Tax Base) in Comparison to CIF ............................... 4-19

Table 4.3.5 Amount of Tax/Charge for Mode Vehicles ................................................................... 4-20

Table 4.3.6 Estimated No. of Vehicles by Type in Lao PDR ........................................................... 4-22

Table 4.3.7 Estimated No. of Vehicles by Type by Category .......................................................... 4-23

Table 4.3.8 Tax Revenue by Tax Category ..................................................................................... 4-23

Table 4.3.9 Tax Revenue Share by Vehicle Type ........................................................................... 4-24

Table 4.3.10 Fuel Taxes.................................................................................................................... 4-24

Table 4.3.11 Balance of National Road Maintenance Expenditure .................................................. 4-24

Table 4.3.12 Vehicle Group by CIF................................................................................................... 4-25

Table 4.3.13 Tax Rate on Vehicles in the MOF Drafted Tax System (ICE Vehicles) ........................ 4-26

Table 4.3.14 Tax Rate on Vehicles in the MOF Drafted Tax System (Other Energy Type Vehicles) 4-28

Table 4.3.15 Environmental Tax Rate ............................................................................................... 4-29

Table 4.3.16 Comparison of Vehicle Tax Amount between Current System and Draft Proposal ..... 4-30

Table 4.3.17 Comparison of Vehicle Tax Amount between Current System and Draft Proposal ..... 4-31

Table 4.3.18 Tax Revenue by Tax Category1) ................................................................................... 4-32

Table 4.3.19 Tax Revenue Share by Vehicle Type1) ......................................................................... 4-32

Table 4.3.20 Estimated Tax Amount for the 2015 – 2030 Period (in USD million) ........................... 4-33

Table 4.3.21 Classification by Vehicle Types.................................................................................... 4-35

Table 4.3.22 Value Group of Vehicles .............................................................................................. 4-36

v

Table 4.3.23 Proposed Tax Rates .................................................................................................... 4-37

Table 4.3.24 Proposed Tax Rate1) (Excise Tax for Private Use) ...................................................... 4-38

Table 4.3.25 Proposed Tax Rate1) (Road User Charge)................................................................... 4-38

Table 4.3.26 Proposed Tax Rate1) (Environmental Tax) ................................................................... 4-39

Table 4.3.27 Proposed Adjustment Rate in Trading Tax and Excise Tax for Private, Commercial and

Public Use ................................................................................................................... 4-39

Table 4.3.28 Share of No. of Vehicles by Purpose of Use ............................................................... 4-39

Table 4.3.29 Tax Revenue by Tax Category ..................................................................................... 4-40

Table 4.3.30 Tax Revenue Share by Vehicle Type ........................................................................... 4-41

Table 4.3.31 Comparison of Tax Revenues (2015 – 2030) for each Tax Category.......................... 4-41

Table 4.3.32 Comparison of Tax Revenues for each Vehicle Type .................................................. 4-42

Table 4.3.33 Comparison of Tax Amount between ICE Vehicles and EVs ....................................... 4-43

Table 4.3.34 Comparison of Lifecycle Cost between ICE Vehicles and EVs ................................... 4-44

Table 4.4.1 Required No. of Charging Stations .............................................................................. 4-49

Table 4.4.2 Installation Cost of Charging Stations .......................................................................... 4-50

Table 4.4.3 Charging Type and Installation Location ...................................................................... 4-50

Table 4.5.1 Target Audience and IEC Channel ............................................................................... 4-54

Table 4.7.1 Actions and Milestones to Establish a Sustainable, Energy Efficient and

Environmentally-friendly Transport System. ............................................................... 4-64

Table 5.2.1 Alternative EVs as for Replacement of Existing Public Transport Vehicles ................... 5-2

Table 5.2.2 Comparison of Normal Charger and Swapping System ................................................ 5-5

Table 5.2.3 Estimated Cost of E-trike Project in Vientiane Capital ................................................... 5-7

Table 5.2.4 Estimated Cost of E-trike Project in Luang Prabang ..................................................... 5-7

vi

LIST OF FIGURES Figure 2.1.1 Existing E-bicycles and E-motorcycles ........................................................................ 2-2

Figure 2.1.2 Assessment of E-motorcycles by Users in Luang Prabang ......................................... 2-3

Figure 2.1.3 E-cart used by a hotel in Luang Prabang ..................................................................... 2-5

Figure 2.1.4 Assessment of E-minibus by Passengers in Vientiane ................................................ 2-7

Figure 2.1.5 Existing Electric Minibuses in Lao PDR ....................................................................... 2-7

Figure 2.1.6 Existing Electric Car and Truck in Lao PDR ................................................................. 2-8

Figure 2.2.1 Methodology for Forecasting the Number of EVs/PHEVs ......................................... 2-15

Figure 2.2.2 EV Targets by Year ..................................................................................................... 2-16

Figure 2.4.1 Concept of Promoting Target Vehicles by Stage ........................................................ 2-27

Figure 2.4.2 Classified Spatial Structure for EV Introduction ......................................................... 2-30

Figure 2.4.3 EV Rental Scheme by Consortium in Goto ................................................................ 2-35

Figure 3.1.1 Process to Apply for Subsidy from Next Generation Vehicle Promotion Center .......... 3-2

Figure 3.1.2 Laws and Regulations Related to Vehicles .................................................................. 3-4

Figure 3.4.1 Organizational Structure of CEVA .............................................................................. 3-33

Figure 3.5.1 Seven Key Areas for EV Masterplan of Malaysia ...................................................... 3-36

Figure 4.2.1 Laws and Regulations related to Motor Vehicles in Lao PDR ..................................... 4-3

Figure 4.3.1 Characteristics of Selected Model Vehicles (2-3 wheel, Car, UV) ............................. 4-16

Figure 4.3.2 Characteristics of Selected Model Vehicles (Truck, Bus)........................................... 4-17

Figure 4.3.3 Tax Amount and Vehicle Parameters of Selected Models ......................................... 4-22

Figure 4.3.4 Proposed Framework for Vehicle Taxation ................................................................. 4-35

Figure 4.4.1 Laws Disposal Flow of EV Batteries .......................................................................... 4-48

Figure 4.4.2 Installation Procedures of EV Chargers ..................................................................... 4-51

Figure 4.4.3 V2H Block diagram ..................................................................................................... 4-52

Figure 4.5.1 Example of EV Promotion Body and Possible Institutional Set-up in Laos ............... 4-54

Figure 4.5.2 Logos for EV Campaign ............................................................................................. 4-56

Figure 4.5.3 Hand-on EV Sharing Model Project in Japan ............................................................ 4-57

Figure 4.5.4 Image of EV Human Resource Development in Lao PDR......................................... 4-59

Figure 4.7.1 Conceptual Flow of EV Study Group Set-up .............................................................. 4-65

Figure 5.2.1 E-trike Introduction Mechanism .................................................................................... 5-4

Figure 5.2.2 Candidate Locations of Charging Stations in Vientiane Capital................................... 5-5

Figure 5.2.3 Candidate Locations of Charging Stations in Luang Prabang ..................................... 5-6

vii

LIST OF BOXES Box 2.1.1 Use of E-motorcycle by Ms. N .......................................................................................... 2-4

Box 2.2.1 Target Level of EV Use in Lao PDR (JICA Study, 2012) ................................................ 2-15

Box 2.4.1 Comparison of Battery Types ......................................................................................... 2-28

Box 2.4.2 Example of EV in Tourism Areas .................................................................................... 2-34

Box 3.3.1 NEV/LSV and Golf Cart On-Road Registration Checklist .............................................. 3-30

Box 4.2.1 Draft MPWT Order on Low-emission Vehicles ................................................................. 4-8

Box 4.2.2 Example of a Vehicle Compliance Certificate .................................................................. 4-9

Box 4.3.1 Calculation of Lifecycle User Cost of Vehicles ............................................................... 4-13

Box 4.5.1 Electric Vehicle Project in National University of Laos ................................................... 4-58

viii

ABBREVIATIONS AC alternative current ACEA European Automobile Manufacturers' Association ADB Asian Development Bank AISBL Association Internationale Sans But Lucratif AMS ASEAN Member States AMAVE MC2D – Monaco Développement Durable ANSI American National Standards Institute APEV Association for the Promotion of Electric Vehicles APVE Associação Portuguesa do Veículo Eléctrico ARF additional registration fee ARRA American Recovery and Reinvestment Act of 2009 ASBE Belgian Electric Vehicle Association ASEAN Association of Southeast Asian Nations AVELE Asociación para la Promoción de los Vehículos Eléctricos y No Contaminantes de

España AVERE European Association for Battery, Hybrid and Fuel Cell Electric Vehicles BAEPS Bulgarian Electric Vehicle Association BEV business electric vehicle BEVT business electric vehicle time-of-use BOCM Bilateral Offset Credit Mechanism BRT bus rapid transit BSM German Federal Association Solar Mobility e.V. CC cubic centimeters CEN Comité Européen de Normalisation CENELEC Comité Européen de Normalisation Electrotechnique CEPT Common Effective Preferential Tariff Scheme CEVA China Electric Vehicle Association CEVS Carbon Emissions-based Vehicle Scheme CHP California Highway Patrol CIF cost, insurance and freight CITELEC Association of European Cities interested in Electric Vehicle CIVES CommissioneItaliana Veicoli Elettrici Stradali CNG compression natural gas CO carbon oxide CO2 carbon dioxide COP code of practice CVRP Clean Vehicle Rebate Project DC direct current DEVS Slovenian Electric Vehicle Association DOE Department of Energy DOR Department of Road DOT Department of Transport DPWT Department of Public Works and Transport DTP Department of Traffic Police DVD digital video disc EAA Electric Auto Association EASTS Eastern Asia Society for Transportation Studies EBC electric bicycle EC European Commission EDB Economic Development Board EDL Electricite du Laos EDTA Electric Drive Transportation Association EEO European Electro-Mobility Observatory

ix

EGCI European Green Cars Initiative EIA environmental impact assessment EMA Energy Market Authority EMC electric motorcycle EMC electromagnetic compatibility EMP environmental management plan EPA Environmental Protection Agency ERIA Economic Research Institute for ASEAN and East Asia ERTRAC European Road Transport Research Advisory Council EST Environmental Sustainable Transport ETP European Technology Platform ETSI European Telecommunications Standards Institute EU European Union EUR euro EV electric vehicle eVAP Electric Vehicle Association of the Philippines EVSE electric vehicle supply equipment EVSP Electric Vehicles Standards Panel FCV fuel cell vehicle FHWA Federal Highway Administration FMVSS Federal Motor Vehicle Safety Standards FP Framework Programme FY fiscal year GB Guo Biao (National Standard of China) GBP great british pound GCSFP German-Chinese Sustainable Fuel Partnership GEC Global Environment Center GFCI ground fault circuit interruption GHG greenhouse gas GMS Greater Mekong Subregion GVW gross vehicle weight GVWR gross vehicle weight rating HC hydrocarbon HEL.I.E.V Hellenic Institute of Electric Vehicles HEV hybrid electric vehicle HOV high-occupancy vehicle HP horsepower HyER European Association for Hydrogen and Fuel Cells and Electro-Mobility in European

Regions ICD inland container depot ICE internal combusion engine IEC information and education campaign IEE Intelligent Energy Europe IRG international research group ISO International Organization for Standardization IT information technology ITA investment tax allowance ITS Intelligent Transportation System JAMA Japan Automobile Manufacturers Association JARC Japan Automobile Recycling Center JASH Japan Association of Small Hundreds JASIC Japan Automobile Standards Internationalization Center JCM Joint Crediting Mechanism JEWA Japan Electrical Wiring System Industries Association JICA Japan International Cooperation Agency

x

JPY Japanese yen KeTTHa Ministry of Energy, Green Technology and Water (Indonesia) LAK Lao kip Lao PDR People's Democratic Republic LCV light commercial vehicle LEV light electric vehicle LEVA Light Electric Vehicle Association Li-ion lithium ion LPG liquefied petroleum gas LPP Laos Pilot Program for Narrowing the Development Gap towards ASEAN Integration LRT light rail transit LSEV low-speed electric vehicle LSV low speed vehicles LTA Land Transport Authority MC motorcycle MCPC Ministry of Communication, Post and Construction MEM Ministry of Energy and Mines METI Ministry of Economy, Trade and Industry MEVA Malaysia Electric Vehicle Association MFN most favored nation MLIT Ministry of Land, Infrastructure, Transport and Tourism MO Ministry Order MOE Ministry of Environment MOF Ministry of Finance MOIC Ministry of Industry and Commerce MoICT Ministry of Information, Culture and Tourism MONRE Ministry of Natural Resources and Environment MOST Ministry of Science and Technology MP middle price MPV multi-purpose vehicle MPWT Ministry of Public Works and Transport NA National Assembly NEC National Electrical Code NEV neighborhood electric vehicles NFPA National Fire Protection Agency NGO non-governmental organizations NH national highway NHTSA National Highway Traffic Safety Administration NMT non-motorized transport NORSTART Norwegian Electric Vehicle Association NOx nitrogen oxides NREL National Renewable Energy Laboratory NUOL National University of Laos NZ New Zealand ODA official development assistance PDD project design document PHEV plug-in hybrid electric vehicle PHV plug-in hybrid vehicle PI positive ignition PIU project implementation unit PM particulate matter PNS Philippine National Standards PO Prime Minister Order PPP public private partnership PSEA Pedestrian Safety Enhancement Act

xi

R&D research and development REESS resistance of rechargeable energy storage systems RMB Rénmínb RMF Road Maintenance Fund RUC road user charge RSS rechargeable energy storage system SAE Society of Automotive Engineers SDO standards developing organizations SEDP Socio-Economic Development Plan SOC state of charge STOM Senior Transport Officials Meeting SUGRE Sustainable Green Fleets SUV sports utility vehicle THB Thai Baht THC Tetrahydrocannabinol TPD Traffic Police Department UK United Kingdom UL underwriters laboratories UN United Nations UNECE United Nations Economic Commission for Europe US United States US United States of America USD United States Dollar UV utility vehicle V2G vehicle to grid V2H vehicle to home VAT value added tax VCSBE Vientiane Capital State Bus Enterprise VIN vehicle identification number VOC vehicle operating cost VRIM vehicle registration and inspection management WREA Water Resources and Environment. Administration ZEV zero emission vehicles

Main Text

The Preliminary Works for the Technical Cooperation on Low-Emission Transport System FINAL REPORT

Chapter 1 Introduction

1-1

1 INTRODUCTION

1.1 Study Context

(a) Activities of LPP: The Laos Pilot Program (LPP) has been conducted to spread the good development practices of Lao People’s Democratic Republic (PDR) to the Association of Southeast Asian Nations (ASEAN). This is a technical assistance program for environment, tourism and agricultural sectors. The main activities include the promotion of an environmentally sustainable city, and tourism promotion utilizing tourism resources related to nature, culture and history of Lao PDR properly and sustainably.

(b) Deterioration of Traffic Condition: Accompanying the country’s economic growth, which has been on a positive track since 2005 (that is, at a rate of more than 7% annually), is an increasing traffic volume. Lao PDR’s passenger traffic and the number of registered passenger vehicles in the capital city of Vientiane increased by about 1.5 and 3.4 times, respectively, during the period 2000–2010. The significant increase in traffic volume has caused traffic congestion in the urban areas of Vientiane and other cities, especially in the morning and evening peak hours, thereby affecting the socioeconomic activities of citizens and worsening the urban environment. It is forecast that the economy of Lao PDR will continue to grow by 8% annually after 2012. With this continuous high economic growth, it is estimated that by 2020 the number of passenger cars in the country will be three times its 2010 level and further rising to six times this level by 2030. The average travel speed will decrease to about 20 kilometers per hour (km/h), which is the same as that in Tokyo.

(c) Energy Policy: Since Lao PDR depends entirely on imported fuel, the rapid increase in the number of vehicles has ramifications on national finance and energy security. It is predicted that by 2020, the total retail value of fuel consumed by road transport would hit USD1,430 million and USD2,296 million by 2030. On the other hand, the country is rich in clean energy resources. In fact, it can supply more than 30 times the domestic demand for hydroelectric power and promote the export of electricity to neighboring countries such as Thailand, which has a large demand for electricity. The government of Lao PDR has focused on the energy sector as one of the top priority issues in its socioeconomic development plan because aside from earning foreign currency revenues from energy resources, they also contribute to domestic energy development. Lao PDR depends entirely on imported petroleum products and exports electricity. However, this is an undesirable situation in terms of the environment, national finance, and energy security. Considering that most of the petroleum products are consumed in the transport sector, there is a possibility to address the various issues related to the environment, national finance, and energy security comprehensively by replacing conventional vehicles with electric vehicles (EVs)/ plug-in hybrid electric vehicles (PHEVs).

(d) Implementation of “Basic Data Collection Study on Low-Emission Public Transport System in Lao PDR”: The use of EVs and PHEVs increases the attractiveness of sustainable cities and tourism resources, which the LPP aims for. For this purpose, the Japan International Cooperation Agency (JICA) conducted the “Basic Data Collection Study on Low-Emission Public Transport System in Lao PDR” in 2012. This basic study (i) identified the lessons learnt for Lao PDR by classifying

Roadmap for Transport Infrastructure Development for Metro Manila and Its Surrounding Areas (Region III & Region IV-A) DRAFT FINAL REPORT Chapter 1 Introduction

1-2

the EV/PHEV introduction policy in developed countries and technical issues, (ii) clarified the advantages and disadvantages of introducing EVs/PHEVs in Lao PDR, and (iii) proposed the priority actions for promoting EVs/PHEVs in Lao PDR. Assuming that 100% of motorcycles and minibuses and 50% of other vehicles were replaced with EVs/PHEVs by 2030, Lao PDR can save USD6,456 million in the period 2015–2030 from fossil fuel. In exchange for saving fossil fuel by introducing EVs, it is estimated that electric consumption of EVs/PHEVs would reach USD184 million by 2030, but their additional electric demand would be less than 7% of the forecast electric generation in 2020. Therefore, additional investment in electric generation plants is not necessary. Moreover, the positive environmental impacts of introducing EVs/PHEVs will be very significant: They will have zero emissions of nitrogen oxides (NOx), hydrocarbons (HC), particulate matter (PM), and other pollutants. Carbon dioxide (CO2) emissions, which contribute to climate change, will also be zero because hydropower generation has zero grid CO2 emissions. Thus, Lao PDR can be a model for zero emission transport. Promoting a low-emission transport system can: (i) solve pollution, such as air and noise pollution, emanating from traffic; (ii) promote the attractiveness of cities in Lao PDR as being tranquil and compact cities surrounded by cultural and historical heritage, as well as nature; (iii) improve the overall public image of Lao PDR; and (iv) develop the tourism sector, which is the country's main industry. The new transport system can produce synergy for the tourism and environmental components of the LPP.

1.2 Study Objective, Coverage, and Counterpart Agency

1.1 The study aims to implement the following priority actions identified in the JICA-funded basic data collection study done in 2012:

(i) Build the framework of policies and related institutional system for introducing and promoting EVs/PHEVs;

(ii) Investigate the framework of regulations for operating EVs/PHEVs safely; and (iii) Propose promotion activities and model projects for introducing EVs/PHEVs

effectively. 1.2 The study area covers the entire Lao PDR, while model project planning is done for the cities of Vientiane and Luang Prabang, the latter being a World Heritage City.

1.3 The main counterpart agency for the study is the Ministry of Public Works and Transport (MPWT), with the Ministry of Information, Culture and Tourism (MoICT), the Ministry of Energy and Mines (MEM), as well as the city governments of Vientiane and Luang Prabang City comprising the other stakeholders.

1.3 Study Implementation

1.4 The study commenced in March 2013 and ended in February 2014. The main activities undertaken in the Study are the following: (i) submission of the Inception Report on 8 April 2013; (ii) submission of the Progress Report on 4 September 2013; (iii) holding of the workshops on 2 May 2013 and on 9 January 2014 to share the outputs of the Study and make discussions; (iv) conduct of meetings with relevant agencies including the MPWT, MEM, Ministry of Finance (MOF), private sector, and others; (v) formulation of the revised vehicle tax system to the MOF with due consideration to EV promotion; and (vi) visits to model project sites and others.


Chapter 2 Electric Vehicles in Lao PDR

2-1

2 ELECTRIC VEHICLES IN LAO PDR

2.1 Current Status of EV Introduction in Lao PDR

1) General

2.1 Although the government institutional system for EVs has not yet been established, the private sector has started introducing EVs in the market. China, Lao PDR's neighbor, is well-known for its huge numbers of electric motorcycles1 and many small- and medium-sized EV manufacturers. This has resulted in the introduction of EVs in Lao PDR. Today, many types of EVs (i.e., motorcycles, small cars, minibuses, trucks, etc.), all made in China, are available in Lao PDR, together with electric motorcycles from Taiwan.

2.2 At the start, EV manufacturers viewed Lao PDR as a small market because of its small population. In the last few years, however, the situation has changed. Because of its proximity to China, many Chinese EVs have been sold in Lao PDR. Due to their affordable prices and availability, these vehicles, especially e-motorcycles, are expected to increase even without government promotion. E-minibuses and e-carts can also be promoted by the private sector since there is a demand for them.

2.3 While it is good that EVs will be promoted by the private sector, there are also risks in promoting EVs without the appropriate institutional support. Unplanned and disorderly EV promotion will cause other problems such as traffic accidents, environmental problems from battery disposal sites, etc.

2) E-bicycles and E-motorcycles

2.4 The electric-assisted bicycle (e-bicycle) is the smallest EV in Lao PDR and is mainly used for tourism. The e-bicycle program in Luang Prabang, for example, is a fun and eco-friendly way to explore tourist sites such as national museums, temples, and traditional villages.

2.5 Apart from the e-bikes for tourists, other e-bikes can be seen all over the country. However, those used by many residents are actually mopeds, which are categorized as a type of electronic motorcycle. This and the scooter are the two types of e-motorcycles common in the streets of Lao PDR.

2.6 Chinese e-motorcycles were introduced in the country some years ago. At that time, many e-motorcycles were seen not only in Vientiane Capital but also in Luang Prabang City, Kayson Phomvihane, and other cities. Subsequently, however, most of these e-motorcycles disappeared from the roads because e-motorcycle dealers did not provide the after-sales services for maintenance, repair, parts replacement, etc. Without such services, users had difficulty in continuing to use the e-motorcycles. They were also concerned about disposal of used batteries since there was no standard practice for disposing lead batteries from e-motorcycles. Some e-motorcycles are just sleeping at the garages because people do not know how to scrap them.

2.7 Meanwhile, Taiwanese e-motorcycles with pedals, called ASAMA, are very popular in Luang Prabang City, especially among students and women (see Figure 2.1.1). The results of a traffic attitude survey (JICA, 2012) show that 2.2% and 2.0% of households

1 According to Xinhua News Agency, there were 120 million e-motorcycles in China in 2009. According to an e-bike

The Preliminary Works for the Technical Cooperation on Low-Emission Transport System FINAL REPORT Chapter 2 Electric Vehicles in Lao PDR

2-2

have e-motorcycles and e-bicycles, respectively. However, more e-motorcycles can be seen in the city center and school areas of Luang Prabang City. On fully charged batteries, these e-motorcycles can run up to about 30 km at an average speed of 20 km/h.

E-bicycle used by tourists

in Luang Prabang

E-motorcycle in Vientiane

E-motorcycles used by

students in Luang Prabang

E-motorcycle shop

in Vientiane

E-motorcycle shop

in Vientiane

E-motorcycle promotion

campaign Source: JICA Study Team

Figure 2.1.1 Existing E-bicycles and E-motorcycles

2.8 According to an EV user survey (JICA, 2012), more than 60% of users are satisfied with the general condition of e-motorcycles. Not many users assessed e-motorcycles negatively (see Figure 2.1.2). However, the price of e-motorcycles and charging time may need to be improved. Nevertheless, users have not faced serious problems for repair, battery replacement, and others even after using the e-motorcycles for 2-3 years.

2.9 Considering two cases, the Chinese e-motorcycles and Taiwanese e-motorcycles, it can be said that there is demand for e-motorcycles if the quality and service are good enough. According to the potential EV user survey (JICA, 2012), 4% and 13% of households are interested in using e-motorcycles in Vientiane Capital and Luang Prabang. After conducting this survey in September 2012, the Lao Government announced that people who buy e-motorcycles will pay an excise tax that is 20% lower than that charged for fuel-powered motorbikes. The government aims to save foreign currency by cutting fuel imports for motorcycles as well as promote the more environment-friendly transport system. This government incentive will bring more e-motorcycle dealers and users.



2-3

Source: Current EV User Survey (JICA, 2012)

Figure 2.1.2 Assessment of E-motorcycles by Users in Luang Prabang

2.10 However, e-motorcycles cannot be registered under the current system. This means that e-motorcycle users cannot have insurance because vehicle registration is one of the requirements for getting vehicle insurance in Lao PDR. Furthermore, since there is no registration, the number of e-motorcycles in Lao PDR cannot be known. Many neighboring countries have the same situation including China, but more than 100 million e-motorcycles are used in China. So, there is a possibility for Lao PDR to be like China, with an increasing number of unregistered e-motorcycle users.

2.11 If the number of e-motorcycles increases in Lao PDR with the government doing nothing, the country would face the following problems:

(i) Poor quality e-motorcycles will be sold in the market again; (ii) The government cannot clarify the actual situation of e-motorcycle introduction and

promotion; (iii) Uneducated users, in terms of traffic rules and driving skills, will start driving the

motorcycles on public roads because a driving license is not required for e-motorcycles;

(iv) E-motorcycle drivers do not need to follow the traffic rules since e-motorcycles are not defined as vehicles;

(v) E-motorcycle users may not be able to pay compensation for damages from traffic accidents without insurance; and

(vi) Used batteries will cause environmental problems without any proper manner of disposal.

2.12 The currently available e-motorcycles in Lao PDR still have low quality compared to conventional vehicles. However, technologies continue to be developed day by day. When better quality e-motorcycles, especially in terms of speed, become available they will be a threat to the road users under the present situation.

0% 20% 40% 60% 80% 100%

1. Overall impression

2. Riding comfort

3. Travel speed

4. Vehicle design

5. Price of e-bike

6. Charging time

Very good Good So-so Bad Very bad


2-4

Box 2.1.1 Use of E-motorcycle by Ms. N

1. Background: Ms. N purchased an e-motorcycle for her daily activities and monitored the performance on its use during the period of August and October 2013.

2. Purchase of the E-motorcycle: Ms. N purchased Fino (Queen) at JW dealer from Taiwan in the center of Vientiane, which costs THB26,000. The maximum speed of Fino is 60 km/h. The warranty period of this e-motorcycle is one year. The battery replacement cost is THB1,000 /unit.

3. Main Areas of Using the E-motorcycle: The main travel range is from home to MPWT (2.2 km/direction) and to the city center (3-7 km/direction).

4. Assessment of the Performance: 1) Driving: Compared to a gasoline motorcycle, the e-motorcycle felt slow even at a

maximum speed of 60 km/h. One of the reasons is that the maximum speed decreases in accordance with the remaining battery capacity. Fino does not have an odometer, so the possible travel distance is unknown. However, it is estimated to be about 30 km. The e-motorcycle does not have a feature similar to an engine brake. Even easing up on the accelerator, the e-motorcycle does not slow down as much as a gasoline motorcycle does.

2) Problems due to vehicle characteristics: Due to the light body of the e-motorcycle, bumps due to poor road conditions could be felt more strongly than that on a gasoline motorcycle. The e-motorcycle slipped easily at curves with scattered sands. Moreover, water-proofing is not enough, so there is a possibility of an electric leak.

3) Safety: Ms. N was worried that other motorcycle users would not hear her approach and rush at intersections at night due to the quietness of her e-motorcycle, but it did not happen. The awareness of people about traffic safety in Lao PDR is poor, so drivers are careful when driving.

4) Registration and insurance: E-motorcycles are not defined by a law in Lao PDR. Thus, vehicle registration and driving licenses for e-motorcycles are not required, which can also be an advantage. On the other hand, it is very difficult to apply insurance for this, because insurance companies do not accept e-motorcycles because it is not defined by law.

5) Charging facilities: Most of the motorcycle parking spaces have power outlets, so it was easy for Ms. N to charge her e-motorcycle outside her home. In general, Ms. N asked permission to use those outlets, and nobody refused her. However, those power outlets are not installed properly in many places. In some cases, a power cable cannot be fully inserted. In other cases, sparks erupt when a power cable is inserted. Because not all power equipment are installed by professional electricians, it is advisable to check each condition by professionals.

5. Perception of People about e-motorcycles: Laotians think that THB26,000 for an e-motorcycle is not so expensive. However, they expected a maximum speed of more than 60 km/h. One of the reasons why they need higher speeds is to escape from burglars. Recently, there are many cases of motorcycle-riding burglars attacking other motorcycle/bicycle drivers. Therefore, people feel that it is safe to have higher maximum speeds.

6. Observed Issues and Suggestions: In order to promote e-motorcycles, the development and improvement of roads are a crucial issue. Poor road conditions damage e-motorcycles and cause accidents. The second issue is to establish a regulation for e-motorcycles. While e-motorcycles are slower than gasoline motorcycles, they can be driven at 60 km/h. Therefore, drivers should apply for an insurance coverage and undergo traffic safety education. Tt should also be studied whether or not e-motorcycles should be classified as motorcycles or fall under a new category. The last issue is the quality of the body. Considering the use of e-motorcycles during the rainy season, water-proofing should be properly done. In case e-motorcycles need to be promoted under current conditions, one of the opportunities is to introduce them as rental service for tourists. In general, tourists travel only along paved roads. Since fares of tuktuk are relatively expensive, tourists can enjoy driving e-motorcycles if they can be rented out at reasonable fees.



2-5

2.13 On the other hand, there are also several constraints in promoting e-motorcycles, as follows:

(i) Speed of e-motorcycles: In encouraging conventional motorcycles users to shift to e-motorcycles, people prefer to drive more than 70km/h along national roads. Therefore, those users may feel the e-motorcycle is too slow.

(ii) Cruising range: In general, the distance range of e-motorcycles is about 30-45 km. Considering commuting distance and battery charging at the offices/schools, this is enough range for cities in Lao PDR. However, people who do not think about charging at offices/schools or other places, feel this range is not enough for them.

(iii) Charging spots: E-motorcycles can be charged from the ordinary sockets at garages or parking lots. This is one of the advantages and attractiveness of e-motorcycles. There are many available sockets at restaurants, parking spaces, etc. in Lao PDR. However, these electric facilities are not always built by professionals. In such cases, there is a risk of causing fire.

(iv) Road infrastructure: Chinese e-motorcycles can absorb less shock from roads. Many roads are not paved or not well-maintained. Therefore, drivers feel more shocks from those poor road conditions as compared to driving conventional motorcycles.

3) E-cart

2.14 In Luang Prabang, the electric cart (e-cart) is used by hotel guests for going around the town free of charge. One hotel (Mekong Riverview Hotel) introduced the e-cart because it is comfortable to use and emits neither sound nor pollutants. There is no specific technician in the hotel for e-carts, but they do not have any problem with maintenance and operation of these vehicles. The battery of an e-cart can last for about 2-3 years. They also plan to buy some more e-carts.

2.15 E-carts are suitable for small and relatively flat cities like Luang Prabang. The bicycle is one of the major means to go around the center of Luang Prabang City. However, e-carts can be one of the alternatives. If other hotels/guesthouses see the benefits of introducing e-carts, they may follow this trend.

Source: JICA Study Team

Figure 2.1.3 E-cart used by a hotel in Luang Prabang

4) E-trikes

2.16 Another small type of EV is the electric tuktuk (e-trike). There was a small pilot project to introduce e-trikes in Pakse some years ago, starting with two e-trikes. This project, though, failed due to the many slopes, poor condition of road surface, and slow speed. The e-trike was not able to survive under these local conditions.


2-6

2.17 However, the Philippines and Thailand have already started to introduce e-trikes to replace conventional tricycles or tuktuk. The technologies are there. The main issue is the introduction cost, because the price of conventional tricycles or tuktuk is very cheap compared to the electric one. In the case of Lao PDR, the tuktuk and jumbo cost about THB50,000 (~USD1,550) and THB30,000 (~USD930), respectively. On the other hand, an e-trike costs more than USD5,000. The initial investment cost for an e-trike can be recovered considering its lifecycle. However, USD5,000 as initial investment is still too expensive for tuktuk and jumbo drivers. It is difficult to propagate the use of e-trikes in Lao PDR unless a good financial support mechanism will be established.

5) E-minibuses

2.18 In the recent past, Vientiane Capital and Kayson Phomvihane City introduced electric mini-buses (e-minibuses) from China into the public transport system. In Vientiane, the Vientiane Capital State Bus Enterprise (VCSBE) started to operate 13 e-minibuses (8-seater and 12-seater) in 2009. The supplier of e-buses is Yunnan Taixing Mining Company in China. In the beginning, the fare of the e-minibus was 1,500 LAK/ride, but this increased to 2,000 LAK/ride in 2011. VCSBE has 13 e-minibuses, but it does not mean that it can operate 13 e-minibuses always. The battery of the e-minibus lasts less than a year, and a replacement battery is quite expensive; THB44,000/set (~USD1,300) for an 8-seater e-minibus and THB66,000/set (~USD2,050) for a 12-seater e-minibus. On the other hand, the average annual fare revenue per e-minibus is less than USD4,000. As of August 2013, only one e-minibus was operating. The e-minibus is not a profitable business for VCSBE.

2.19 According to VCSBE, they have been facing two main problems. One is for maintenance, and another is for operation. E-minibuses are difficult to maintain mainly due to the lack of technicians for e-minibuses and their batteries. They also do not have the appropriate equipment to maintain batteries. Used batteries for disposal are sold to shops. There are some Vietnamese who buy disposed batteries. On the operations side, the drivers do not care about the number of passengers. E-minibuses are always overloaded, which affects the capacity and accelerates the deterioration of their batteries. In addition, e-minibuses can only run short distances, so their possible route options are limited.

2.20 In Kayson Phomvihane, a private company (ITECC) introduced 20 e-minibuses (23-seater) as a bus loop service. The fare is 2,000 LAK/ride. ITECC also does not have its own technicians for e-minibuses. In ITECC's case, Power Pro (battery production factory in Savannakhet) provides training for the technicians of ITECC as volunteers to sustain their e-minibus operation in Kayson Phomvihane. However, as of August 2013, ITECC also faced the battery problems. Due to this, the company's service frequency is not stable. In addition, the electric cost for e-minibuses was not as cheap as they expected.

2.21 The operators have encountered many problems with their e-minibuses, but passengers have relatively better impressions on their overall conditions (see Figure 2.1.4). While there are many points of improvement, especially travel speed, 89% and 43% of households in Vientiane and Luang Prabang City desire to use e-buses.



2-7

Source: Current EV User Survey (JICA, 2012)

Figure 2.1.4 Assessment of E-minibus by Passengers in Vientiane

2.22 The operators of e-minibuses have problems mainly with batteries. However, improving the maintenance and operation system of e-minibuses can significantly change this situation. The quality of the Chinese battery is lower than that of the Japanese one. However, Chinese products can still be utilized in Lao PDR if the operator provides an appropriate operation and maintenance system.

E-minibus and its chargers

in Wat Phu

E-minibus in Luang Prabang

E-minibus in Vientiane

E-minibus in Vientiane

E-minibus in Kayson Phomvihane


Figure 2.1.5 Existing Electric Minibuses in Lao PDR

6) E-car

2.23 In Vientiane, there are two e-car dealers, namely BYD and Sun Laos. Both of them sell Chinese EVs. Even with a tax reduction treatment to import their EVs, Sun Laos is having a hard time passing the Customs Office. They sold some e-cars to the ordinary customers as well as received some orders from hotels. They also plan to operate an EV taxi service in Vientiane Capital and Luang Prabang City.

2.24 BYD just started to sell their EVs (e6). A unit costs USD65,000, and cruising

0% 20% 40% 60% 80% 100%

1. Overall impression

2. Riding comfort

3. Travel speed

4. Vehicle design

Very good Good So-so Bad Very bad


2-8

distance is about 300km/charge. The price is still very expensive, but the BYD dealer aims to sell five EVs to some rich people within 2013. However, besides its price, the problem is the battery charging infrastructure for EVs in the city.

2.25 Considering the size of the major cities in Lao PDR, the driving range of EVs (about 100 km) is enough for daily use. However, the availability of charging stations will be one of the biggest concerns of e-car users. It is hard to expect that the private sector will voluntarily install charging stations in public areas. This is a chicken-and-egg situation. Users will not buy if there are no public charging stations. The private sector cannot invest in charging infrastructure until there are many EV users. Therefore, the government should develop a charging infrastructure network to trigger the introduction of e-cars. Without such infrastructure, it is very difficult to promote e-cars in the market.


Figure 2.1.6 Existing Electric Car and Truck in Lao PDR



2-9

2.2 Current EV-related Policies and Proposals

1) Current Government Policies

2.26 Although EVs are still new in Lao PDR and in other ASEAN countries, there are already several cases involving the introduction of EVs for both public and private use. In response to this and the JICA study on low-emission vehicles in 2012, the MPWT and the MOF have started to include EVs in related laws and regulations.

(a) National Strategy and Action Plan on Environment Sustainable Transport

2.27 While there is no transport development master plan at the national and local levels except for Vientiane Capital, the National Strategy and Action Plan on Environmental Sustainable Transport, Lao PDR (EST Strategy) submitted to the Vice Minister of MPWT, will function as a sort of national transport development plan in Lao PDR.

2.28 The vision of EST Strategy is to "manage and promote the land transport to be convenient, connected, safe, modern, barrier free, sustainable and environment friendly." In order to realize this vision, the following six goals are aimed at:

(i) Promotion of goods and passenger transportation using electricity, domestic potential energies and low-emission energies;

(ii) Promotion of transportation for remote areas and national defense-security strategy areas;

(iii) Promotion of multimodal goods transportation and modern goods distribution center;

(iv) Implementation of incentive policy for investors for establishing distribution center and inland container depot (ICD) which focus on the rapid service and cheap cost of goods transport with modern technology;

(v) Promotion of goods and passenger transport association to have overall strength and to be ready for international competition; and

(vi) Promotion of the urban public transportation which is convenient, punctual, sustainable and environment friendly.

2.29 In the relation to the first goal, the main targets by 2020 include reduction of CO2 emission from land transport by 268,500 tons, reduction of fuel consumption to 416 million liters per year, and increase in fuel consumption efficiency by double. Other targets are to control land transport costs that are competitive to other countries, to increase the public transport share (e.g., trolley bus, EV, bus, taxi, LRT, BRT, etc.) by 20% of modal share, and to provide an urban traffic transport system with affordable price.

2.30 The action plan in the EST Strategy is composed of the following:

(i) Use EVs for private and public purposes;

(ii) Change the old goods and passenger vehicles to new ones;

(iii) Increase the public transport network in the urban area;

(iv) Apply Euro 4 as fuel standard;

(v) Improve the quality of driving schools (eco drive mode and safety mode);

(vi) Improve the quality of board of directors for goods and passenger transport in the


2-10

business administration;

(vii) Improve the vehicle inspection system to become more modern and strict;

(viii) Develop a multi-modal public transport system (trolley bus, LRT, BRT, Bus stop, NMT, etc.)

(ix) Implement the laws more strictly; and

(x) Promote public involvement in a sustainable transport system.

2.31 According to its six goals, the EST Strategy focuses on a low-emission transport system, transportation in rural areas, logistics and public transport system. However, the implementation strategies including action plans and priority projects to support those focal points are not stated enough in the EST Strategy. In addition, most of the priority projects are those proposed by international organizations (see Table 2.2.1). The strong commitment or leadership of the government cannot be seen from the EST Strategy. The lack of appropriate strategies for each focal point leads to a lack of action plans and priority projects, especially those which can be implemented by the Lao Government.

Table 2.2.1 Priority Projects in the EST Strategy of Lao PDR

No Projects and Their Components Budget

(USD mil.) Fund Source Schedule

1

Green Freight Transport System

1) Create information and cooperate on green freight transport, 2) Create the

fund and maintenance of old goods and passenger vehicles, 3) Training the

drivers and training the directors of transport companies

60 ADB 2014-2020

2 Project to Enhance the Capacity of Vientiane Capital State Bus Enterprise

1) Purchase new 42 buses, 2) Human resource development 10 JICA 2013-2014

3

Vientiane Sustainable Urban Transport

1) Parking area, 2) Mini bus, 3) Improve the management of urban transport, 4)

Traffic control center

35 ADB/Lao Government 2014-2018

4

Low-Emission Public Transport System in Lao PDR

1) Infrastructure, 2) Purchase electric vehicles (EVs), 3) Human resource

development

23 JICA 2013-2020

5 Basic Study on Lao–Vietnam in-full Transportation 0.5 Lao and Vietnam

Governments 2013-2016

6 Bilateral Offset Credit Mechanism “BOCM” 10 Proposed to Japanese

Government 2014-2017

7 Modernization of Vehicle Registration System 5 Lao Government 2014-2017

8 Emission and Spareparts Test Center 30

Lao

Government/International

organization

2015-2020

9 Driving School Development to International Standard 20 Lao Government/Private

sector 2015-2020

10 Improvement of Technical Inspection Center 30 Lao Government/Private

sector 2015-2020

11 Improvement of Modern Road Transport Control Center 40

Lao


organization

2014-2020

12 Traffic Management Center 10

Lao


organization

2016-2020

13 Basic Study onLao-Thai in-full Transportation 0.5 Lao and Thai Governments 2015-2017

14 Light Rail Transport in Vientiane Capital 1,600

Lao


organization

2017-2020



2-11

No Projects and Their Components Budget

(USD mil.) Fund Source Schedule

15

Sustainable Transport in Champasak Province



35

Lao


organization

2017-2020

16

Sustainable Transport in Luang Prabang Province



35

Lao


organization

2017-2020

17

Sustainable Transport in Savanhnakhet Province



35

Lao


organization

2017-2020

18

Sustainable Transport in Khammuan



35

Lao


organization

2017-2020

19 Public Transport Law 0.15 Lao Government 2015-2017

20 Party of International Convention of Vehicle Regulation (1958

Agreement)UNECE 2 Proposed to JICA

21 Non-Motorized Transport 2 ADB 2013-2014 Source: National Strategy and Action Plan on Environmental Sustainable Transport, Lao PDR

(b) Registration and Driving License for EVs

2.32 There is no specific regulation on registration and operation of EVs. In the vehicle technical certification, the types of energy or fuel are identified. Therefore, EVs can also be certified. However, in actual situation, the electric motorcycle cannot be registered under the current system. Since the registration is not required for e-motorcycles, the driving license for EVs is also not required.

(c) Vehicle Taxation System on Low-Emission Vehicles

2.33 MOF is preparing the amended vehicle tax system to be issued in October 2013. Under the amended system, low-emission vehicles including all EVs are considered. Under the current system, only e-motorcycles are considered. E-motorcycles have a 20% reduction in excise tax as compared to conventional motorcycles. The government hopes this tax incentive will encourage more people to opt for electric motorbikes, amid a surge in the use of fuel-powered vehicles. However, it is uncertain how many people know about this incentive even if it has been published in the newspapers.

2.34 In addition, there is a special case of tax reduction on importation of EVs for selling in Lao PDR. There was no special tax rate on EVs under the current vehicle tax system, but a special tax rate (1% of import tax) was applied for 300 EVs imported from China. This kind of special case can be issued by Presidential Order. In addition, according to the Ministry of Planning and Investment, there is a possibility to reduce the corporate tax for investors/enterprises that use EVs for their businesses.

2) EV Introduction and Proposals in Lao PDR

2.35 EV introduction in Lao PDR cannot be realized without the strong commitment of the Lao Government. In order to show such commitment, EV introduction should be stated clearly in the 5-year National Socioeconomic Development Plan (SEDP) of Lao PDR and the environmentally sustainable transport strategies. EV introduction goes beyond a simple change of vehicle propulsion from ICE to electric, but must be framed in the context of what makes transport sustainable in several dimensions--that is, environmental, technical, social, and economic. The SEDP, which sets forth the development directions of Lao PDR, can lead all relevant agencies towards EV


2-12

introduction and promotion. The required strategies and actions for EV introduction cover various sectors. Therefore, the statement in the SEDP plays a significant role in encouraging the Lao Government to promote EVs.

2.36 One of the overall targets of the 7th SEDP (2011-2015) is to ensure sustainable development by integrating economic development with socio-cultural development and environment protection to the nation's advantage. However, although the transport sector is one of the biggest sectors causing emissions, promotion of a low-emission transport system is not stated in the overall development strategies. As mentioned earlier, in order to promote a low-emission transport system in Lao PDR, especially EVs, not only the transport sector but also other sectors have to take action for it. It is advisable to put the following statement as one of the general development strategies of the 8th SEDP (2016-2020) to lead the various agencies to the same direction of EV promotion.

“Introducing and promoting a low-emission transport system, especially electric vehicles (EVs): providing incentives for low-emission vehicle users and related businesses, introducing EVs as public vehicles including government-owned vehicles, developing required infrastructures and human resources, holding promotion campaign for a low-emission transport system.”

2.37 The EST Strategy will be a development guideline for the Department of Transport (DOT), MPWT and DPWT. Promotion of EVs is already raised as one of the development policies in the draft EST Strategy. Thus, it is clear that DOT has committed to this policy. However, the EST strategy does not have concrete targets and actions to promote EVs (e.g., 40% of total vehicles will be EVs by 2020).

2.38 Following are sets of specific strategies to propagate EVs in Lao PDR:

(i) Policy formulation and capacity building for EVs: Develop institutional capacity at the national and local levels to enable stakeholders to participate in EV promotion, such as in formulating EV policy and roadmap. While the EST Strategy can be a part of this, other regulations and standards related to EVs have to be provided by the government as well (e.g., tax incentives, registration, driving license, business license, technical standards, etc.).

(ii) EV infrastructure development: Development of EV infrastructure is always a chicken-and-egg problem. It is difficult for the government to invest in EV infrastructure without a certain volume of EV users. However, people cannot use EVs comfortably and safely without the appropriate EV infrastructure. Therefore, what the government can do is to provide EV infrastructure to encourage people to use EVs. While the government develops the EV infrastructure, EVs will become more affordable for people with improved technologies.

(iii) Information and education campaign (IEC): EVs are still new in Lao PDR, so a strong public relations campaign is very important to share the appropriate information on EVs with stakeholders. At the same time, it is also necessary to develop the human resources to make EVs sustainable.

(iv) Public-private partnership (PPP) in EV development: Since the capacity of the Lao Government is limited, the public sector needs to coordinate with the private sector in promoting EVs. In particular, the private sector can play a significant role in the operation and maintenance of EVs. On the other hand, the public sector can provide EV infrastructure as part of its public infrastructure development program and provide



2-13

low-interest loans to EV public transport businesses.

(v) International aid and cooperation: The government can harness international aid and cooperation to ensure funding for specific low-emission transport action programs and projects, as well as for technology transfer and training.

(vi) EV introduction strategies by region: The government can calibrate the national low-emission transport policy by tailor-fitting the same to the respective contexts of regions and large cities while bearing in mind the need to do so in an integrated manner for the common good.

(vii) Effective model project design and implementation: The government can spearhead the design and implementation of model projects of new business models which can be implemented by a wide range of stakeholders. Some of these model projects should also be locally implementable. It is not sustainable if Lao PDR always expects foreign assistance.

2.39 In the short term, the public sector will take the lead in introducing EVs in Lao PDR. The main role of the government is to create demand for EVs and to develop EV-related policy and regulations on importation, safety, charging systems, recycling, etc. In the medium to long term, the private sector should take over as the leader in promoting EVs based on market mechanisms. Development of the necessary regulations by the government can support the EV businesses of the private sector in the future.

2.40 In general, vehicle buyers choose the vehicles by the sales price, not by the lifecycle cost. Many people are aware that environment-friendly vehicles can reduce the consumption of fossil fuel and emission gases. However, people still choose the vehicles by its price. Some people even choose poor quality vehicles if they are cheap. In order to avoid this situation, the government needs to do the following:

(i) Adjust the EV sales prices through the taxation system with due consideration to economic benefits;

(ii) Control the quality of EVs/PHEVs in the market by requiring EV/PHEV dealers to have quality assurance and after sales services; and

(iii) Provide information on the EV lifecycle cost to the public.

3) Roadmap of EV Introduction

2.41 Proposed in the “Basic Data Collection Study on Low-Emission Public Transport System in Lao PDR” is as follows: EV introduction should have three stages, i.e., preparatory stage (2012-2015), diffusion stage (2016-2020), and full-fledged development stage (2021-2030). The vehicle industries are not active in Lao PDR, so the government should lead the EV introduction in the beginning. However, in the full-fledged development stage, it is expected that the private sector will take lead to further propagate the use of EVs (see Table 2.2.2).

(i) Preparatory stage: Preparation for EV promotion includes establishing EV introduction/promotion organizations, collecting EV-related information, drafting EV-related regulations, developing the government capacities to implement EV projects, and preparing for model projects.

(ii) Diffusion stage: At the diffusion stage, model projects, EV promotion campaign, EV infrastructure development, finalization of EV-related regulations, establishment of


2-14

public-private partnership (PPP) framework, etc. will be conducted.

(iii) Full-fledged development stage: At this stage, EVs will be really propagated with actual EV use by citizens and increase in investment in EV introduction by private enterprises.

Table 2.2.2 Roadmap for EV Introduction

Source: Basic Data Collection Study on Low-Emission Public Transport System in Lao PDR

The Preliminary Works for the Technical Cooperation on Low-Emission Transport SystemFINAL REPORT


2-15

Box 2.2.1 Target Level of EV Use in Lao PDR (JICA Study, 2012)

(a) Methodology

EVs have been gradually increasing in the market and the road transport scene in Lao PDR, though they are limited. Quite a few e-bikes are used in Luang Prabang. E-minibuses have been in operation in Vientiane since 2009. Twenty (20) e-minibuses are also in operation in Kayson Phomvihane since 2012. A battery factory has been built in Savannakhet in 2012 and dealers exist in Vientiane who import different types of EVs.

In the JICA-assisted “Basic Data Collection Study on Low-emission Public Transport System in Lao PDR,” potential roles of EVs and their benefits on socio-economic development and environment in Lao PDR were studied and discussed intensively among stakeholders through a series of workshops. Opinions of potential users of EVs were also heard through interviews and field surveys. They concluded that EVs can contribute not only to the transportation sector but also the sustainable development of the cities and the country.

In the above JICA study, the number of vehicles in the future was estimated based on the existing number of vehicles (see Figure 2.2.1). Based on this and a target number of EV/PHEV, the number of EV/PHEV in the future was also calculated.


Figure 2.2.1 Methodology for Forecasting the Number of EVs/PHEVs

(b) Assumed Share of EVs in Future Vehicle Ownership

EV propagation target is defined in the 2012 JICA study, as follows. Target seems to be very high (about 40% by 2020 and 80% by 2030). However, more than 70% and 60% of the total number of target EVs is accounted for by electric motorcycles (see Table 2.2.3 and Figure 2.2.2).

Basic Data Collection Study No. of vehicles in the future

Average life of vehicles

Statistical Data No. of vehicles in the past

No. of vehicle sales by type in the future

Propagation rate of EV/PHV in the future

Propagation target of EV/PHV

No. of EV/PHEV sales by type in the future


2-16

Table 2.2.3 EV Assumed Policy Targets by Year

Source: Basic Data Collection Study on Low-Emission Public Transport System in Lao PDR 1) Including sedan, pick-up, SUV, jeep, and van. 2) It is assumed that existing tuktuk will be replaced with modern and safe vehicles with similar function by 2030 (minibus). 3) It is assumed that existing songthaew will be replaced with modern and safe vehicles with similar function (medium bus).


Figure 2.2.2 EV Targets by Year

Vehicle Ownership (000) % of EV No. of EVs (000)

2012 2015 2020 2030 2015 2020 2030 2015 2020 2030

Private Use

MC 1,005 1,093 1,395 1,875 10 50 100 109 698 1,875 Car1) 226 270 450 908 0 10 50 0 45 454 Truck 35 35 44 72 - - - - - -

Public Use

Tuktuk/Minibus2) 9 10 12 15 20 100 100 2 12 15 Songthaew/Medium bus3) 36 28 37 67 0 10 50 0 4 34 Large Bus 4 4 5 10 0 10 50 0 0.5 5

Total 1,289 1,440 1,945 2,947 7 40 80 96 760 2,383

0

500

1,000

1,500

2,000

2,500

3,000Electric VehiclesConventional Vehicles

80%

20%

40%

60%

7%

83%

(000 units)



2-17

2.3 Analysis of Ownership and Utilization Costs of EVs

1) Methodology

2.42 In the JICA-assisted "Basic Data Collection Study on Low-Emission Public Transport System in Lao PDR," it was preliminarily concluded that the country would benefit from introducing and promoting EV use. In this section, the opportunities and considerations are further analyzed quantitatively by comparing lifecycle costs of EVs and ICEs by type. Selected vehicles are shown in Table 2.3.1.

Table 2.3.1 Specification of Selected Vehicles

Source: Web-site of automobile companies

2.43 Lifecycle cost is the sum of the purchase price and operating cost for the entire lifespan of vehicles. These costs are composed of the following:

(i) Purchase price covers the vehicle price, dealer margin, and acquisition taxes (i.e., import tax, excise tax, and VAT). The current tax system was applied as acquisition taxes.

(ii) Operating cost covers fuel/electricity cost, parts replacement cost (e.g., battery, tire, lubricant), insurance cost, and annual road user's tax. It was assumed that the lifetime of vehicles is 10 years for bicycle, motorcycle and trikes and 12 years for minibus and car. Characteristics of representative vehicles used for this analysis are summarized in Table 2.3.2.

Engine (cc): 97 Motor (kw (rated): 0.25GVW (kg): 92 GVW (kg): 27.6No. of Seats: 1 No. of Seats: 1Mileage (km/l): 49.4 Mileage (km/kWh): -CO2 (g/km) 46 Battery (kWh) 0.2Engine (cc): 125 Motor (kw (rated): 0.6GVW (kg): 350 GVW (kg): 98No. of Seats: 6 No. of Seats: 1Mileage (km/l): 10.0 Mileage (km/kWh): 33CO2 (g/km) 227 Battery (kWh) 1.2Engine (cc): 500 Motor (kw (rated): 7GVW (kg): 500 GVW (kg): 500No. of Seats: 10 No. of Seats: 6Mileage (km/l): 10.0 Mileage (km/kWh): 11CO2 (g/km) 227 Battery (kWh) 4.7Engine (cc): 2,982 Motor (kw (rated): 5GVW (kg): 2,600 GVW (kg): 1,940No. of Seats: 12 No. of Seats: 12Mileage (km/l): 8.3 Mileage (km/kWh): 5.8CO2 (g/km) 221 Battery (kWh) 13.7Engine (cc): 1,498 Motor (kw (rated): 70GVW (kg): 1,375 GVW (kg): 1,705No. of Seats: 5 No. of Seats: 5Mileage (km/l): 12.6 Mileage (km/kWh): 8.8CO2 (g/km) 104 Battery (kWh) 24

ICETypica Vehicle Model Parameters

HONDA Wave 100

Motorcycle

Model ParametersPanasonic Bibibuddy

Bicycle

Typica VehicleEV

Terra Motors SEED 48

E-trike

Nissan Leaf

VSCBE

Minibus

Three-wheel

Motorcycle

Three-wheel

Minibus

CarCar

Toyota HiAce

Jumbo

Tuktuk

Toyota Carolla

Toyota HiAce


2-18

Table 2.3.2 Characteristics of Sample ICE Vehicles and EVs for Analysis

Aspect E-bicycle Motorcycle Tricycle Min Bus Car

ICE EV ICE EV ICE EV ICE EV

Fuel efficiency (km/l) - 30.0 - 10.0 - 8.0 - 10.0 -

Electric efficiency (km/kWh) - - 13.0 - 9.5 - 6.0 - 6.5

Lubricant (l/000 km) - 0.7 - 1.3 - 5.0 - 1.3 -

Tire (set/0000 km) - 0.01 0.01 0.02 0.02 0.03 0.03 0.02 0.02

Battery (USD/unit) 462 20 506 50 1,890 75 2,336 75 22,629

Insurance (USD/year) - 10.0 10.0 24.1 24.1 43.8 43.8 25.4 25.4

Driving distance (km/year) - 5,840 5,840 16,425 16,425 18,250 18,250 9,125 9,125

Passenger capacity 1 1 1 5 3-5 10-12 10-12 5 5

Source: JICA Study Team complied several information sources

2) Results of Analysis

(a) E-bicycles

2.44 E-bicycles are the smallest type of electric vehicle and are easy to introduce because driving licenses and vehicle registration are usually not required to drive them. E-bicycles are considered an alternative to conventional bicycles and motorcycles, especially for shopping and commuting in urban areas. They can also be introduced as a new transport mode for people who do not own one.

2.45 The advantages of e-bicycles are as follows:

(i) Easy to obtain and use: E-bicycles are categorized as bicycles, so users are not required to get a license and vehicle registration. The battery of e-bicycles needs to be charged, but it can be charged without special charging facilities. In addition, users can still travel using the pedals when the battery becomes empty. Users do not have to worry about keeping batteries always charged;

(ii) Low vehicle operating cost: Comparing to a conventional bicycle, purchase cost and operating cost of e-bicycle is more expensive. However, the vehicle operating cost, i.e. purchase, possession and operation costs of e-bicycle is about half that of motorcycle (see Table 2.3.3).

(iii) Safe: The speed of e-bicycles is limited (~20 km/h), making it safer than conventional motorcycles, especially considering the many accidents caused by student motorcycle drivers.

(iv) Good for health: E-bicycles have pedals, so users can also use them as bicycle.

2.46 The main target users of e-bicycles include students and women who do not or cannot have a driving license for motorcycles to improve their mobility and access to services. Promoting e-bicycles among students can also contribute in reducing traffic accidents and the number of illegal motorcycle drivers. Many students drive motorcycles without driving licenses and a knowledge of traffic rules and driving manner, thereby causing traffic accidents as a result of speeding or reckless driving. People cannot drive e-bicycles too fast, and they can be promoted together with traffic safety education in schools.

2.47 In order to promote e-bicycles with good quality, dealers should assure the quality of their goods and develop a maintenance service system as an after-sales service. Unlike Vietnam, bicycles are not so common in Lao PDR. Therefore, conducting pilot



2-19

projects is also important as a promotion campaign. It is advisable to conduct a pilot project in smaller cities where traveling on bicycles would be easier.

Table 2.3.3 Vehicle Operating Costs of Motorcycles and E-bicycles (USD)

Cost Motorcycle

(Wave 100)

E-bicycle

(PAS CITY-S5)

Difference: (E-BC) –(MC)

Purchase

Cost 1,234 1,102 -131

Tax 307 226 -81

Sub-total 1,541 1,328 -213

Operation

Cost 1,992 558 -1,434

Tax 459 76 -383

Sub-total 2,451 634 -1,817

Total

Cost 3,226 1,660 -1,566

Tax 766 302 -464

Sub-total 3,992 1,962 -2,030

Source: JICA Study Team Note: the assumptions of calculation are as follows; (1) Motorcycle: Tax rate: import tax = 40%, excise tax = 20%, VAT = 10%; fuel cost = USD1.3 /l; annual maintenance cost

= 3% of CIF price; annual road user charge = USD0.9. (2) E-bicycle: Tax rate: import tax = 10%, VAT = 10%; electric tariff = USD0.1 /kWh; annual maintenance cost = 3% of CIF

price.

(b) E-motorcycles

2.48 Motorcycles have the highest share in the total number of vehicles in Lao PDR, and are the main contributors of CO and THC. One of the benefits in shifting from conventional motorcycles to e-motorcycles is the reduction in air pollutants. In addition, the vehicle operating cost of e-motorcycles is about 20% less than that of conventional motorcycles (see Table 2.3.4). It is clear that users and the society can benefit from e-motorcycle use.

2.49 However, people do not trust e-motorcycles due to bad past experiences in e-motorcycle use in Lao PDR. Although the purchase price of e-motorcycles is almost the same as that of conventional motorcycles, many people still choose conventional motorcycles. Moreover, the replacement cost of batteries is also one of the constraints to choosing e-motorcycles.

2.50 In addition, driving licenses and vehicle registration papers are not required for e-motorcycle drivers. These factors can both be advantageous and disadvantageous to e-motorcycles. However, it is dangerous from the viewpoint of traffic safety, because e-motorcycles can be driven at more than 40 km/h. Since e-motorcycles do not require vehicle registration, users cannot get insurance.

2.51 In this situation, it is necessary to ease the worry of users when promoting e-motorcycles. For example, the government can establish a quality guarantee system. If users are not satisfied with their purchase after three months, they can return their e-motorcycles and get a full refund if the products are still in mint condition. As a battery guarantee, users can change to new batteries after a certain period (e.g., one year), so that users need not worry about the life of their batteries. At the same time, e-motorcycles should be categorized as motorcycles so that driving licenses and vehicle registration would be required.


2-20

Table 2.3.4 Vehicle Operating Costs of Motorcycles and E-motorcycles (USD)

Cost Motorcycle

(Wave 100)

E-motorcycle

(SEED 60)

Difference: (E-

MC) - (MC)

Purchase

Price 1,234 1,584 350

Tax 307 299 -8

Sub-total 1,541 1,883 342

Operation

Cost 1,992 1,160 -832

Tax 459 196 -263

Sub-total 2,451 1,356 -1,095

Total

Cost 3,226 2,744 -482

Tax 766 495 -271

Sub-total 3,992 3,239 -752

Source: JICA Study Team Note: the assumptions of calculation are as follows; (1) Motorcycle: Tax rate: import tax = 40%, excise tax = 20%, VAT = 10%; fuel cost = USD1.3 /l; annual maintenance cost =

3% of CIF price; annual road user charge = USD0.9. (2) E-motorcycle: Tax rate: import tax = 30%, excise tax = 16%, VAT = 10%; electric tariff = USD0.1 /kWh; annual

maintenance cost = 3% of CIF price; annual road user charge = USD0.9.

2.52 Moreover, the tax system for e-motorcycles and batteries should be revised to promote e-motorcycles. In October 2012, the excise tax on e-motorcycles was set at 20% less than that of conventional motorcycles. However, this is not enough incentive to e-motorcycle users. Since vehicle operating costs of e-motorcycles are lower than those of conventional motorcycles, tax incentives for e-motorcycles will be revised after e-motorcycles become more popular. However, a tax reduction or exemption to trigger more e-motorcycles is important at this point. Tax incentives for EV batteries should also be considered until battery costs become much lower than they are now.

2.53 Pilot projects should target public officials, students, and tourists. Since EV promotion is a national policy, government officials should be the model for others. They can dispatch information on e-motorcycles and reflect their opinion on promotion measures. Because e-motorcycles cannot be driven as fast as conventional motorcycles, these can be used by students. So, it is important to promote e-motorcycles among students to increase traffic safety. Promoting e-motorcycle to tourists can also improve the image of Lao PDR. Because tourists usually travel at shorter distances than residents, and do not drive along dirty roads, they can use e-motorcycles for more comfortable sightseeing.

(c) E-trikes

2.54 E-trikes have been operated in the Philippines and Thailand as an alternative mode to tricycles and tuktuk, respectively. In some European countries, e-trikes have become part of their tourism attractions. The Philippines and Thailand are promoting e-trikes to improve environment and incomes of drivers. Whereas conventional tricycles and tuktuk emit a lot of air pollutants and generate noise, e-trikes are very clean and quiet. Furthermore, the operational cost of e-trikes is lower than that of tricycles and tuktuk because fossil fuel is expensive. Considering that Lao PDR has the same problems as those countries, it can benefit from promoting e-trike use.

2.55 Most of the cities in Lao PDR do not have public buses or railway services. Tuktuk



2-21

and jumbo2 are still important transportation modes for people and should be improved for the sake of both passengers and operators. In some cities and some routes, it is advisable to shift from tuktuk/jumbo to e-minibuses. However, compared to e-trikes, e-minibuses are more expensive and cannot fit in the country's narrow roads. Therefore, e-trikes are more convenient and comfortable when traveling in small communities.

2.56 The vehicle operating cost of e-trikse is about 70% less than that of a conventional jumbo (see Table 2.3.5). Thus, jumbo drivers can save more from e-trike operation. At the same time, passengers do not need to suffer from black smoke and noise.

2.57 However, the purchase price of e-trikes is about eight times that of ICE jumbo, which would turn people off buying e-trike (see Table 2.3.5). Another concern of operators is maintenance system of e-trike. In order to operate e-trike with low operating cost every day, maintenance service should be available anywhere and anytime.

Table 2.3.5 Vehicle Operating Costs of Jumbo and E-trikes (USD)

Cost Jumbo

(Existing Jumbo)

Tuktuk

(Existing Tuktuk)

E-trike

(Terra Motors)

Difference:

(E-trike) - (Jumbo)

Difference:

(E-trike) - (Tuktuk)

Purchase

Price 689 1,156 5,500 4,811 4,344

Tax 272 456 2,170 1,898 1,714

Sub-total 960 1,612 7,670 6,710 6,058

Operation

Cost 13,485 13,485 3,903 -9,582 -9,582

Tax 3,693 3,693 817 -2,877 -2,877

Sub-total 17,179 17,179 4,719 -12,459 -12,459

Total

Cost 14,174 14,641 9,403 -4,771 -5,239

Tax 3,965 4,150 2,987 -978 -1,163

Sub-total 18,139 18,791 12,389 -5,750 -6,401

Source: JICA Study Team Note: the assumptions of calculation are as follows;

(1) Jumbo: Tax rate: import tax = 40%, excise tax = 20%, VAT = 10%; fuel cost = USD1.3 /l; annual maintenance cost = 3% of CIF price; annual road user charge = USD1.5.

(2) E-trike: Tax rate: import tax = 40%, excise tax = 20%, VAT = 10%; electric tariff = USD0.1 /kWh; annual maintenance cost = 3% of CIF price; annual road user charge = USD1.5.

2.58 In order to promote e-trikes in Lao PDR, acquisition costs should be lowered by introducing interest-free loans to e-trike operators. For example, the difference between the repayment of an 8% interest loan and interest-free loan for five years shall be subsidized by government. The total amount of subsidy at present value is about USD1,650, which is less than the amount of acquisition tax imposed on e-trikes. Thus, if the government can exempt all acquisition tax from e-trikes, the operator can purchase e-trikes with low-interest loan (see Table 2.3.6).

2.59 In addition to the tax exemption to be given to e-trike operators, tax reductions and exemptions on batteries and spare parts should be considered. Development of an after-sales service and application of compulsory insurance should be applied to e-trikes and other EVs.

2 While jumbo is defined as modified motorcycles with about six passenger capacity, tuktuk is three-wheel vehicle with about 10 passenger capacity.


2-22

Table 2.3.6 Comparison of 8% Interest Loan and Interest-free Loan

Loan Amount =

USD7,670

With 8% Interest

(USD): (1)

Without Interest

(USD): (2)

Subsidy for Interest (USD): (1) – (2)

Future Value Present Value

1st year 1,921 1,534 387 387

2nd year 1,921 1,534 387 356

3rd year 1,921 1,534 387 328

4th year 1,921 1,534 387 301

5th year 1,921 1,534 387 277

Total 9,605 7,670 1,935 1,649


(d) LSEVs/E-minibuses

2.60 In general, LSEV refers to a low-cost vehicle used to transport either passengers or cargo. The company Shi Feng is a pioneer in Shengdong province, China. It costs about USD5,000 per unit for a small LSEV. In China, it is proposed that LSEVs be allowed to operate on Class II city roads or below as well as in the countryside. It cannot be used on highways or high-speed motorways with minimum speed requirements. In the U.S., most states prohibit NEV to operate on roads with speed limits of above 40 miles/hour (~70 km/h). It generally requires a maximum cruising speed of under 25 miles (about 40 km) to avoid the full requirement of a road impact test.

2.61 There have been many successful LSEV/NEV applications around the globe. In Lao PDR, it is being used by the local authority for commercial purposes, i.e., for shuttle services between regular bus stops to individual houses inside villages or shuttle services within college campus, within tourist sites, entertainment venues, airport terminals, etc. It is certainly also common for NEVs/LSEVs to be used for private purposes.

2.62 There are many different ways to design an LSEV/NEV. The least expensive one is a golf cart type configuration without soft suspension or proper ball joint steering. The better equipped one is just as good as a regular ICE vehicle except for its motor. It includes power steering, air cushion, and individual suspension shock absorbents. Certainly, different designs translate into much difference in cost, road worthiness, and ride comfort.

2.63 In most cases, the open style LSEV minibus with a 15-person capacity will weigh about 1.5 tons without passengers, have an average expected speed of about 50 km/h, and have a driving range of about 50 km on a full charge. The driving range will be much reduced if the LSEV is to carry heavy cargo, a full load of passengers, would have to go through repeated stops, or through traffic.

2.64 For Lao PDR, it is probably better to start at the public sector application to bring about public awareness of EVs and to establish positive EV image before an effective private use could be propagated. A public sector application would cover public minibus service, traffic police patrol cars, mail delivery trucks, city official patrol cars, and others.

2.65 The infrastructure investment for this kind of LSEV application is minimum. It should cost no more than USD300 each. The charger could easily be mounted in the car. It could be charged from a regular 220 AC electric outlet without much special installation investment. The charging facility could either be provided within government offices,



2-23

schools, hospitals, bus terminals, or even at home.

2.66 The common sense EV rule should apply in LSEVs/NEVs, i.e., the lighter the EV, the better the design is. Therefore, an open type LSEV/NEV is a better choice than a closed type. Considering the weather of Lao PDR, it makes sense to choose the open type LSEV or NEV. Technology is already available to use a mist system to provide similar cooling effect as air conditioning. Air conditioning consumes about 30% of electricity. So, taking out the heavy air conditioning is a good choice.

2.67 Many users prefer to choose maintenance-free batteries. Wet cell maintainable battery (3D series) is actually a better choice than the seal maintenance free (no maintainable) type. It will provide much stronger power and last longer.

2.68 Considering the current public transport services in Lao PDR, the target modes to shift to e-minibus are shared taxi (8-10 pax), songthaew (6-12 pax), and tuktuk (9 pax). However, shared taxi (Hi-Ace type) and songthaew operate relatively long distances per trip; hence it is necessary to introduce e-minibuses able to travel long distances and install charging stations along bus routes.

2.69 The VOC is one of the main concerns of public transport operators. Comparing the VOC of shared taxi and e-minibuses, the purchase price and operating cost of e-minibuses is much higher than those of tuktuk. Therefore, tuktuk operators cannot benefit from using e-minibuses unless the operating system is changed (e.g., operating along fixed routes, increasing fares instead of providing better services, etc.). On the other hand, the VOC of a e-minibus is about 30% lower than that of a shared taxi. However, the existing shared taxi has an advantage of an unlimited driving range. So, if the operator shifts to an e-minibus, he cannot operate spontaneously (see Table 2.3.7).

2.70 Besides VOCs, introducing e-minibuses will bring other benefits like saving fossil fuel, improving environmental condition, and others. Moreover, this will be a trigger to develop good public transport system in each city. Many cities do not have a public transport network, so that e-minibuses can be introduced from zero-base network.

2.71 The promotion measures for e-minibuses are similar to those for e-tuktuk, i.e., introducing interest-free loans, tax reduction/exemption on batteries and spare parts, marketing authorization system, and developing after sales service. In addition to this, since e-minibuses need to run longer distance, the charging infrastructure should be developed along routes and terminals.


2-24

Table 2.3.7 Vehicle Operating Costs of Tuktuk, Shared taxi and E-minibus (USD)

Cost Tuktuk

(Existing)

Shared Taxi

(Hi-Ace)

E-minibus

(Yunnan Taixing)

Difference:

(E-minibus) - (Tuktuk)

Difference:

(E-minibus) - (Shared Taxi)

Purchase

Price 1,156 21,184 11,785 10,629 -9,399

Tax 457 6,920 3,450 2,994 -3,470

Sub-total 1,613 28,104 15,235 13,623 -12,869

Operation

Cost 15,150 25,697 21,167 6,017 -4,530

Tax 4,149 3,760 3,413 -736 -347

Sub-total 19,299 29,457 24,580 5,281 -4,877

Total

Cost 16,306 46,881 32,953 16,646 -13,929

Tax 4,606 10,680 6,863 2,257 -3,817

Sub-total 20,912 57,561 39,815 18,903 -17,746

Source: JICA Study Team Note: the assumptions of calculation are as follows; (1) Tuktuk: Tax rate: import tax = 40%, excise tax = 20%, VAT = 10%; fuel cost = USD1.3 /l; annual maintenance cost = 3% of CIF price; annual road user

charge = USD1.5 (2) Share Taxi: Tax rate: import tax = 20%, excise tax = 25%, VAT = 10%; fuel cost = USD1.1 /l; annual maintenance cost = 3% of CIF price; annual road

user charge = USD7.5. (3) E-minibus: Tax rate: import tax = 20%, excise tax = 25%, VAT = 10%; electric tariff = USD0.1 /kWh; annual maintenance cost = 3% of CIF price; annual

road user charge = USD7.5.

(e) E-cars

2.72 Because of developments in EV battery technology, several kinds of e-cars have become available in the market (e.g., Nissan Leaf, Mitsubishi i-MiEV, Tesra Roadstar, etc.). In many countries, e-cars are generally promoted to reduce fossil fuel use and CO2 emission from vehicles. Lao PDR cannot be an exception, especially from the viewpoint of saving fossil fuel. Lao PDR is still at the early stage of motorization, so emissions from vehicles are still low. However, Lao PDR completely relies on imported fuel. Shifting to EVs has a significant impact to fuel saving and foreign currency saving. Most e-cars are sedan type, but it is possible to convert pick-ups or vans to e-cars.

2.73 Although e-cars can bring several benefits to the country, promote it in Lao PDR is not easy due to its cost. The electric cost of an e-car is half fuel cost of an ICE sedan, but its purchase price is about 2.0 times more than that of an ICE sedan (see Table 2.3.8). There are also cheaper cars from Korea and China, so the difference between those cars and e-cars would be more than twice. The main factor that makes e-cars expensive is battery cost. The operating cost of e-cars is also more expensive than that of an ICE sedan due to the need for battery replacement after six years of use. Thus, the cheap electricity cost for e-cars is wiped out by the high cost of battery replacement. It is expected that battery technology would further develop in the near future to decrease acquisition and operating costs of e-cars.



2-25

Table 2.3.8 Vehicle Operating Costs of ICE-sedans and E-cars (Case 1: Base Case)

ICE Sedan

(Yaris)

E-car

(Leaf)

Difference:

(E-car) - (ICE-sedan)

Purchase

Cost 16,446 31,611 15,165

Tax 10,985 21,544 10,559

Sub-total 27,431 53,155 25,723

Operation

Cost 12,281 15,485 3,204

Tax 2,416 2,662 245

Sub-total 14,697 18,147 3,450

Total

Cost 28,727 47,096 18,369

Tax 13,401 24,206 10,804

Sub-total 42,128 71,302 29,173

Source: JICA Study Team Note: the assumptions of calculation are as follows; (1) ICE Sedan: Tax rate: import tax = 40%, excise tax = 65%, VAT = 10%; fuel cost = USD1.3 /l; annual maintenance cost

= 3% of CIF price; annual road user charge = USD6.6. (2) E-car: Tax rate: import tax = 40%, excise tax = 65%, VAT = 10%; electric tariff = USD0.1 /kWh; annual maintenance

cost = 3% of CIF price; annual road user charge = USD2.5

2.74 Assuming that the battery cost would be half (current cost is about USD714 /kWh) and battery replacement is no longer required, the purchase price of e-cars would still be 36% higher than that of ICE sedans (see Table 2.3.9). On the other hand, the operating cost of e-cars would be about 68% lower than that of ICE sedans. It is expected that the battery can still be used even after the battery has slightly deteriorated. Manufacturers' warranty for the battery is 100,000 km driving range in five years, but the average driving distance in Vientiane is only about 10,000 km/year (less than 30 km/day). In addition, the development of battery technology may eliminate the need to replace batteries after certain period of use.

2.75 As a result, the total VOC of e-cars is slightly lower than that of ICE sedans. In order to promote e-cars under the present conditions, some government policy is necessary, e.g. tax exemption for e-cars, tax increases on ICE sedan, etc.

Table 2.3.9 Vehicle Operating Costs of ICE Sedan and E-cars (Case2: battery cost =1/2)

Cost ICE-sedan E-car Difference:

(E-car) - (ICE-sedan)

Purchase

Price 16,446 22,182 5,736

Tax 10,985 15,118 4,133

Sub-total 27,431 37,300 9,869

Operation

Cost 12,281 4,436 -7,845

Tax 2,416 270 -2,146

Sub-total 14,697 4,706 -9,991

Total

Cost 28,727 26,618 -2,109

Tax 13,401 15,388 1,986

Sub-total 42,128 42,006 -123

Source: JICA Study Team Note: the assumptions of calculation are as follows; (1) ICE Sedan: Tax rate: import tax = 40%, excise tax = 65%, VAT = 10%; fuel cost = USD1.3 /l; annual maintenance cost = 3%

of CIF price; annual road user charge = USD6.6. (2) E-car: Tax rate: import tax = 40%, excise tax = 65%, VAT = 10%; electric tariff = USD0.1 /kWh; annual maintenance cost =

3% of CIF price; annual road user charge = USD2.5


2-26

2.76 When more e-cars are introduced and used as private vehicles, big subsidies or tax reductions will become a burden to the national finance. Therefore, the promotion policy on e-cars should be revised periodically. Possible policies are: (i) tax exemptions on batteries, (ii) tax reductions/exemptions for e-cars, and (iii) subsidy for e-car purchase with an upper limit. Since Lao PDR aims to become a battery hub in Southeast Asia, Lao PDR should realize a smart community by utilizing Li-ion batteries.

2.77 In addition to supporting e-car purchases, charging infrastructure needs to be developed, especially after 2020 when battery costs are expected to reduce to half. For example, if Vientiane would be designed as a model city, this requires all government official and international organizations to use e-cars. Together with this, charging stations at government and international organization buildings and other main destinations will be provided.

3) Summary

2.78 Based on the preceding analysis, it is clear that small types of EVs are more competitive in the market due to lower purchase costs, and that larger EVs can be promoted as technology develops, especially in battery performance. In order to attract more users, it is necessary to introduce preferential taxes and other incentives to EV buyers.

2.79 E-assisted bicycle and e-motorcycle have strong competitiveness against conventional motorcycles at present. Promotion campaign will be a key for encouraging people to use e-assisted bicycle and e-motorcycles. E-trike also has lower lifecycle cost than that of existing jumbo and tuktuk, but the purchase cost of e-trikes is still expensive for operators. Tax exemption and low-interest loan for e-trike purchase should be provided. E-minibus and e-car still have higher lifecycle cost than that of ICE vehicles. Therefore, the priority of EV promotion in Lao PDR should target e-assisted bicycles, e-motorcycles and e-trikes for a while.



2-27

2.4 A Direction for Promoting EVs in Lao PDR

1) Introduction of EVs by Vehicle Type and Battery

2.80 Considering the situation of Lao PDR and the available EVs in the market, smaller EVs should be promoted using government funding and support at the early stage of EV promotion. After that, the lead agency in EV promotion will shift to the private sector, and larger sized EVs will also be promoted. At the early stage, public support should concentrate on certain groups of people, which should provide to wider stakeholders. Therefore, the target vehicles at the early stage should be public vehicles such as public transport vehicles, government vehicles, etc. (see Table 2.4.1 and Figure 2.4.1).

2.81 There are two types of EV batteries, namely lithium-ion battery and lead acid battery (see Box 2.4.1). Considering the current conditions of Lao PDR, both types of batteries will be promoted depending on the vehicle types. Due to its affordability and availability in Lao PDR, small type of EVs (i.e., motorcycle, tricycle, LSEV) with lead acid batteries has the first priority to promote, followed by those small types of EVs with Li-ion batteries. Other types of EVs with Li-ion batteries may be promoted after 2016 when the cost of Li-ion batteries becomes half the current cost.

2.82 The EV promotion policy by vehicle type is summarized in Table 2.4.3.

Table 2.4.1 Target EVs for Promotion by Vehicle and Battery Types

Type of Vehicle Lead Battery Li-ion Battery

Cost1) Public Need Cost1) Public Need Motorcycle (public) same High 2 times High Motorcycle (private) same Low 2 times Low Jumbo 3 times Medium 3 times Medium Tuktuk 3 times Medium 5 times Medium LSEV (less than 10 pax) 3 times High － High Minibus (more than 10pax) － High － High Car (public) － High 2-3 times High Car (private) － Low 2-3 times Low

Source: JICA Study Team 1) comparison with ICE vehicles


Figure 2.4.1 Concept of Promoting Target Vehicles by Stage

Short-term (2014 -2015) Medium-term (2016 -2020) Long-term (2021 -)

Vehicle SizeSmall Large

Publ

icne

ss

High: Public vehicle

Low: Private vehicle

EV/PHEV for government vehicles (Li-ion)

Electric Jumbo (Li-ion)

E-trike (lead)

Private e-motorcycle (lead)

Private EV/PHEV (Li-ion)

Other EV public transport service (Li-ion)

Private e-motorcycle (Li-ion)


2-28

Box 2.4.1 Comparison of Battery Types

There are mainly two types of batteries used for EVs; one is lead-acid battery, and the other is lithium-ion battery. The price and performance of EVs depend on the types of battery used (see Table 2.4.2). Many developed countries tend to choose Li-ion batteries which have better performance, but increase the prices of EVs. Therefore, it is not realistic to focus on EVs only with Li-ion batteries in Lao PDR. Since cities in Lao PDR are small, an extensive driving range per charge is not required like in big cities in developed countries. Therefore, EVs with lead-acid battery are suitable for Lao PDR. Moreover, Li-ion battery requires more high-technology operation and management system, which may be a challenge for Lao PDR at the moment.

Table 2.4.2 Comparison of Lead-acid and Li-ion Batteries Type of Battery Performance Feature Issue

Lead-acid Energy density: ~35 Wh/kg

Energy efficiency:87%

Lifespan (cycle): 4,500

Cost (USD/kWh): 500

Relatively cheap

Used in many cases

Usable in a wide range of

temperatures

Strongly tends to overcharge

Possible to discharge under

high current density

Availability of recycle system

Charging capacity decreases

due to deteriorated electrodes

under low state of charge

(SOC)

No management method of

state of charge with small error

Low energy efficiency of

charge and discharge

Li-ion Energy density: ~120 Wh/kg

Energy efficiency:95%

Lifespan (cycle): 3,500

Cost (USD/kWh): 2,000

High energy density

High energy efficiency of

charge and discharge

Has long lifespan

Possible to charge and

discharge rapidly

Easy to monitor the SOC

Difficult to deteriorate under

low SOC

Need measures to assure

safety

Weak against overcharging

and overdischarging

Need to manage voltage of

each battery cell

Accelerate deterioration of

battery by storing under high

SOC and high temperatures

Need to reduce costs

Source: Agency for Natural Resources and Energy



2-29

Table 2.4.3 EV/PHEV Promotion Policy by Vehicle Type

Vehicle Type Strength/Opportunity Weakness/Challenge Impact Required Action

Electric

assisted

bicycles (e-

bicycle)

Cheaper than ICE

motorcycles

More comfortable than

conventional bicycles

No requirement of

registration and driving

license

Usable by students,

disabled, housewives, etc.

Usable by tourists

Bicycles are not so popular

in Lao PDR, especially in

Vientiane.

Road space for safe use of

bicycles is limited.

Most local roads are still

earth road.

To reduce the number of

motorcycles (ICE)

To help persons with

disabilities/elderly/women

improve their mobility

To reduce students’ illegal

use of motorbikes

Conduct promotion

campaign, especially at the

school

Improve road conditions

Develop bicycle lanes

Electric

motorcycle (e-

motorcycle)

Lower operating cost than

ICE motorcycle

Competitive prices of e-

motorcycles

No need for registration

and driving license

Gradual decrease in prices

Expand supply of improved

e-bikes from China, Japan,

etc.

Introduce to rural/remote

areas far from gas stations

Poor reliability

Possibility to increase

snatch using e-motorcycle

due to its engine silence

No technician for e-

motorcycle maintenance

Bad reputation of Chinese

e-motorcycles

To contribute to

improvement of air quality,

reduction in noise and

energy saving

To lessen tiredness with

driving motorbikes due to

less vibration

To lessen operation cost of

motorbike

Establish adequate rules

and regulations

Establish maintenance

system

Conduct promotion

campaign

E-trike/

E-minibus

(Lead acid

battery)

Positive assessment of

existing e-minibuses by

users

Lower operating cost than

ICE tuktuk/minibus

Introduce in tourist sites to

improve image of Lao PDR

Expand public bus services

Higher acquisition cost

than ICE one

Poor battery management

system

No supporting

infrastructure

Lack of appropriate

management body for

public transport system

Availability of market for e-

minibuses

To encourage use of public

transport

To contribute to



energy saving

To contribute to increase in

drivers’ income due to less

operation cost

Prepare e-minibus

business plan

Establish a operation and

management body for e-

trike/e-minibus service

Provide necessary support

by the government in terms

of finance and technical


and regulations

E-car

(Li-ion

battery)

Users have positive

assessment of EVs

Short driving distance on

average

Lower operating cost

except for battery

replacement

Possible to lower battery

cost

Poor battery management

High initial cost

No supporting

infrastructure

Availability of market for

EVs

To contribute to the


reduction in noise, and

energy saving


and regulations

Develop charging

infrastructures


system

Large bus Current bus expansion

program can be integrated

with e-bus

Availability of tested

technology and operation

system

High initial cost

No supporting

infrastructure

To encourage use of public

transport

To contribute to



energy saving


and regulations

Develop charging

infrastructures


system



2-30

2) EV Introduction Strategies by Region

2.83 It is the government’s long-term vision to introduce EVs all over the country. In order to promote EVs in different places with different characteristics, the country can be broadly classified into: (i) urban areas, (ii) rural/mountainous areas, (iii) tourist sites/special-use areas, and (iv) main transport corridors (see Figure 2.4.2).


Figure 2.4.2 Classified Spatial Structure for EV Introduction

2.84 EV introduction and promotion strategies for each area have to comply with the national policy and strategies for EV promotion. The proposed basic strategies for each area are described below and in subsequent pages. However, basic strategies should be further elaborated by the Lao government. However, there are certain requirements to introduce and promote EVs, including infrastructures, budget, human resources, etc. So, urban and tourism areas will be more prioritized for EV promotion.

(a) Urban Areas

2.85 Urban areas include the country’s capital, Vientiane; Luang Prabang City; Kayson Phomvihane City; Pakse City; and other medium-size and small cities. While those areas have better socio-economic conditions than other areas, urban areas suffer from urban issues such as the following:

(i) Traffic congestion: Increase in the number of cars has used up more road space, especially in peak hours along major roads. The preference for pick-ups and vans has further used road space inefficiently.

(ii) Lack of road network and poor road conditions: Road traffic is concentrated on certain roads and paved roads are limited, which lessen public mobility and their access to goods and services.

(iii) Lack of parking facilities: Many people park their vehicles on roadsides and

Vientiane

KaysonePhomvihane

Pakse

Luang Prabang

Urban areasTransport corridorsRural areasTourist sites

Transport corridors



2-31

sidewalks illegally.

(iv) Increase in traffic accidents: This situation encourages people to use private vehicles. Public transport modes are limited. Fares of paratransits are not reasonable compared to bus fares.

(v) Use of old and/or ill-maintenance vehicles: Vehicles in poor condition have contributed to traffic pollution. Vehicle inspection system is not effective.

(vi) Increase in traffic accidents: Many traffic accidents are due to poor driving skills and manners, as well as a lack of traffic enforcement. There are also many drivers without licenses, especially among student drivers.

(vii) Lack of considerations for pedestrians and non-motorized transport: The space for pedestrians and NMT are not developed properly. Sidewalks are occupied by parked cars.

2.86 Not all the above issues can be solved merely by introducing and promoting the use of EVs, but such can contribute to solving or mitigating these issues directly and indirectly. Urban areas are the spaces with the best fit for introducing EVs because they have basic infrastructures such as paved roads and power supply. The goal of EV promotion in urban areas is to realize a traffic pollution-free city with modern transport systems. In order to achieve this goal, the objectives of EV promotion strategies are as follows:

(i) To expand and improve public transport including conventional paratransit with government initiatives;

(ii) To facilitate a shift from ICE private vehicles to EVs through incentives and regulations; and,

(iii) To integrate EV development measures with the overall urban transport system and for stakeholders to have an understanding and proper use of EVs.

2.87 It is a challenge for cities in Lao PDR to achieve these objectives because of poor public transport services, less public transport users, lack of awareness of EVs, etc. To achieve the above objectives, the proposed strategies are as follows;

(i) Plan the public transport network in a hierarchical manner, and identify possible modes and routes to introduce electric public transport services: As a basic concept, public bus is a primary line, songthaew/shared taxi is a secondary line, and tuktuk/jumbo is a feeder system for primary and secondary lines. Considering the available EVs in the market, jumbo can be replaced to e-trike, tuktuk can be replaced to e-microbus, and shared taxi can be served by e-minibus;

(ii) Establish an e-public transport association and clarify the possible scheme to introduce e-public transport modes: In order to promote e-public transport system, there are several issues to consider including no/low interest loan schemes, EV lease scheme, provision of subsidy/tax incentives, etc. Promoting e-public transport through e-public transport association can introduce and promote e-public transport more systematic. This association should be established under DPWT of provinces;

(iii) Identify and develop the required infrastructure to reinvigorate public transport services: In accordance with public transport plan, the basic public transport infrastructure and charging facilities for e-public transport system needs to be


2-32

developed;

(iv) Establish required regulations to encourage the public to buy and use EVs: In order to introduce and promote EVs, the environment to use EVs as same as conventional vehicles should be developed. EV users should not face any difficulty during purchase, registration, tax payment, insurance application, etc.;

(v) Establish EV promotion incentives to promote EV use: As seen in Chapter 2.3, some EVs have high competitiveness against conventional vehicles, but others do not have. In addition, while small types of EVs have lower acquisition cost and operation cost, most of people are not familiar with EVs. Therefore, providing incentives will be a trigger for EV promotion;

(vi) Conduct EV promotion campaign: The promotion campaign is essential to promote new system anywhere. There are many ways to conduct campaigns like media, school, event, exhibition, seminar, etc.;

(vii) Develop incentives for EV manufacturers and dealers, and invite them to Lao PDR: The support from private investors is necessary to promote EV in Lao PDR due to the limited capacity of the Lao government. However, the market of Lao PDR is still small for those private investors. The incentives should be provided to attract those investors related to EVs such as a reduction of corporation tax, free VISA for certain years, etc.;

(viii) Develop EV parking spaces with EV charging infrastructures: Providing EV priority parking space is one of the incentives for EV users. At the same time, EV charging stations should be developed as well as gas stations were developed for vehicle users. Charging stations can be developed at public parking spaces, public facilities, commercial facilities, etc.;

(ix) Inspect the situation of the electric supply network including installed power outlet: In order to use EV safe, charging facilities should be installed properly. In Lao PDR, some of power outlets were installed by non-professional people. This can be a cause of fire from EVs. The electric supply network and power outlets should be investigated by professional; and,

(x) Strengthen the traffic enforcement especially illegal drivers of motorcycles: There are too many illegal motorcycle drivers. Some are too young to get a driver's license. Others may know there is no strict traffic enforcement. The former people can shift to e-assisted bicycle or e-moped which driver's license is not required.

(b) Tourist Areas

2.88 Typical tourist areas are Vientiane, Luang Prabang, Vang Vieng, Plain of Jars, Vat Phou, Si Phan Don, and ethnic villages. It is not practical to travel from any of these areas to another using EVs. However, some areas like Vientiane and Luang Prabang have many tourist spots. Therefore, tourists need transport means (i.e., public transport service, vehicle rentals, etc.). However, there are several issues on tourism transport, as follows;

(i) Insufficient public transport services: Large cities have several public transport services, but fares are very high, e.g., a 5-km ride from the city center to the airport costs LAK70,000/ride (USD8.70) on a tuktuk. Some drivers also have bad driving manners;



2-33

(ii) Deterioration of city environment due to poor vehicle condition: Traffic pollution caused by both private and public vehicles generate a bad image for tourist areas; and,

(iii) No environment-friendly tourist vehicles: There are many opportunities for tourists to join eco-tourism (e.g., visits to national parks, ethnic villages, etc.), but travel modes to access these sites generate pollution, noise, etc. except for bicycle tours.

2.89 Tourist areas are not only for tourists; EV introduction strategies for tourist sites should aim for a balance between tourism development and improvement of living conditions for residents. The goal of EV introduction strategies for tourist sites is to realize genuine eco-tourism. In order to achieve this goal, the specific objectives are as follows:

(i) To introduce and operate e-public transport with good services;

(ii) To promote e-bicycles and e-motorcycles for rent; and

(iii) To develop a genuine eco-tourism program.

2.90 There are many cases of introducing EVs in tourist sites in the world. Lao PDR can refer to other countries and customize the best practices to suit the country’s conditions. The EV promotion strategies for tourist areas are summarized as follows:

(i) Study cases of EV introduction in tourist sites in other countries and cities;

(ii) Investigate travel needs of tourists and residents in tourist areas;

(iii) Formulate an e-public transport plan in tourist areas;

(iv) Identify potential investors and operators of e-public transport and EV rental services;

(v) Establish an effective EV rental system;

(vi) Develop eco-tourism packages which will use EVs;

(vii) Identify required EV infrastructures to promote EV eco-tourism; and,

(viii) Conduct promotion campaigns on EV eco-tourism.


2-34

Box 2.4.2 Example of EV in Tourism Areas 1. Major Introduction Measure of EVs to Tourism Areas

(i) EV Rental: E-motorcycles and e-cars are rented to tourists. The benefits for EV rental users are saving operation cost, getting discount for entrance fees of tourism sites, using EV priority parking spaces, etc.

(ii) EV Taxi: EV taxies are served for tourists as same as the ordinary taxies. However, e-taxi operators can save operation cost, as well passengers can enjoy quiet and smooth driving.

(iii) EV Sharing: E-motorcycles and e-cars are provided as sharing system. The advantage of sharing system is that users can use vehicles for short time with cheaper costs comparing to rental system.

2. Main Benefits to Introduce EVs to Tourism Areas (i) Improve the image of tourism areas: Introducing EVs give the positive image of

tourism areas to visitors due to its environmental-friendliness. EVs are also noise-free vehicles, so that they can create the tranquility for the tourism site which visitors expect in eco-cities, historical cities, and other places.

(ii) Protect and improve the environment: EVs do not emit air emissions, GHG and noises, so that they can protect the environment of tourism areas where people concentrate.

(iii) Attract more tourists: Together with improved environment of tourism areas by EVs, EVs can be a part of attraction for tourists since EVs are still new for people.

3. Case 1: Zermatt, Switzerland Zermatt is one of Switzerland’s most famous holiday resorts and attracts tourists from all over the world, which has about 5,800 populations and 243 km2 of a total area. Access to this town is restricted to vehicles without combustion engine since 1966. At present more than 500 EVs dominate transportation within the town, providing an example for other tourist destinations to follow. Initially implemented to improve the air quality and visibility levels, today this measure is also seen as a key means of reducing the town’s carbon emissions and reducing congestion. Residents wishing to own a car can be issued with a permit by the police allowing residents to drive and park at the northern outskirts of the town. Public transport in Zermatt is met by eight e-buses that run on two circular lines. Permits for EVs are also granted to taxis and hotel owners under certain conditions. All EVs are assembled in three assembly factories in Zermatt. All EVs are equipped with lead-acid batteries because Li-ion battery is weak under cold weather and expensive. When the batteries of e-buses are run out, they are replaced at bus stations. It takes only two to five minutes. This policy keeps the clean environment to attract more tourists as well as contribute to provide jobs related to EVs for residents.

Source: Business Media



2-35

4. Case 2: Nagasaki EV&ITS Project Nagasaki Prefecture in Japan was selected as one of the EV/PHV Towns which is a pilot project to promote EV and PHEV. In this project, Nagasaki chose Goto Island as priority area to introduce EV/PHEV. Goto Island has about 140 islands with 70,000 of total population. Goto is one of the tourism areas in Nagasaki and has proposed to be a World Heritage Site. This project aims to promote environment and tourism of Goto by EV/PHEV introduction and to create new job opportunities for preventing population decrease. The main project component is driving tourism system supported by EV and ITS. About 140 EVs were introduced as car rental service and charging stations were installed at about 30 locations in the island. In addition, ITS spots and tourism information platform provide the tourism information for EV users. In order to introduce EVs to car rental and taxi companies, vehicle dealers and lease companies joined EV consortium of Goto, and they rent their EVs to car rental and taxi companies using subsidy from the prefecture.

Figure 2.4.3 EV Rental Scheme by Consortium in Goto

(c) Rural areas

2.91 As of 2009, about 85% of villages were defined as rural and had a population of more than four million. Of this figure, about 42% or about 1.7 million do not have access to electricity supplies through the national grid. Therefore, small hydropower plants or other sources of renewable energy have been used in these areas. There are many issues faced by rural residents, of which transport-related issues are of higher importance.

(i) High share of transport cost in family expenses: Due to the high prices of fossil fuel, people are constrained to spend more on travel than on other expense item;

(ii) Far from gas stations: Only bigger villages have gas stations; hence, people living in small villages have to drive for more than 10-15 km just to fill up, using up a lot of gas in doing so;

(iii) Lack of roads and poor road conditions: About 21% of rural villages do not have access roads, while some have only earth roads to access main roads. Poor road conditions limit the provision of public services such as electricity and water supply, health care, etc.; and,

(iv) Lack of public transport services: Needless to say, most rural villages do not have public transport services. Only a few have their own transport systems like carpooling.

Nagasaki Prefecture Central Government

Goto EV&ITS Consortium Vehicle Dealer/ Lease Company

Car Rental CompaniesTaxi Companies

• Subsidy• Subsidy

• EV/PHEV Rental

• Project participation fee• Maintenance cost• Operation data/report

• Join to consortium

Nagasaki Prefecture• Subsidy

EV&ITS Consortium

Subsidy

EV&ITS Consortium

Car Rental Companies

EV/PHEV

EV&ITS Consortium

•

•

•

EV&ITS Consortium


2-36

2.92 It is not practical to expect provision of the same EV functions in urban areas to rural areas. However, there are some opportunities to introduce EVs in rural areas to address the above transport issues. EVs can be introduced not only as transport modes but also as agricultural machineries to develop agricultural activities and mobilized electric suppliers. The goal of EV promotion strategy in rural areas is to develop socio-economic situation and to improve living environment in rural areas through EV introduction and promotion. The main objectives of EV promotion strategy in rural areas are as follows;

(i) To improve mobility and accessibility of people in rural areas by introducing EVs;

(ii) To promote green agriculture and lessen production cost in agricultural industry; and,

(iii) To develop new life style of rural areas through EV introduction.

2.93 There are several hurdles for achieving the above objectives since the EV technologies are still under development. For example, cheaper EV is not suitable for using on earth roads. Maintenance system will also be a problem, but it can be an opportunity to create new jobs (i.e., establishing maintenance workshop for EVs). Therefore, it is important to propose EV use in rural areas. The EV promotion strategies include the following;

(i) Clarify travel needs of people in rural areas including destinations, purposes, frequencies, etc.;

(ii) Study on possible EV use in rural areas as both private and public transport mode;

(iii) Identify the possible electric sources to charge EVs;

(iv) Identify the possible use of EVs for agricultural industry;

(v) Study on impacts of introducing EVs for agricultural industry;

(vi) Develop smart-grid concept for target rural communities; and,

(vii) Develop small-scale maintenance system of EVs for rural areas.

(d) Transport corridors

2.94 Transport corridors are composed of national and provincial roads including areas along these roads. NH13 and NH9 are especially assigned as part of the GMS Corridor. These main roads have a very important role in supporting long-distance trips by EVs, because EVs still have a limited cruising distance (about 100 km/charge). The main issues about transport corridors are summarized below.

(i) Poor road conditions: Only 61% of national roads and 9% of provincial roads are paved, which lessens public mobility;

(ii) Lack of parking and rest areas along the corridor: There are many gas stations along national and provincial roads, but no integrated facilities like michi-no-eki or rest stations in Japan; and,

(iii) Lack of an integrated development of transport corridors with influence areas: Transport corridor development has not brought any benefit to areas and communities along the corridors.

2.95 Therefore, the goal of EV promotion strategy for transport corridors is to establish charging stations along main transport corridors to spur an integrated community and



2-37

transport corridor development. It is advisable to develop charging stations for every 10–20 km to provide comfortable environment to EVs users. To achieve this goal, the EV promotion strategy for transport corridors consists of the following:

(i) Formulate a development plan for transport corridors in consideration with EV use;

(ii) Develop EV charging routes in consideration with tourist sites; and,

(iii) Identify opportunities to utilize EVs for local communities along the transport corridors not only as a transport mode but also as a mobile electric supplier.

2.96 Considering the current technology of EVs and the socio-economic conditions of Lao PDR, traveling long distance by EVs may be realized in the long term. However, the condition of the road network in Lao PDR is still under development. Accordingly, the construction cost of rest areas with EV chargers would be cheaper when it is constructed together with road construction or improvement projects. The EV promotion strategies for transport corridors are as follows:

(i) Identify a hierarchy of transport corridors and potential communities to be developed together with transport corridors;

(ii) Determine service needs that should be provided at rest areas;

(iii) Identify potential locations for and functions of rest areas;

(iv) Identify driving routes for tourism and required locations for EV charging stations;

(v) Develop an information dissemination system on EV driving routes with EV charging stations;

(vi) Study opportunities to introduce smart grid system to areas along transport corridors; and,

(vii) Study opportunities to introduce EVs for agricultural industry to reduce the carbon footprint of agricultural products.


Chapter 3 EV Policies and Regulations in EV Introducing Countries

3-1

3 EV POLICIES AND REGULATIONS IN EV INTRODUCING COUNTRIES

3.1 EV Policies and Regulations in Japan

1) EV Promotion Policy

3.1 Promoting the use of environment-friendly vehicles is one of the important policies in Japan. The Japanese Government has raised the propagation target of environment-friendly vehicles in the "Kyoto Protocol Target Achievement Plan (Cabinet Decision, March 2008) " the "Action Plan for Achieving a Low-Carbon Society (Cabinet Decision, July 2008)," and the "Basic Energy Plan (Cabinet Decision, June 2010)." Moreover, environment-friendly vehicles are also included in the Green Purchasing Law to Promote Environment-Friendly Vehicles. In order to disseminate this information to the public, the Ministry of Economy, Trade and Industry (METI); the Ministry of Land, Infrastructure, Transport and Tourism (MLIT); and the Ministry of Environment (MOE) have published a low-emission vehicle guidebook every year.

3.2 In the process of promoting environment-friendly vehicles, METI formulated the "Strategies for New-Generation Vehicles 2010 (April 2010)" which consist of the (i) overall strategy, (ii) battery strategy, (iii) resource strategy, (iv) infrastructure development strategy, (v) system strategy, and (iv) international standardization strategy. These strategies have promoted R&D to improve battery performance and reduce costs, created effective mass production, and lessened weights of vehicle parts, among others. EVs/PHEVs are still being developed, so the cruising range of EVs is limited and the propagated number of EVs/PHEVs is still small. Therefore, EV infrastructure has been developed in the EV/PHV town as a trial case during the market preparation stage. Developing best practices in the EV/PHV town can steer the sector into the path of full development.

3.3 MLIT, together with METI, published a guidebook on the installation of EV/PHEV charging stations and guidelines for introducing ultra-compact mobility, electric buses, and for installing EV charging stations at parking areas. MLIT has also conducted the following projects:

(i) EV promotion project for public transport: This aims to promote environment-friendly public transport in tourism sites and to promote tourism by supporting business establishments that plan to utilize e-buses/EV taxis in tourism sites and other areas. It provides subsidies equivalent to half of the introduction cost of e-buses and its charging facilities, or a third of the introduction cost of EV taxis.

(ii) EV promotion project for local transport: This aims to support transport service providers who carry out advanced actions to introduce and promote EVs in cooperation with the community and/or other service providers. Target EVs are e-buses, e-taxis, and e-trucks. Similarly, subsidies are provided for half of the introduction cost of e-buses and its charging facilities or a third of the introduction cost of e-taxis/e-trucks and their charging facilities.

3.4 The MOE promotes the use of environment-friendly vehicles, but they focus on off-road hybrid vehicles, fuel cell vehicles, and hydrogen vehicles. There is also an outsourced association called the Next Generation Vehicle Promotion Center under METI,

The Preliminary Works for the Technical Cooperation on Low-Emission Transport System FINAL REPORT Chapter 3 EV Policies and Regulations in EV Introducing Countries

3-2

which provides subsidies for purchasing/leasing EVs and clean diesel vehicles. The amount of subsidy ranges from JPY70,000 to JPY850,000 depending on the types of vehicle (see Table 3.1.1 and Figure 3.1.1).

Table 3.1.1 Subsidy on EVs by the Next Generation Vehicle Promotion Center

Category Model Retail Price (JPY000) Subsidy (JPY000)

Car Toyota Prius PHV 2,904–4,022 330

Nissan Leaf 2,847–4,217 700–780

Mitsubishi Outlander PHEV 3,166–4,162 300–350

Honda Fit EV 3,810 850

Mitsubishi i-MiEV 2,476–3,619 620–850

Mitsubishi Minicab MiEV 2,285–2,879 560–850

Compact Car Toyota Coms 636–760 70

Motorcycle Yamaha EC-03 240 30

Honda EV-neo 433–438 70

Source: Next Generation Vehicle Promotion Center

Apply Apply

METI

Next Generation Vehicle

Promotion Center

Individual

Subsidy Subsidy

Apply

Lease company

Subsidy Lease contract

Leaser

Source: Next Generation Vehicle Promotion Center

Figure 3.1.1 Process to Apply for Subsidy from Next Generation Vehicle Promotion Center

3.5 In addition to the EV support projects at the national level, there are similar support projects at the local level (prefecture and city).

2) Tax Incentives for EVs/PHEVs

3.6 Tax incentives for EVs/PHEVs cover vehicle weight tax, vehicle acquisition tax, vehicle tax, income tax, and corporate tax.

(i) Vehicle weight tax: Vehicles that undergo the examination for new vehicles can get a tax exemption/reduction depending on their environmental performance. Under this policy, the EVs/PHEVs, CNG vehicles, and clean diesel vehicles are exempted from the vehicle weight tax upon the first automobile inspection. This exemption is reduced by 50% upon the second inspection.

(ii) Vehicle acquisition tax: Payment of this tax is also exempted/reduced depending on environmental performance. Under this policy, new EVs/PHEVs, CNG vehicles, and clean diesel vehicles are exempted from paying the vehicle acquisition tax. For used EVs/PHEVs, CNG vehicles, and clean diesel vehicles, this tax is reduced to JPY450,000.

(iii) Vehicle tax: The vehicle tax on environment-friendly vehicles is reduced for one year. On the other hand, the vehicle tax on gasoline, diesel, and LPG vehicles is increased



3-3

after a certain number of years of use. The tax reduction rate on EVs/PHEVs and CNG vehicles is 50%. The tax on gasoline and LPG vehicles is increased by about 10% after 13 years of use. That of diesel vehicles goes up by about 10% after 11 years of use.

(iv) Income tax and corporation tax: These are part of the tax reduction policy on green investments. Business persons/establishments who acquire hybrid vehicles, EVs/PHEVs, rapid EV chargers, or hybrid construction machinery can get a special depreciation or tax reduction. Special depreciation covers less than 30% of the standard acquisition cost of vehicles. The reduction of income/corporate tax is applied only to small- and medium-sized businesses (capitalization is less than JPY0.1 billion). The amount of tax reduction is about 7% of the standard acquisition cost of vehicles.

3) EV-related Associations

3.7 There are various stakeholders from the public, private, and academic sectors to introduce and promote EVs/PHEVs. It is useful to promote coordination among these stakeholders who have different individual concerns. This has encouraged the organization of several EV/PHEV-related associations in Japan.

(i) Association for the Promotion of Electric Vehicles (APEV): This association aims to share information through creating a network of business entities, research institutions, and various organizations that are engaged in EV-related business, research or promotion. The association also encourages the entry of new and existing automobile manufacturers into the EV industry, while supporting conversion of existing gasoline vehicles to EVs which is currently carried out on an individual basis. APEV members include vehicle manufacturers, component suppliers, energy companies, municipalities, universities, educational institutions, publishers, and others. APEV has formed seven working groups to achieve their objectives (see Table 3.1.2).

Table 3.1.2 Working Groups in APEV

Working Group Objectives/ Activities

1. Information sharing To develop a cooperation of industry, government and academia and to produce high

value-added information.

2. Proposal of specifications/

promotion of standardization

To establish standards proposed by the APEV and contribute to the improvement of

reliability and safety in the industry.

3. Technical training To conduct training for EV-related persons, including vehicle technicians and

mechanics, in educational institutions and businesses through provision of dispatch

instructors, guidance, lectures, seminars and training, etc.

4. Policy recommendations To approach government, municipalities, and businesses and advocate for EV-related

policies.

5. Demonstration experiments To cooperate with municipalities and enterprises to develop lifestyles in towns where

EVs are present.

6. Fundraising To coordinate with financial institutions and venture capitalists to provide support for

businesses that wish to invest in or enter the EV industry.

7. Collaborative purchasing/sales To identify the needs of participants, attempt uniform lot purchases of high-quality

components at a lower price, and aim to streamline the procurement of each company. Source: Association for the Promotion of Electric Vehicles

(ii) EV/PHV Town Promotion Symposium: The "EV/PHV Town” concept is a project to promote EVs/PHEVs to the whole country. The pilot projects under this concept include introducing EVs/PHEVs, developing charging infrastructure, and conducting information and education campaigns. The EV/PHV Town Promotion Symposium was


3-4

established to select the pilot areas, to provide advice on the action plan for the EV/PHV Town, and to make a master plan on EV/PHV Town concept promotion through sharing basic policies and evaluating concrete actions. The Automobile Division of the Manufacturing Industries Bureau and the New and Renewable Energy Division of the Agency for Natural Resources and Energy (METI) are in charge of the secretariat work for this symposium. The committee members are from the local governments, universities, R&D institutes, automobile manufacturers, and the Japan Automobile Manufacturers Association (JAMA).

(iii) Japan Association of Small Hundreds (JASH): JASH was established as a private organization to support EV conversion businesses. Its main activities are to promote and support the development of EV conversion. The association members disseminate information on better EV parts such as motors, batteries, and others. This information sharing contributes to improved performance and lower costs in EV conversion.

4) Vehicle-related Regulations

3.8 EVs/PHEVs are part of the total population of motor vehicles. Basically, they also need to follow existing vehicle regulations. Vehicle-related laws and regulations in Japan are shown in Figure 3.1.2 (see more details in Appendix 3A). These are classified into three, namely: construction of motor vehicles, drivers/pedestrians, and roads. There are also cabinet orders, ordinances, announcements, and circular notices that support and concretize these laws (see Table 3.1.3).

Source: Country Report: System Related to Motor Vehicle Safety and Environment in Japan (JASIC, 2011)

Figure 3.1.2 Laws and Regulations Related to Vehicles



3-5

Table 3.1.3 Regulations Related to the Road Transport Vehicle Act

Level of Regulations Items

Cabinet Order Cabinet Order for Enforcement of the Road Transport Vehicle Act

Cabinet Order for Registration of Motor Vehicles

Cabinet Order for Fees Related to Road Transport Vehicle Act

Ministerial Ordinance Ordinance for Enforcement of the Road Transport Vehicle Act

Ordinance for Registration of Motor Vehicles

Ordinance specifying application forms, etc. for registration and inspection of motor vehicles

Safety standards for road transport vehicles

Standards for inspection of motor vehicles

Ordinance on motor vehicle mechanics skill certificate

Ordinance for type designation of road vehicles

Ordinance for type designation of equipment for devices

Ministerial Ordinance for light motor vehicles inspection organization

Ordinance for approval of excellent motor vehicle maintenance and repair business operators

Ordinance for designated motor vehicle maintenance and repair business operators

Announcements Announcement specifying details of safety standards of Road Transport Vehicle Act

Circular Notices Ordinance and circular notices related with Road Vehicle Act

Procedures for inspections, etc. of motor vehicles

Procedures for type approval of motor vehicles

Procedures for type designation of devices

Preferential handling procedures for imported motor vehicles Source: Country Report: System Related to Motor Vehicle Safety and Environment in Japan (JASIC, 2011)

5) EV-related Standards and Guidelines

3.9 EVs/PHEVs are somehow different from conventional vehicles. For one, an EV/PHEV has a motor and a battery instead of an engine, and it needs charging facilities to charge its battery instead of getting some gas. For this reasons, the Japanese government issued a specific set of technical standards for EVs/PHEVs, guidelines for installing charging stations, and others.

(1) Safety Standards for EVs/PHEVs

3.10 The safety standards for EVs/PHEVs are stated in the appendix of the “Safety Standards of Road Transport Vehicles.” These standards are provided to protect drivers and passengers against high voltage during instances of collision of EVs, PHEVs, and fuel cell vehicles (FCVs). These safety standards comply with “Regulation No. 100 Uniform Provisions Concerning the Approval of Vehicles with regard to Specific Requirements for the Electric Power Train by UNECE,” which prescribes uniform international safety standards of EVs/PHEVs, etc.

3.11 Safety standards apply to the electric circuit (storage battery for driving, electronic converter, motor for driving, and auxiliary equipment for driving) and storage battery modules and packs of all types of vehicles which have electric motors except motorcycles, three-wheelers, light vehicles with caterpillar, special purpose vehicles, and trailer trucks. Safety standards cover the following conditions:

(i) Electrolytic solution leakage of storage battery modules for driving;

(ii) Fixing of storage battery modules;

(iii) Protection against electric shocks;


3-6

(iv) Mounting position of storage battery packs for driving and electric circuits;

(v) Strength of mounting position for storage battery packs for driving;

(vi) Flame resistance of rechargeable energy storage systems (REESS); and

(vii) Others (e.g., vibration resistance, heat resistance, shock resistance, external short-circuit protection, overcharge protection, overdischarge protection, over temperature protection, emission).

3.12 Conditions (i) to (iii) shall be evaluated by full-wrap head-on and rear-end collision tests. The evaluation criteria and testing methodologies are also determined in the safety standards.

(2) Type Designation Regulations for Devices

3.13 The type designation regulation for devices was issued to start the agreement on mutual recognition of approvals for automotive in 1998. This regulation defines devices in the type designation system. The designated specific devices of EVs/PHEVs are as follows:

(i) Passenger protection device of steering gears at the time of full-wrap head-on collision;

(ii) Protection device against electric shocks in general and at the time of full-wrap head-on collision, offset head-on collision, and lateral collision;

(iii) Storage batteries for motors; and

(iv) Passenger protection device at the time of offset head-on collision and lateral collision.

3.14 The 1958 Agreement is an international mutual recognition system for vehicles which aims to establish uniform regulations (the UNECE regulations) on vehicle structures and equipment relating to safety and the environment and the mutual recognition of equipment based on uniform regulations.

3.15 If any of the above device is certified by a country adopting the UNECE regulations, it does not need certification by other countries that are party to the Agreement and are applying the same UNECE regulations (which means that it is an accepted certification without tests).

(3) Guidelines and Guidebook for Installing Charging Facilities

3.16 The main guidelines for installing charging facilities are contained in the “Guidelines for Installing Charging Facilities at Parking and Other Places” issued by the MLIT and the “Guidebook for Installing Charging Facilities for Electric Vehicles and Plug-In Hybrids” issued by METI and MLIT. In addition, there are also the “Guidelines for Constructing Standard Charging Facilities for EVs” by the Japan Electrical Wiring System Industries Association (JEWA), the “Handbook for Installing and Operating Rapid Chargers for EVs” by CHAdeMO Association, and the “Manual for Installing Charging Facilities to Existing Condominiums” by the Condominium Plan, Reform and Construction Association.

(a) Guidelines for Installing Charging Facilities at Parking and Other Places

3.17 These guidelines state the basic considerations in the allocation of charging facilities for EVs/PHEVs to promote urban development with environment-friendly vehicles.



3-7

The guidelines shall be referred to when studying strategies on installing charging facilities both by the public and private sectors.

3.18 The guidelines include allocations of charging facilities which are safe and convenient for users, describes operability and required spaces for charging facilities, and provides information on charging facilities and their provision. The forms of charging facilities are classified in Table 3.1.4.

3.19 A basic consideration is that EVs are charged longer at home or offices, so that standard chargers can be applied for private charging places. On the other hand, both standard and rapid chargers should be considered for public charging places. If charging sites function as destinations, standard chargers are fine. However, places which are along a travel route or function as emergency charging spots may require rapid chargers.

3.20 The allocation of public charging facilities should be planned on the assumption that EVs are charged fully at private charging places such as homes and offices. Specifically, intervals of each charging station, density of charging stations and charger type will be decided considering the preferences of EV users.

Table 3.1.4 Classification of Charging Facilities at Private and Public Parking Spaces

Form Target Facilities Implementation

Body Considerations Recommended Type

Private (at home or

parking of office)

Detached houses Individual Close to walls of houses

and others Should be cheap

Exterior electrical outlet with 200V

Condominiums Administrator/

Developers

Install near the parking lots

Check available chargers

for mechanical parking

facilities

Exterior electrical outlet

with 200V or 200V Electrical charging pole

Office buildings Entrepreneur Install near the parking lots

Consider installation cost,

convenience, safety, etc.



facilities



Monthly parking

areas

Operators of

parking lots






Public At destination

Commercial facilities Entrepreneur Standard chargers are still

applicable due to relatively

long stay of users at visited

facilities




Short-term parking

lots

Tourist areas

Hotels

Public facilities Entrepreneur

Central/Local

governments



facilities

Standard chargers are still

applicable due to relatively

long stay of users at visited

facilities



Restaurants Entrepreneur Consider staying time of

users



Others

Along route

Parking areas along

expressway

Entrepreneur Staying time of users is

short. Rapid charger


3-8

Form Target Facilities Implementation

Body Considerations Recommended Type

Michi-no-eki

(roadside stations)

Entrepreneur Consider installation cost,

convenience, safety, etc. Commercial facilities Entrepreneur Consider staying time of

users

Rapid charger



Restaurants

Convenience stores

Gas stations

Emergency Car dealer shops Entrepreneur Should be available for

24hours



Rapid charger

Public facilities Central/Local

governments

Convenience stores Entrepreneur Source: Guidelines for Installing Charging Facilities at Parking and Other Places (MLIT)

3.21 Regarding installation spaces, operation spaces for chargers and required space for installation, maintenance, and ventilation need to be considered. In addition, EVs shall be charged even during rainy days, so roofs should be provided over the charging facilities.

3.22 Many public charging stations in Japan are still free of charge. However, in the future, three billing systems can be considered: one for the amount of electric consumed, second for charging time/duration, and still another can be in addition to parking fees.

(b) Guidebook for Installing Charging Facilities for Electric Vehicles and Plug-In Hybrids

3.23 This guidebook was published by METI and MLIT for reference by people who plan to install charging facilities. The guidebook classifies the basis for the decision and considerations by installation cases (private or public). Installing charging stations has to be done by electricians having a certification for electrical insulation work. Electricians also have to comply with technical standards for electrical insulation work, to refer to related regulations, and to follow installation manuals for certain charging facilities.

3.24 A section on private charging facilities in the guidebook includes recommended charging facilities, types of electrical outlet, waterproofing of outlets, electrical wiring for outlets, capacity of power supply, procedure for installing charging facilities, important notices, and others.

3.25 For charging facilities in public spaces, the following are important considerations:

(i) Installing 200V electrical outlets: It is advisable to choose an outlet of new pattern (type B). There are two types of outlets: Type A (conventional one) and Type B (new one). Type A applies to EVs which were sold before September 2010. However, there is a possibility to get a cable set for type B. Type B is more recommended in terms of compatibility and operability.

(ii) Providing outdoor outlets for charging: In general, existing outdoor outlets are not expected to be used for charging EVs. Therefore, power supply may be lower than that required for charging, and it may not have a circuit breaker. If EVs are charged with this kind of outlet, the electricity may be cut off when the breaker trips and people may get an electric shock. For safety, the power supply and availability of a circuit breaker should be checked before installing charging facilities.

(iii) Installing standard chargers with cables: Standard chargers with cables are only



3-9

available for certain types of EVs. Appropriate information on available EVs should be provided to users.

(iv) Installing rapid chargers: Rapid chargers which use more than 20kW of electric capacity are subject to the Fire Prevention Ordinance. Therefore, sign boards, collision prevention (car stop, pole, etc.), fire extinguishers, and others are required.

(v) Installing charging facilities at parking spaces: The location of charging facilities shall be decided based on installation costs, convenience, safety, etc.

(vi) Installing charging facilities in road zones: In order to install charging facilities within road zones, the permission of road administrators is required. In addition, installation locations have to match the standards for occupied space under the Road Act.

(vii) Installing charging facilities at gas stations: When charging facilities are planned to be installed at gas stations, fire stations should be consulted.

3.26 In addition to the above, because public chargers are open to large numbers of people for their use, prevention of mischief, power theft, and damage should be considered. In case of accidents at charging facilities, the necessary contact phone numbers should be displayed around the charging facilities.

(4) Guidelines for Converted Electric Vehicles

3.27 Converted EVs must have the structure and equipment conforming to the technical requirements specified in relevant legislations such as the Road Transport Vehicle Act. However, converted EVs greatly vary with regard to base vehicle structure, details of the conversion, and the parts used. To further ensure vehicle safety and reliability, it is necessary to assume that conversion is carried out as a business involving the selling of vehicles to an unspecified large number of users.

3.28 Based on this perspective, the APEV has established the guidelines for converted EVs. The guidelines cover extensive technical requirements, ranging from those that must be satisfied, to voluntary standards. The technical requirements for structures and devices are listed in Table 3.1.5.

Table 3.1.5 Components of Technical Requirements for Converted EVs

Category Item

General Electric Devices Compliance with requirements specified for electric devices in the Notification of Details

Colors of electric cables

Protection against electric shock in case of collision

High-voltage shutoff system

Electromagnetic compatibility (EMC)

Monitoring of insulation resistance

Drive Batteries Drive battery safety

Method of drive battery installation

Inspection of drive battery electrolyte

Drive battery life indicator

Motors and Drive-trains Strength of connection between motor and drive-train

Strength of drive-train

Motor fixing method

Waterproofing measures for high-voltage motor controller

Wires to the motor


3-10

Category Item

Water resistance of in-wheel motors

Vehicle running performance

Method for confirming maximum output, rated output, and maximum torque

Speed Controllers and

Accelerators

Failsafe functions and other functions for speed controllers and the like

Throttle safety

Installation of contactors

DC/DC Converters and In-

vehicle Battery Chargers

DC/DC converters

In-vehicle battery chargers

Brakes Alternative devices, such as servo brake systems

Installation of electric regeneration brakes

Prevention of Sudden Starting due to Incorrect Operation

Other Devices Alternatives to power steering pumps

Alternatives to defrosters

Vehicle proximity warning devices

Source: Guideline of Converted Electric Vehicles (APEV)

3.29 Aside from compliance with legislation such as the Road Transport Vehicle Act, it is necessary to notify the district transport bureaus in advance about the conversion of a vehicle. For notification, the following documents shall be submitted:

- List of electric devices;

- Description about the compliance with technical standards related to the protection against electric shock;

- A calculation sheet about the strength of the drive battery pack mount;

- Description about the compliance with EV conversion structure standards and a check sheet of measures against electric shock taken for electrically live components;

- Drawings of high-voltage circuits;

- Data on the motor model, maximum output (rotation speed), rated output (rotation speed), and maximum torque (rotation speed) of the vehicle to be converted;

- Calculation sheet about the motor mount strength for a vehicle whose motor weight or maximum torque exceeds the engine weight or maximum torque, or for a vehicle which does not directly use the engine mount of the base vehicle; and

- Drawings showing dimensions of connecting flanges and other parts for the connection between the motor and the transmission, calculation sheet about connection strength, and other documents.

3.30 Vehicle conversion shops also have the following responsibilities:

(i) Preparation and provision of the following documents to vehicle users to ensure the proper maintenance, management, and use of converted EVs:

- Documents describing details of the conversion;

- Lists of devices and parts added;

- Inspection and maintenance manuals;

- Circuit diagrams; and

- Documents giving precautions about driving converted EVs;



3-11

(ii) Full explanation to users about the use, maintenance, and management of converted EVs when selling converted EVs;

(iii) Provision to users of complete information about the drive battery, motor, and other parts added for conversion with clear instructions regarding the required inspection cycles, items, and methods, based on information provided by the manufacturers or vendors of the parts; and

(iv) Provision to users of complete information about the charging equipment and charging method.

6) Vehicle Classifications

3.31 There are two kinds of vehicle classification in Japan. One is the Road Transport Vehicle Act, and the other is the Road Traffic Act. While vehicle registration, vehicle license plate, vehicle related statistics, and vehicle inspection systems are based on the vehicle classification under the Road Transport Vehicle Act, vehicle driving license is based on the vehicle classification under the Road Traffic Act. Vehicle classifications are shown in Table 3.1.6 and Table 3.1.7.

Table 3.1.6 Vehicle Classification under the Transport Vehicle Act

Category Size (m)

Displacement and Others Remarks Length Width Height

Motorized

Bicycle

Category 11) - - - ≤50 cc incl. three-wheeler

Category 2 - - - 50 cc <and ≤ 125 cc

Two-

wheeler

Light ≤ 2.5 ≤ 1.3 ≤ 2.0 125 cc< and ≤250 cc incl. three-wheeler with 50–

250 cc of displacement

Compact If one of the criteria of light two-wheeler,

it is classified as compact two-wheeler. 250 cc<

incl. three-wheeler

Car

Ultra

Lightweight ≤ 3.4 ≤ 1.48 ≤ 2.0

≤ 125 cc

Passenger capacity: ≤2pax

Cannot be driven on

expressways

Light ≤ 3.4 ≤ 1.48 ≤ 2.0 ≤660 cc

Passenger capacity: ≤4pax

Compact ≤ 4.7 ≤ 1.7 ≤ 2.0 ≤ 2,000 cc

No criteria for diesel vehicle

Ordinary-sized If one of the criteria of compact vehicle, it is classified as ordinary-sized vehicle.

Small-sized special motor

vehicles

≤ 4.7 ≤ 1.7 ≤ 2.8 No displacement limitation

Agricultural vehicles: <35 km/h

Others: ≤15 km/h

No limitation on agricultural vehicles

Large-sized special motor

vehicles

Special motor vehicles which exceed the criteria of small-sized special motor vehicles.

No displacement limitation

Truck

Small ≤ 4.7 ≤ 1.7 ≤ 2.0 Max. load: ≤ 2–3 t Trucks and buses are

classified under ordinary-

sized car, but they have

different categories for

licensing plate purpose.

Medium ≤12 ≤ 2.5 ≤ 3.8

GVW: < 8 t and Max. load: 2 t < and < 5 t

Large GVW: 8 t ≤ or Max. load: 5 t ≤

Bus

Small Total length is less than 7 m and the passenger capacity is less than 29 persons

Medium One which is not categorized as small and large buses

Large Total length is more than 9 m or the passenger capacity is more than 50 persons

Source: Transport Vehicle Act


3-12

Table 3.1.7 Vehicle Category under the Road Traffic Act

Category Definition

Motorized Bicycle1) Motorcycle with less than 50 cc of total displacement

Vehicle

Two-

wheeler

Ordinary-sized (compact)

motorcycle Total displacement: exceeds 50 cc and less than 125 cc

Ordinary-sized motorcycle Total displacement: exceeds 125 cc and less than 400 cc

Large-sized motorcycle Total displacement: exceeds 400 cc

More

than

three-

wheeler

Mini car Vehicle which has displacement of less than 50 cc and is not classified as motorized

bicycle

Ordinary-sized car Vehicle which has more than three wheels and is not classified as large-sized car or

special motor vehicle

Large-sized car

Vehicle which is classified as ordinary-sized vehicles under Transport Vehicle Act and

correspond to one of the following: GVW = more than 8 t, max. load = more than 5 t,

passenger capacity = more than 11 persons

Small-sized special

vehicle

Vehicle which has special structures with less than 4.7 m length, less than 1.7 m width

and less than 2.0 m, 15 km/h of maximum speed, and less than 1,500 cc of total

displacement

Large-sized special

vehicle Vehicle which has special structures, but is not classified as small-sized special vehicle

Source: Road Traffic Act

1) including three-wheeler which has less than 50cc of displacement and less than 0.5m of maximum tread without compartment or with compartment

whose side structure is open type.

3.32 Besides the above classification of vehicles, vehicle licensing plates are also classified by purpose (i.e., private, business, car rental, diplomatic, etc.).

3.33 For EVs, vehicle classification is still under discussion. Therefore, specific criteria are set only for motorized bicycles, two-wheelers, and cars (see Table 3.1.8). E-trucks and e-buses are following the same criteria as conventional ones. The category called ultra-lightweight vehicle was established in January 2013 to promote the smaller type of vehicles for short-distance travel. Some limitations are imposed on ultra-lightweight vehicles to ensure safety and environmental performance, such as prohibition to drive on expressways. On the other hand, if ultra-lightweight vehicles run only on roads with a maximum speed limit of 30 km/h, they are excluded from the standard for collision safety.

Table 3.1.8 Electric Vehicle Classification under the Transport Vehicle Act

Category Size (m)

Power and Others Remarks Length Width Height

Motorized

Bicycle

Category 1 - - - ≤0.6 kW incl. three-wheeler

Category 2 - - - 0.6 kW <and ≲ 1.0 kW

Two-

wheeler Compact - - - 1.0 kW<

incl. three-wheeler

Car

Ultra-

Lightweight ≤ 3.4 ≤ 1.48 ≤ 2.0

≤ 8 kW

Passenger capacity: ≤ 2 pax

Using it on expressways is

not allowed.

Light ≤ 3.4 ≤ 1.48 ≤ 2.0 ≤ 0.47 kW

Compact ≤ 4.7 ≤ 1.7 ≤ 2.0

0.6 kW<

Ordinary If one of the criteria of compact vehicle, it

is classified as ordinary-sized vehicle.

Source: Transport Vehicle Act



3-13

3.2 EV Policies and Regulations in Europe


3.34 European Union (EU) member states perceive GHG emissions from the transport sector as one of the major impediments to their sustainable development, so the EU Commission has issued and formulated a wide range of legislation, strategies, initiatives, and programs (e.g., alternative fuels, hybrid vehicles, and EVs) to reduce such emissions.

3.35 One of the EU’s important strategies is the European Commission Communication, or COM (2010) 186 Final. It details several actions aimed at encouraging the development of “green” vehicles and the market uptake of these vehicles. The strategies cover (i) alternative fuels, such as bio-fuels or gaseous fuels (LPG, CNG and biogas), (ii) battery electric vehicles or the plug-in rechargeable type, and (iii) hydrogen fuel cell vehicles. Regarding EVs, this Communication focuses on (i) commercialization (proposal of electric safety condition for approval of each type of EVs, etc.), (ii) standardization (development of standardized charging interface, etc.), (iii) infrastructure development (for charging, etc.), (iv) power generation and distribution (impact assessment on supply system and grid by conditions of low-carbon society, etc.), (v) recycling and delivery of batteries (required change on the existing regulations for battery recycling and used EVs, etc.).

3.36 Aside from COM (2010) 186 Final, there are many other policies and strategies either directly or indirectly related to EV promotion. These include the following:

(i) Directive 2009/33/EC: This is a directive on the promotion of clean and energy-efficient road transport vehicles. It proposes that a possible approach could be based on the internalization of external costs by using lifetime costs for energy consumption, CO2 emissions, and pollutant emissions linked to the operation of the vehicles to be procured as award criteria, in addition to the vehicle price.

(ii) Seventh Framework Programme (FP7): This aims to strengthen the foundation for industrial science technology in Europe and to promote international competitiveness. , Supporting the European Green Cars Initiative (EGCI) is part of this program.

(iii) European Green Cars Initiative (EGCI): This aims to promote research on the use of renewable and non-polluting energy resources, safety, and technology to solve traffic flow problems, and research on infrastructure for smart energy.

(iv) European Road Transport Research Advisory Council (ERTRAC): The ERTRAC serves as the European Technology Platform (ETP) for Road Transport which prepared the "European Roadmap for the Electrification of Road Transport." The roadmap forecast the production of EVs to reach 5 million by 2020.

(v) Sustainable Green Fleets (SUGRE): This European program, which is supported by Intelligent Energy Europe (IEE), aims to electrify vehicles and boats in tourist sites in Spain, France, Greece, Italy, Croatia, and Austria.

3.37 In addition to the above policies and strategies, there are also some strategies on the standardization of EV chargers, as follows:

(i) EU strategy on clean and energy-efficient vehicles: This aims to realize the interoperability of the charging process in the EU. For this purpose, it is important to standardize plugs and outlets;


3-14

(ii) Roadmap on regulations and standards for the electrification of cars: The roadmap emphasizes the importance of developing a standard charging system. However, it leaves the issue of interoperability of the charging system to auto manufacturers, power supply entities, and others;

(iii) European strategy for clean and energy efficient vehicles-Rolling plan of 14 December 2010: Based on this plan, the EU Committee provided the mandate to CEN, CENELEC, and ETSI for formulating standards of charging interface between the smart grid and EVs; and

(iv) Agreement of ACEA, 24 June 2010: The members of ACEA agreed on the connection specifications of EVs and grids.

3.38 Each European country also has its own policies and strategies to promote EVs. Some of their policies and strategies are listed in Table 3.2.1.

Table 3.2.1 EV Promotion Policies and Strategies in European Countries

Country Policy/Strategy

Austria National Implementation Plan for Electric Mobility

England

Infrastructure development carried out to attract the enterprises and increase EV demand

Energy White Paper

Low Carbon Transition Plan

Carbon Plan

France

Grenelle I & II Law

Energy White Paper

Renewable energy development strategy with high environmental quality

Climate Plan

Electric Vehicles Plan (2009)

Germany

Long-Term Energy Concept

E-mobility National Development Plan

Infrastructure development vision as a comprehensive system, including charging stations

and renewable energy-related infrastructure.

Netherlands Energy Innovation Agenda, E-mobility Action Plan

Spain Energy Saving and Efficiency Strategy Action Plan 2008 - 2012, Electric Mobility Plan

Switzerland Energy Schweiz



3.39 Incentives provided to promote EVs/PHEVs vary among countries. Some give tax incentives, like tax reductions and exemptions, to EV purchasers. Others give subsidies to EV purchasers. Aside from these incentives for purchasing EVs, they also provide incentives at public charging stations, e.g., free parking, free charging of EVs, priority parking lots for EVs, etc.

3.40 Table 3.2.2 lists the incentives for EVs provided in each country.



3-15

Table 3.2.2 Incentives given by European Countries to EVs/PHEVs Users

Country Incentive

Austria Exemption from fuel consumption tax, levied upon the first registration, and from the monthly vehicle tax

England

Plug-in Car Grant: Provision of tax credit byas much as 25% of the value of EVs (up to GBP5,000)

Plug-in Van Grant: Provision of tax credit byas much as 20% of the value of electric commercial vehicles (up

to GBP8,000)

Exemption from vehicle tax

Green Vehicle Discount Scheme : Exemption from congestion charge in London (GBP8/day)

Free of charge at public parking spaces in London

France Provision of a bonus up to EUR7,000 but capped at 30% of the vehicle price including VAT

Germany Exemption from the annual circulation tax for the first five years from the date of their first registration

Italy

Exemption from the annual circulation tax or ownership tax for five years from the date of their first

registration

After five years, 75% reduction of the tax rate applied to equivalent gasoline-powered vehicles

Netherland Exemption from the registration fee and road taxes

Provision of priority parking spaces for EVs in Amsterdam

Norway Exemption from sales tax, road tax, public parking fees, toll payment

Allowed to use bus lanes

Spain Provision of subsidy for the acquisition of EVs for up to 25% of the purchase price to a maximum of

EUR6,000 per vehicle. Source: JICA Study Team compiled from several information sources


3.41 In Europe, there are many EV-related associations and groups at the regional and country levels. Some are under the government, but others are private associations. The regional associations are the following:

(i) European Association for Battery, Hybrid and Fuel Cell Electric Vehicles (AVERE): AVERE is a European network comprised of members including users, NGOs, associations, interest groups, public bodies, R&D entities, vehicle and equipment manufacturers, and electric utility companies (see Table 3.2.3). Its main objective is to promote the use of battery, hybrid, and fuel cell electric vehicles to achieve greener mobility in cities and countries. The main activities to achieve these objectives are related to information dissemination, networking, monitoring, participation in European and multilateral projects, lobbying, R&D, among others. In public policy advocacy, AVERE presents the concerns of the electric drive industry and R&D bodies to the European Commission.

Table 3.2.3 National Members of AVERE

Country Name of Association

Austria Austrian Sustainable Mobility (BV Mobil)

Belgium Belgian Electric Vehicle Association (ASBE)

Bulgaria Bulgarian Electric Vehicle Association (BAEPS)

Czech Republic Czech Electric Cars Association (Elektromobility)

Finland The Federation of Finnish Technology Industries (Electro Mobility Branch Group)

France Association pour le Développement du Véhicule Electrique (AVERE France)

Germany German Federal Association Solar Mobility e.V. (BSM)

Greece Hellenic Institute of Electric Vehicles (HEL.I.E.V)

Italy CommissioneItaliana Veicoli Elettrici Stradali (CIVES)

Monaco MC2D – Monaco Développement Durable (AMAVE)

Netherlands Formule E-Team (Nederland Elektrish) (Formule E-Team)

Norway Norwegian Electric Vehicle Association (NORSTART)

Poland Polish Electric Vehicle Association (Poland)


3-16

Country Name of Association

Portugal Associação Portuguesa do Veículo Eléctrico (APVE)

Slovenia Slovenian Electric Vehicle Association (DEVS)

Spain Asociación para la Promoción de los Vehículos Eléctricos y No Contaminantes de

España (AVELE)

Sweden New association to be formed.

Switzerland Collaboration with e'Mobile

Tunisia Tunisian Electric Vehicle Association

United Kingdom New association to be formed.

Source: AVERE

(ii) European Electro-Mobility Observatory (EEO): EEO aims to monitor all major EV developments in Europe to facilitate fact-based policy at all levels and to engage a large number of local authorities and industry stakeholders. The EEO internet portal will allow fast and effective data input and analysis and reduce the duplication of surveys. In addition, regular workshops and webinars will be organized to address major issues and to exchange experiences and best practices.

(iii) European Association for Hydrogen and Fuel Cells and Electro-Mobility in European Regions (HyER) (formerly HyRaMP): HyER was established in collaboration with the EU Commission in 2008. HyER supports the deployment and uptake of hydrogen and fuel cell technologies and electromobility in Europe to contribute positively to CO2 emissions reduction, environmental protection, as well as economic growth and employment. HyER is representing over 30 regions and cities in Europe. Its main activities include the following:

- Collecting data and monitoring impact: As a partner in several EV projects, HyER is collecting up-close insights on performance and necessary infrastructure requirements to facilitate fact-based policies;

- Developing long-term EU support framework: HyER is cooperating with EU institutions and national governments to develop the necessary policy support framework to establish a sustainable market and to build infrastructure throughout Europe; and

- Defining concrete plans for market introduction: By exchanging best practices and working closely with technology providers, HyER is developing effective procurement strategies and market support mechanisms.

(iv) Association of European Cities interested in Electric Vehicles (CITELEC): Founded in 1990 under the aegis of the European community, CITELEC is an international non-profit association under Belgian law. CITELEC aims to disseminate the idea of electric mobility through informing its members about the developments in the field of electrically propelled vehicles, participating with them in research and demonstration projects in the field, evaluating vehicles and related technologies such as charging infrastructure, and taking part in international standardization.

(v) European Association for Battery Electric Vehicles (Going-Electric): Going-Electric was started in May 2008 as a de facto association by Jacques de Selliers and a few other EV afficionados. Their aim was to complement AVERE regarding European advocacy for EVs. Since the association grew, it decided to become an international non-profit association under the Belgian law (Association Internationale Sans But Lucratif or AISBL). The mission of Going-Electric is to be the voice of all EV



3-17

stakeholders towards a European legislative framework enabling a European leadership in EV production and commercialization.

(vi) Light Electric Vehicle Association (LEVA): LEVA represents the strategic interests of light electric vehicle (LEV) retailers, dealers, distributors, manufacturers, and suppliers to promote the development, sale, and use of LEVs worldwide. Members receive support and educational resources to expand their businesses while initiating efforts to influence and adopt legislation, regulation, performance standards, promotion, and general best practices in the LEV industry.

3.42 In addition to the aforementioned regional associations, each country has an EV association or a similar one to promote sustainable development as well as electric transportation and mobility. In general, an association is composed of vehicle and equipment manufacturers, institutional organizations, urban mobility service providers, and users of EVs, etc.


3.43 At the regional level, the Europe Commission has several regulations related to EVs, as follows:

(i) Directive 2007/46/EC (Establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles): The legislative framework for the type approval of motor vehicles has been extended to cover all road vehicles irrespective of their means of propulsion. Thus, it now includes alternative powertrain vehicles, for example BEVs and HEVs. EVs can be subsumed under Article 3 No. 11"Motor Vehicle" or No. 15 "Hybrid Electric Vehicle." At the moment, there are no specific technical requirements in the type approval legislation to deal with the specific characteristics and specific risks of EVs with a view to protecting users from electric shock, other safety issues, and environmental performance.

(ii) UNECE-R 100 (Uniform provisions concerning the approval of vehicles with regard to specific requirements for the electric powertrain): This deals with the electric safety of vehicles, but it is not yet mandatory for the EC type approval of vehicles. UNECE-R 100 sets out safety requirements for the approval of vehicles equipped with an electric powertrain (fully electric and hybrid vehicles). Specifications for the electric powertrain include terms, definitions, and application aspects for the approval of EVs to ensure a high level of public safety. It also provides specifications and tests. EVs must incorporate protection against electric shock and direct contact. To provide protection with respect to live parts inside the passenger compartment or luggage compartment, the protection degree IPXXD must be provided. In other areas, the protection degree IPXXB must be adhered to for live parts. High voltage is defined as >60V and ≤1500V DC or >30V and ≤1000V AC root mean square.

(iii) UNECE-R51 (Noise emission): The vehicle, its motor and muffler have to be structured in such a way that the vehicle conforms to UNECE-R 51 under regular operating conditions. According to this, only the driving noise of EVs is to be controlled, not the noise in stationary state.

(iv) UNECE-R 83 (Emissions of M1 and N1 vehicles) and UNECE-R 101 (Emission):


3-18

These regulations discuss emissions from EVs.

(v) Directive 2006/112/EC (Common system of value-added tax): Value-added taxes (VAT) are paid upon purchasing EVs. This directive determines a minimum percentage of VAT in the amount of 15%. Exemptions for clean energy cars are not available at the moment.

(vi) Directive 72/166/ECC (Liabilities arising from the use of vehicles): In combination with directives 84/5/EEC, 90/232/EEC and 2005/14/EC, last amended by 2005/14/EC62, this regulates the duty for a motor insurance coverage in Europe. No vehicle, including all kinds of EVs, is allowed on the road without a motor insurance that could cover damage to other parties.

(vii) Directive 2004/54/EC (Minimum requirements for tunnels in the Trans-European Road Network): Based on its responsibility for traffic and emergency management, this directive contains provisions regarding tunnel safety in order to avoid accidents causing damage to humans, the environment, and tunnel equipment. To date, there have been no special safety provisions for EVs. Eurotunnel, operator of the channel tunnel between France and England, does not accept LPG or equivalent flammable gas and dual-powered vehicles for transport. Similarly, no EVs are permitted.

(viii) Directive 2000/53/EC (End-of-life Vehicles): This aims to decrease the quantity of waste arising from vehicles. It encourages vehicle manufacturers and importers of vehicles into the EU to limit the use of hazardous substances in their new vehicles. Since 1 July 2003, the use of mercury, hexavalent chromium, cadmium, and lead in the components of vehicles placed on the market has been prohibited. Producers, distributors, dismantlers, etc. must give information on the design of the vehicles and their components (capacity for recovery and recycling), the treatment of end-of-life vehicles, the development and improvement of methods for re-using, recycling and recovering end-of-life vehicles and their components. This directive does not address EVs particularly, but all rules are to be applied to EVs as well.

(ix) Directive 2006/66/EC (Batteries and accumulators and waste batteries and accumulators): This directive prohibits the placing on the market of certain batteries and accumulators with a proportional mercury or cadmium content above a fixed threshold. It is also prohibited to put waste from industrial and automotive batteries and accumulators into landfills, or to incinerate it; only residues from treating and recycling them may be disposed of in these ways. Producers have to bear the cost of collecting, treating, and recycling industrial, automotive and portable batteries and accumulators, as well as the costs of campaigns to inform the public of these arrangements. All producers of batteries and accumulators have to be registered.

(x) Common Standard for Charging Electrified Vehicles: On 28 January 2013, the European Commission has announced that the "Type 2” plug developed by the German company Mennekes will be the common standard for charging EVs across the EU. There are two types of charging stations: one is Type 2 developed by Germany, the other is Type 3 developed by France and Italy. EVs in France cannot charge in Germany because of different standards. Therefore, the European Commission standardized the charging stations in the EU.



3-19


3.44 In Europe, the classifications for vehicles (see Table 3.2.4) are defined by the following: (i) Commission Directive 2001/116/EC of 20 December 2001, adapting to technical

progress Council Directive 70/156/EEC on the approximation of the laws of the member states relating to the type approval of motor vehicles and their trailers;

(ii) Directive 2002/24/EC of the European Parliament and of the Council of 18 March 2002, relating to the type approval of two- or three-wheeled motor vehicles and repealing Council Directive 92/61/EEC.

Table 3.2.4 Vehicle Classification in Europe

Category Definition

L: all two- or three-wheeled motor vehicles L1e

Two-wheeled

Displacement: not exceeding 50 cm3 ( ICE)

Maximum continuous rated power: no more than 4 kW (EV)

L2e

Three-wheeled

Displacement: not exceeding 50 cm3 (spark ignition type)

Maximum continuous rated power: not exceeding 4 kW (other ICE)

Maximum continuous rated power: not exceeding 4 kW (EV)

L3e

Two-wheeled vehicle without a sidecar

Displacement: more than 50 cm3 (ICE)

Maximum design speed: more than 45 km/h

L4e

Two-wheeled vehicle with a sidecar



L5e

Vehicle with three symmetrically arranged wheels



L6e

Light quadricycle

Unladen mass: not more than 350 kg without batteries in case of electric vehicles

Maximum design speed: not more than 45 km/h

Displacement: not exceeding 50 cm3 (spark ignition type)

Maximum continuous rated power: not exceeding 4 kW (other ICE)

Maximum continuous rated power: not exceed4 kW (EV)

L7e

Quadricycle

Unladen mass: not more than 400 kg without batteries in the case of electric vehicles

Maximum net engine power: not exceeding 15 kW

M: Motor vehicle with at least four wheels (passenger vehicle)

M1 No. of seats: no more than eight seats in addition to the driver's seat

M2 No. of seats: more than eight seats in addition to the driver's seat

Maximum mass: not exceeding 5 t

M3 No. of seats: more than eight seats in addition to the driver's seat

Maximum mass: exceeding 5 t.

N: Motor vehicle with at least four wheels (goods vehicle)

N1 Maximum mass: not exceeding 3.5 t

N2 Maximum mass: exceeding 3.5 t but not exceeding 12 t

N3 Maximum mass: exceeding 12 t

O: Trailers including semi-trailers

O1 Maximum mass: not exceeding 0.75 t

O2 Maximum mass: exceeding 0.75 t but not exceeding 3.5 t

O3 Maximum mass: exceeding 3.5 t but not exceeding 10 t

O4 Maximum mass: exceeding 10 t

Source: Commission Directive 2001/116/EC, Directive 2002/24/EC

3.45 Regarding category L (two- or three-wheeled vehicles and quadricycles), COM (2010) 542 Final Regulation (EU) of the European Parliament and of the Council on the

http://en.wikipedia.org/w/index.php?title=Directive_2002/24/EC&action=edit&redlink=1


3-20

approval and market surveillance of two- or three-wheeled vehicles and quadricycles, further defined each sub-category (see Table 3.2.5).

Table 3.2.5 Supplemental Sub-classification Criteria for Vehicle Category L

Category Sub-category Category Name Classification Criteria

L1e L1Ae Powered cycle Primary aim is to aid pedaling and vehicle equipped with an auxiliary propulsion

Maximum design speed ≤ 25 km/h

Maximum continuous rated power≤ 1 kW (EV)

L1Be Two-wheeled

moped


Maximum continuous rated power ≤ 4 kW (EV)

L2e Three-wheeled

moped

Three wheels and powered by propulsion

Engine capacity ≤ 50 cm3 (ICE)



L3e L3e-A1 Low-performance

motorcycle

Engine capacity ≤ 125 cm3 (ICE)


Power / weight ratio ≤ 0.1 kW/kg

L3e-A2 Medium-

performance

motorcycle

Maximum continuous rated power ≤ 35 kW (EV)

Power/ weight ratio ≤ 0.2 kW/kg (EV)

Not derived from a vehicle equipped with an engine of more than double its power

L3e-A3 High-performance

motorcycle

Any other vehicle of the L3e category

L4e Two-wheeled

motorcycle with

sidecar

Complying with the classification criteria for L3e vehicles

Equipped with a sidecar

L5e L5Ae Tricycle Powered tricycles

L5Be Commercial Tricycle

Designed and used as commercial vehicles

Characterized by an enclosed driving and passenger compartment accessible via two or more doors

L5Be-U Tricycle for utility purposes

Designed for the carriage of goods with loading bed that meets one of the following:

- Length loading bed x width loading bed > 0.3 x Length vehicle x Width vehicle, or

- an equivalent loading bed area as defined above used to install machines/equipment

L5Be-P Tricycle for passenger transport

Equipped with 2-4 passenger seating positions including the seat for the driver

All seating positions equipped with seatbelts.

L6e L6Ae Light on-road quad

Not complying with the special categorization criteria for sub category L6Be vehicles


Engine capacity ≤50 cm3 (PI engine forms part of the vehicle's propulsion configuration)

L6Be Light mini-car Enclosed driving and passenger compartment accessible via two or more doors


Engine capacity ≤ 50 cm3(PI engine forms part of the vehicle's propulsion configuration)

Length vehicle x Width vehicle ≤4.4 m2 with a maximum Width vehicle ≤1.5 m

L6Be-U Light mini-cars for utility purposes


- Length loading bed x width loading bed > 0.3 x Length vehicle x Width vehicle, or


L6Be-P Light mini-car for passenger transport

Designed and used for passenger transport

Equipped with two passengers seating positions including the seat for the driver

Both seating positions equipped with seatbelts

L7e L7Ae Heavy on-road quad

Not complying with the specific criteria for subcategory L7Be vehicles

Equipped with 1-2 passenger seats including the seat for the rider

L7Be Heavy mini-car Enclosed driving and passenger compartment accessible via two or more doors

Equipped with 2-4 passenger seating positions including the seat for the rider



3-21

Category Sub-category Category Name Classification Criteria

L7Be-U Heavy mini-car for utility purposes


- Length loading bed x width loading bed > 0.3 x Length vehicle x Width vehicle or


L7Be-P Heavy mini-car for passenger transport

Designed and used for passenger transport

Equipped with less than or equal to 4 passenger seats including the seat for the driver

All seating positions equipped with seat belts.

Source: COM(2010) 542 Final


3-22

3.3 EV Policies and Regulations in the United States


3.46 In 2009, U.S. President Barack Obama signed the American Recovery and Reinvestment Act of 2009 (ARRA), an economic stimulus package. The main objectives of ARRA was to save and create jobs almost immediately and provide temporary relief programs for those most impacted by the recession and to invest in infrastructure, education, health, and "green" energy. From the funding of ARRA, the Department of Energy (DOE) awarded USD2.4 billion to 48 projects for manufacturing EVs, vehicle batteries, and components.

3.47 In 2011, the Blueprint for a Secure Energy Future was announced by President Obama to develop and secure America's energy resources, to provide consumers with choices to reduce costs and save energy, and to innovate their way to a clean energy future. This plan set the ambitious goal that by 2015 America would have one million EVs on the road. It proposed to speed the adoption of EVs with new more effective tax credits for consumers and support for communities that create an environment for widespread adoption of these advanced vehicles. The proposed actions related to EVs include the following:

(i) Making EVs more affordable and accessible for American consumers: The U.S. administration’s FY 2012 budget proposed the conversion of the existing USD7,500 tax credit into a rebate, which will give consumers the ability to receive this benefit at the point of sale. Pending the passage of legislation by Congress, the current individual credit will be reformed into a tax rebate claimable by dealers or financiers with clear transparency requirements to ensure the benefit of the credit is passed on to consumers.

(ii) Rewarding communities for leadership in reducing regulatory barriers and developing comprehensive electric vehicle-friendly infrastructure: The DOE is beginning a competitive program to help communities across the country become early adopters of EVs through regulatory streamlining, infrastructure investments, vehicle fleet conversions, deployment of EV incentives, partnerships with major employers/retailers, and workforce training.

(iii) Supporting applied R&D that supports innovative manufacturing and technology deployment: The President’s FY 2012 budget also supported efforts to decrease the costs of solar energy, tap the enormous offshore wind resources along America’s coastlines, expand geothermal energy, and increase industrial efficiency in the U.S. manufacturing sector. The budget also supported critical materials for EVs and wind turbines to better identify supply sources, reduce material requirements, and design devices that use alternative materials.

(iv) Ensuring access to critical minerals needed for clean energy: Many new and emerging clean energy technologies (e.g., the components of wind turbines and EVs) depend on critical materials with unique properties (e.g., rare earth elements). The availability of a number of these materials is at risk due to their location, vulnerability to supply disruptions, and lack of suitable substitutes. The President’s FY 2012 budget supported a DOE Innovation Hub to pursue R&D in all aspects of critical



3-23

minerals.


3.48 Incentives to promote EVs/PHEVs are provided by the nation and its states. The main measures to provide incentives are (i) tax exemptions, (ii) credit/subsidy provision, (iii) free parking, (iv) permission to use special lanes such as HOV lane, (v) exemption from vehicle inspection, and so on. Federal incentives are as follows:

(i) For Cars: USD2,500 to USD7,500 tax credit, depending on size of battery (4 kWh to 16 kWh) for EVs/PHEVs. This is the best and biggest new incentive brought on ARRA, and applies to at least 200,000 units per vehicle manufacturer before it begins phasing out;

(ii) For 2- or 3-wheelers: About 10% consumer tax credit for 2- or 3-wheeled vehicles (up to a maximum of USD2,500 tax credit on vehicles costing USD25,000 and above). This incentive further lowers the cost of the most affordable EVs, that is, electric motorcycles and enclosed 3-wheelers. Vehicles must have a minimum of 4 kWh of batteries and a top speed of at least 40 mph; and

(iii) For Charging Stations: The EV infrastructure tax credit on an EV charge station is 30% up to USD1,000 for consumers and 30% up to USD30,000 for businesses.

3.49 The incentives provided by the states are summarized in Table 3.3.1.

Table 3.3.1 Incentives for EV/PHEV Promotion by the States

State Incentive

Alabama Alabama Power offers a Business Electric Vehicle Time-of-Use (BEVT) rate for electricity purchased to charge EVs

used for non-residential purposes.

Arizona Lower licensing fees available for EVs.

Carpool lane access available for EVs.

Tax credit up to USD75 for EV charging outlet.

California Clean Vehicle Rebate Project (CVRP) provides up to USD2,500 for EVs, USD1,500 for PHEVs, and USD900 for e-

motorcycles and NEVs.

Various utilities throughout the state also offer discounted rates for residential vehicles charging during off-peak hours.

Clean Air Vehicle Decals for carpool lane access available for EVs and PHEVs.

Colorado Income tax credit totaling 75% of the cost premium for an EV/PHEV purchase up to USD6,000.

Florida EVs are exempt from most insurance surcharges.

Carpool lane access for EVs.

Georgia Income tax credit for up to 20% of EV cost (max. USD5,000) or 10% of conversion cost (max. USD2,500).


Electric vehicle service equipment (EVSE) installation tax credit of 10% of EVSE cost (max.USD2,500).

Idaho EVs are exempt from motor vehicle inspection.

Illinois Covers 80% of cost premium or conversion price, with maximum rebate of USD4,000.

Louisiana Tax credit equaling 50% of cost premium for EV/PHEV purchase, 50% of conversion cost, or a tax credit worth 10% of

the cost of a new EV/PHEV vehicle (max. USD3,000).

This same credit also applies to charge station costs.

Maryland Income tax credit of 20% of EVSE cost (max. USD400).

EVs and PHEVs exempt from excise tax (max. USD2,000).

USD20,000 voucher available for new all-electric trucks.

Michigan EVs/PHEVs are exempt from personal property taxes.

EVs are exempt from emissions inspections.

Missouri EVs are exempt from state emissions inspections.

Montana Credit only available for conversion costs. Maximum USD500 credit or 50% of conversion cost.

Nebraska EVs/PHEVs qualify for Nebraska's Dollar and Energy Saving Loan Program. Maximum loan amount is USD750,000 per

https://energycenter.org/index.php/incentive-programs/clean-vehicle-rebate-project/about-cvrp

http://www.dmv.ca.gov/vr/decal.htm


3-24

State Incentive

borrower, at an interest rate of 5% or less.

Nevada EVs are exempt from public parking meters and emissions inspections.

New Jersey Sales tax exemption for qualifying EVs.

Rebates on EV purchases also available for local governments.


North Carolina HOV lane access and emissions inspection exemption for EVs.

Ohio Will provide funding for 80% of the cost of purchasing and installing EV charging stations.

Oklahoma 50% rebate, applies to either conversion cost or the cost premium of a new EV purchase.

For PHEVs, the credit is based on the portion of the vehicle attributable to propulsion by electricity.

Credit also available for 75% of charge station cost.

Oregon Credit of 25% (max. USD750) of purchase price or conversion cost to EV.

Pennsylvania USD3,500 rebates for PHEV (battery 10 kWh or over) and EV (battery under 10 kWh) to the first 500 qualified

applicants.

A USD1,000 rebate will be offered for any PHEV or EV (battery < 10 kWh).

A USD500 rebate will be offered for electric motorcycles/scooters.

Rebate available up to 6months after purchase.

Sales tax exemption being considered.

South Carolina Income tax credit equaling20% of federal credits for EVs/PHEVs.

Additional legislation pending.

Tennessee Offering USD2,500 rebate for first 1,000 vehicles sold in state.

Texas Considering sales tax exemption.

Utah Up to USD750 credit for EV and PHEV purchases and up to USD2,500 credit for conversions.

Washington EVs are exempt from 6.5% sales tax and PHEVs exempt from the motor vehicle sales tax of 0.3%.

Tax exemptions also apply to charge station parts and labor costs.

West Virginia Income tax credit of 35% of vehicle purchase costs or 50% of conversion cost, up to USD7,500 for vehicles less than

26,000 lbs and up to USD25,00 for vehicles greater than 26,000 lb (expires 31 Dec. 2021).

Infrastructure tax credits of 50% of installation cost, up to USD10,000 for residential, up to USD250,000 for commercial,

and up to USD312,500 for publicly accessible charging.

Source: Plug In America


3.50 The major associations related to EVs in the U.S. are the Electric Drive Transportation Association (EDTA) and Electric Auto Association (EAA). Besides them, there are also EV-related associations in various states, cities, universities, and others.

(i) Electric Drive Transportation Association (EDTA): EDTA is the preeminent US industry association dedicated to the promotion of electric drive as the best means to achieve the highly efficient and clean use of secure energy in the transportation sector. EDTA conducts public policy advocacy, education, industry networking, and international conferences. The membership includes vehicle and equipment manufacturers, energy companies, technology developers, component suppliers, government agencies, and others.

(ii) Electric Auto Association (EAA): The EAA is a non-profit educational organization that promotes the advancement and widespread adoption of EVs. The EAA acts as a public source of information to communicate developments in EV technology, to encourage experimentation in the building of EVs, and to organize public exhibits and events of EVs, and to educate the public on the progress and benefits of EV technology. The missions of EAA are:

- To act as a source of information for the membership, other organizations and the public, on the current state of EV technology worldwide;



3-25

- To encourage experimentation in the building of EVs, particularly to improve energy and resource efficiency, reduce emissions and improve vehicle safety;

- To promote and organize public exhibits of EVs built by members and others for the purpose of informing the public on the progress of EV technology and conducting public opinion polls; and

- To use all media, such as newsletters, websites, information packages, and other paper and electronic media designed to inform the public and promote the cause of EVs.


3.51 In April 2012, the American National Standards Institute (ANSI) released a Standardization Roadmap for Electric Vehicles (version 1.0), developed by the Institute's Electric Vehicles Standards Panel (EVSP). The roadmap assesses the standards, codes, and regulations, as well as conformance and training programs, needed to facilitate the safe, mass deployment of EVs and charging infrastructure in the United States. The roadmap version 2.0 developed in May 2013 tracks progress to implement recommendations made in the roadmap version 1.0 and identifies additional areas where there is a perceived need for standardization work to help facilitate the safe, mass deployment of EVs and charging infrastructure in the USA.

3.52 In addition, the Society of Automotive Engineers (SAE) established EV-related standards and guidelines, including safety standards, battery standards, etc. (see Table 3.3.2). Some of the standards on EVs/PHEVs are still under discussion.

(a) Standardization Roadmap for Electric Vehicles: The primary focus is light-duty, on-road, plug-in EVs that are recharged via a connection to the electrical grid, and comprises an assessment of the current standardization landscape as well as needs and recommendations for activity in three broad domains: vehicles, infrastructure, and support services. The main findings and outcomes include the following:

- EVs offer the potential to significantly reduce the use of imported oil, create jobs, and reduce vehicular emissions. The demand from both regulators and consumers for “greener” vehicles must be met.

- The relevant standards, codes, regulations, conformance and training programs are necessary to satisfy EV user requirements.

- Priority concerns that may be interfering with the acceptance of EVs are identified, and their standardization needs addressed, including cost issues, the unique safety complexities of EVs, interoperability and convenience of charging options, and performance.

- A key focus of the roadmap is the establishment of an interoperable charging infrastructure to mitigate the current range limitations of EVs.

- The roadmap also outlines standardization needs for comprehensive support services sector, including training of emergency first responders, vehicle technicians, electrical installers and inspectors, as well as education of authorities having jurisdiction, building owners, and consumers.

- The roadmap was developed by a collaborative effort of participants from the


3-26

automotive, utilities, and electrotechnical sectors, standards developing organizations (SDOs), and government agencies.

- Coordination and harmonization efforts among international standardizing bodies since publication of the original roadmap are also addressed to help foster innovation and grow global markets for EVs.

(b) Guidelines for Electric Vehicle Safety (SAE J2344): This identifies and defines the preferred technical guidelines relating to safety for EVs during normal operation and charging. The guidelines do not necessarily address maintenance, repair, or assembly safety issues. The purpose is to provide introductory safety guidelines information that should be considered when designing EVs for use on public roadways. This document covers EVs having a gross vehicle weight rating of 4,536 kg or less that are designed for use on public roads.

(c) Plug-In Electric Vehicle Interoperability with Electric Vehicle Supply Equipment (EVSE) (SAE J2953/1): This establishes requirements and specifications by which a specific PHEV and EVSE pair can be considered interoperable. The test procedures are further described in J2953/2.

(d) Safety Standard for Electric and Hybrid Vehicle Propulsion Battery Systems Utilizing Lithium-based Rechargeable Cells (SAE J2929): This standard defines a minimum set of acceptable safety criteria for a lithium-based rechargeable battery system to be considered for use in a vehicle propulsion application as an energy storage system connected to a high voltage power train. While the objective is a safe battery system when installed into a vehicle application, this Standard is primarily focused, wherever possible, on conditions which can be evaluated utilizing the battery system alone. As this is a minimum set of criteria, it is recognized that the battery system and vehicle manufacturers may have additional requirements for cells, modules, packs and systems in order to assure a safe battery system for a given application.

(e) Minimum Sound Requirements for Hybrid and Electric Vehicles: This is a proposed rule under Federal Motor Vehicle Safety Standards. This new standard would require HEVs and EVs to produce sounds meeting the requirements of this standard. This standard would ensure that blind, visually-impaired, and other pedestrians are able to detect and recognize nearby hybrid and electric vehicles, as required by the PSEA, by requiring that hybrid and electric vehicles emit sound that pedestrians would be able to hear in a range of ambient environments and contain acoustic signal content that pedestrians will recognize as being emitted from a vehicle.



3-27

Table 3.3.2 EV/PHEV-Related Standards in USA

Category Standards

Vehicle Systems SAE J-1715: HEV and EV Terminology

SAE J-2464: Electric and Hybrid Electric Vehicle Rechargeable Energy Storage System (RESS)

Safety and Abuse Testing

SAE J-2889: Measurement of Minimum Sound Levels of Passenger Vehicles

SAE J-2894 Part 1: Power Quality Requirements for Plug-In Vehicle Chargers - Requirements

SAE J-2894 Part 2: Power Quality Requirements for Plug-In Vehicle Chargers - Test Methods

SAE J-2907: Power Rating Method for Automotive Electric Propulsion Motor and Power Electronics

Sub-System

SAE J-2908: Power Rating Method for Hybrid-Electric and Battery Electric Vehicle Propulsion

ISO/FDIS 6469-1:2009(E): "Electrically propelled road vehicles - Safety specification - Part 1: On-

board rechargeable energy storage system (RESS)"

ISO/FDIS 6469-2:2009(E): "Electrically propelled road vehicles - Safety specification - Part 2: Vehicle

Operational Safety Means and Protection against Failures"

ISO/CD 6469-3.3: "Electrically propelled road vehicles - Safety specification - Part 3: Protection of

persons against electric shock"

Batteries SAE J-1766: Recommended Practice for Electric and Hybrid Electric Vehicle Battery Systems Crash

Integrity Testing

SAE J-1797: Recommended Practice for Packaging of Electric Vehicle Battery Modules

SAE J-1798: Recommended Practice for Performance Rating of Electric Vehicle Battery Modules

SAE J-2288: Life Cycle Testing of Electric Vehicle Battery Modules

SAE J-2289: Electric-Drive Battery Pack System: Functional Guideline

SAE J-2380: Vibration Testing of Electric Vehicle Batteries

ISO/CD 12405-1: "Electrically propelled road vehicles – Test specification for lithium-ion traction

battery packs and systems- Part 1 "High power applications"

Interface SAE J-1772: SAE Electric Vehicle Conductive Charge Coupler

SAE J-1773: SAE Electric Vehicle Inductively-Coupled Charging

SAE J-1850: Class B Data Communications Network Interface

SAE J-2293 Part 2: Energy Transfer System for EV Part 2: Communications Requirements and

Network Architecture

SAE J-2836 Part 1: Use Cases for Communications between Plug-In Vehicles and the Utility Grid

SAE J-2836 Part 2: Use Cases for Communications between Plug-In Vehicles and the Supply

Equipment (EVSE)

SAE J-2836 Part 3: Use Cases for Communications between Plug-In Vehicles and the Utility grid for

Reverse Flow

SAE J-2847 Part 1: Communications between Plug-In Vehicles and the Utility Grid

SAE J-2847 Part 2: Communication between Plug-in Vehicles and the Supply Equipment (EVSE)

SAE J-2847 Part 3: Communication between Plug-in Vehicles and the Utility Grid for Reverse Power

Flow

Infrastructure SAE J-2293 Part 1: Energy Transfer System for EV Part 1: Functional Requirements and System

Architecture

SAE J-2841: Utility Factor Definitions for Plug-In Hybrid Electric Vehicles Using 2001 U.S. DOT

National Household Travel Survey Data

National Fire Protection Agency (NFPA) NFPA 70 National Electrical Code (NEC) Article 625: Electric

Vehicle Charging System Equipment

National Fire Protection Agency (NFPA) NFPA 70 National Electrical Code (NEC) Article 626:

Electrified Truck Parking Spaces

Source: National Renewable Energy Laboratory (NREL)


3-28

5) Vehicle Classification

3.53 The USA has three kinds of vehicle classification established by the National Highway Traffic Safety Administration (NHTSA), the Federal Highway Administration, and the United States Environmental Protection Agency (US EPA). The NHTSA separates vehicles into classes by the curb weight of the vehicle with standard equipment including the maximum capacity of fuel, oil, coolant, and airconditioning (see Table 3.3.3). The Federal Highway Administration (FHWA) has developed a classification scheme used for automatically calculating road use tolls (see Table 3.3.4). There are two broad categories depending on whether the vehicle carries passengers or commodities. Vehicles that carry commodities are further subdivided by number of axles and number of units, including both power and trailer units. US EPA has developed a classification scheme used to compare fuel economy among similar vehicles. Passenger vehicles are classified based on a vehicle's total interior passenger and cargo volumes (see Table 3.3.5). Trucks are classified based upon their gross vehicle weight rating (GVWR). Heavy duty vehicles are not included within the EPA scheme.

Table 3.3.3 NHTSA Vehicle Classification

NHTSA classification Curb weight

Passenger cars: mini 1,500–1,999 lb (680–907 kg)

Passenger cars: light 2,000–2,499 lb (907–1,134 kg)

Passenger cars: compact 2,500–2,999 lb (1,134–1,360 kg)

Passenger cars: medium 3,000–3,499 lb (1,361–1,587 kg)

Passenger cars: heavy 3,500 lb (1,588 kg) and over

Sport utility vehicles -

Pickup trucks -

Vans -

Source: National Highway Traffic Safety Administration (NHTSA)

Table 3.3.4 FHWA Vehicle Classification

FHWA Classification Definition

Motorcycles All two or three-wheeled motorized vehicles. Typical vehicles in this category have saddle-type seats and

are steered by handlebars rather than steering wheels. This category includes motorcycles, motor

scooters, mopeds, motor-powered bicycles, and three-wheeled motorcycles.

Passenger Cars All sedans, coupes, and station wagons manufactured primarily for the purpose of carrying passengers

and including those passenger cars pulling recreational or other light trailers.

Other Two-Axle, Four-Tire

Single Unit Vehicles

All two-axle, four-tire vehicles, other than passenger cars. Included in this classification are pickups,

panels, vans, and other vehicles such as campers, motor homes, ambulances, hearses, carryalls, and

minibuses. Other two-axle, four-tire single-unit vehicles pulling recreational or other light trailers are

included in this classification.

Buses All vehicles manufactured as traditional passenger-carrying buses with two axles and six tires or three or

more axles. This category includes only traditional buses (including school buses) functioning as

passenger-carrying vehicles. Modified buses should be considered to be a truck and should be

appropriately classified.

Trucks/

Trailer

Two-Axle, Six-Tire,

Single-Unit Truck

All vehicles on a single frame including trucks, camping and recreational vehicles, motor homes, etc.,

with two axles and dual rear wheels.

Three-Axle Single-

Unit Truck

All vehicles on a single frame including trucks, camping and recreational vehicles, motor homes, etc.,

with three axles.

Four or More Axle All trucks on a single frame with four or more axles.



3-29

FHWA Classification Definition

Single-Unit Truck

Four or Fewer Axle

Single-Trailer

All vehicles with four or fewer axles consisting of two units, one of which is a tractor or straight truck

power unit.

Five-Axle Single-

Trailer Trucks

All five-axle vehicles consisting of two units, one of which is a tractor or straight truck power unit.

Six or More Axle

Single-Trailer

Trucks

All vehicles with six or more axles consisting of two units, one of which is a tractor or straight truck power

unit.

Five or fewer Axle

Multi-Trailer Trucks

All vehicles with five or fewer axles consisting of three or more units, one of which is a tractor or straight

truck power unit.

Six-Axle Multi-

Trailer Trucks

All six-axle vehicles consisting of three or more units, one of which is a tractor or straight truck power

unit.

Seven or More Axle

Multi-Trailer Trucks

All vehicles with seven or more axles consisting of three or more units, one of which is a tractor or

straight truck power unit. Source: Federal Highway Administration (FHWA)

Table 3.3.5 US EPA Vehicle Classification

CARS

Class Passenger and Cargo Volume (Cu. Ft.)

Sedans

Two-Seater Any (cars designed to seat only two adults)

Minicompact Less than 85

Subcompact 85 to 99

Compact 100 to 109

Mid-Sized 110 to 119

Large 120 or more

Station

Wagons

Small Less than 130

Mid-Sized 130 to 159

Large 160 or more

TRUCKS

Class Gross Vehicle Weight Rating (GVWR)*

Pickup

Trucks

Small Less than 6,000 lbs.

Standard 6,000 to 8,500 lbs.

Vans Passenger Less than 10,000 lbs.

Cargo Less than 8,500 lbs.

Minivans Less than 8,500 lbs.

SUV Small Less than 6,000 lbs.

Standard 6,000 to 9,999 lbs.

Special Purpose

Vehicles

Less than 8,500 lbs. or less than 10,000, depending on

configuration Source: United States Environmental Protection Agency (US EPA)

3.54 There are vehicles which are not defined in the above classification, such as the neighborhood electric vehicles (NEV)/ low speed vehicles (LSV), and golf carts. The regulations on these vehicles vary by state. Box 3.3.1 shows the case of California.

http://en.wikipedia.org/wiki/Federal_Highway_Administration


3-30

Box 3.3.1 NEV/LSV and Golf Cart On-Road Registration Checklist

1. To register your NEV/LSV or golf cart you may need: an Application for Title or Registration, the out-of-state title or Manufacturer’s Certificate/Statement of Origin, a vehicle verification, and registration fees.

2. Neighborhood Electric Vehicle (NEV) (CVC §§ 385.5 , 21250 )

1) An NEV/LSV is a motor vehicle that has four wheels, within one mile can reach a speed of more than 20 mph but not more than 25 mph on a paved level surface, and has a 17-digit conforming VIN. Only NEVs/LEVs certified to meet Federal Motor Vehicle Safety Standards (FMVSS) can be considered for registration. NEVs/LSVs are motor vehicles requiring a valid California driver's license, registration, and insurance.

Operation of NEVs/LSVs: Dealers must provide buyers of an NEV/LSV with a disclosure statement regarding the operation of the vehicle. The NEV may not be operated on any roadway with a speed limit above 35 mph. NEVs can cross state highways only at controlled intersections. Crossing at uncontrolled intersections is permitted with the approval of the agency responsible for that intersection. NEVs may also cross at intersections that have a higher speed limit of 35 mph, if the crossing begins and ends on a road of 35 mph or less. NEVs can also be operated as a golf cart when operated within a distance one mile or less from a golf course or on roads designated for such operation by ordinance or resolution.

Modified or Altered NEVs/LSVs: If you modify or alter your NEV/LSV to go faster than 25 mph, you will no longer qualify for the relaxed FMVSS established for LSV. Your vehicle will then be required to meet the same federal standards established for passenger vehicles.

Equipment and Safety Requirements: NEVs/LSVs operated or parked on public streets, roads, or highways must meet the FMVSS at all times.

2) Golf Carts: A golf cart is a motor vehicle designed to carry no more than two persons, including the driver, carry golf equipment, have no less than three wheels in contact with the ground, operate at a maximum speed of 15 mph, and weigh no more than 1,300 pounds unladen (empty).

Operation of Golf Carts

Registration is not required if you operate your golf cart on a highway designated for such use by ordinance or resolution within one mile of a golf course. You may not operate on roads with speed zones above 25 mph except by ordinance or resolution by a local authority.

Modified Golf Carts: A golf cart cannot be converted for registration purpose as an NEV/LSV. If you modify your golf cart to go faster than 15 mph or seat more than two persons, the vehicle is considered a regular motor vehicle and must comply with FMVSS for regular passenger vehicles. These standards include additional vehicle equipment, appropriate FMVSS labels, applicable emission standards, and a 17-digit conforming VIN.

Equipment Requirements for On-Road Use: Your golf cart must comply with certain equipment standards established by the California Highway Patrol (CHP) to be registered for on-road use. The equipment requirements are outlined in form CHP 888, Motorcycle, Motor Driven Cycle, and Motorized Bicycle Requirements.

Source: California Department of Motor Vehicle

http://www.dmv.ca.gov/forms/reg/reg343.pdf

http://www.dmv.ca.gov/vr/fees/toc.htm

http://www.dmv.ca.gov/pubs/vctop/d01/vc385_5.htm

http://www.dmv.ca.gov/pubs/vctop/d11/vc21252.htm

http://www.chp.ca.gov/



3-31

3.4 EV Policies and Regulations in China


3.55 China’s Five-Year Plan for National Economic and Social Development (Five-Year National Plan) is prepared every five years since 1953. Since the 8th Five-Year National Plan (1991–1995), the research on EVs has been formally positioned in the Plan, because EV development has important strategic significance in China. The 8th and 9th Five-Year Plans focused on R&D and pilot projects, while in the 10th and 11th Plans, small-scale production and further pilot projects were promoted.

3.56 It is planned that the industrialization of EV business will be realized by the following three steps, as shown in the Specific Plan for EV in the 12th Five-Year National Plan.

(a) Step 1 (2008–2010): New-energy vehicles in the public service sector are deployed in large-scale and medium-scale cities. The “Ten Cities, Thousand Vehicles Program” was initiated in 2009.

(b) Step 2 (2010–2015): The industrialization of hybrid vehicles will be realized. Small-sized EVs as the representative EV will be deployed as a large-scale pilot. Small-scale fuel cell vehicles will be tested in the public service sector. The platform for next-generation “purely electricity-powered vehicles” will be developed.

(c) Step 3 (2015–2020): The large-scale industrialization of “purely electricity-powered vehicles” will be further promoted and the industrialization of next-generation “purely electricity-powered vehicles” will be initiated.

3.57 Despite these plans, the progress of EV deployment has been slower than expected, and air pollution in the cities has increased dramatically. In order to improve the situation, the Chinese government has issued the following statements and plans in 2013:

(a) Opinions of the State Council on Accelerating the Development of Energy-Saving and Environmental Protection Industries: The government is upgrading the environmental sector to the rank of a "key industry," a title that had been reserved for the steel and pharmaceutical industries, as well as biotechnology. Under the new guideline, the sector is expected to earn a massive USD728 billion by 2015, and to grow at twice the rate of the rest of the economy. In the main cities such as Beijing, Shanghai and Guangzhou, 60% of new and replaced public transport vehicles have to be alternative-fuel vehicles. In addition, the government should have a priority to introduce EVs as official government vehicles.

(b) Action Plan for Air Pollution Prevention and Control: The objective of this plan is to improve air quality and reduce the air pollution episodes in China, especially in the three key regions of Jing-Jin-Ji, Yangtze River Delta and Pearl River Delta, for which different targets are set for improvement by 2017. In this plan, the use of alternative fuel vehicles is highly recommended.

(c) Regarding the Continuous Promotion and Application of New-Energy Vehicles for the Years from 2013 to 2015 (Notice): This subsidiary policy for EVs/PHEVs and fuel cell battery vehicles aims to increase efforts on promotion of new-energy vehicle procurement with government agencies, public organizations and public transportation areas. According to the Notice, the central government will provide,


3-32

based on certain technical requirements, up to about USD9,800 for the purchase of an all-electric passenger vehicle and up to about USD81,700 for the purchase of an e-bus. The subsidy payments will be distributed to the manufacturers on a quarterly basis in advance and the subsidies will then be paid by the manufacturers directly to the consumers. The Notice also established the following benchmark requirements for the pilot cities or regions:

(i) From 2013 to 2015, there shall be no less than 10,000 new-energy vehicles added cumulatively in each Large Pilot City or Region, and no less than 5,000 new-energy vehicles added cumulatively in each of other cities or regions;

(ii) No less than 30% of these new-energy vehicles shall be non-local brands;

(iii) The vehicle procurements by the government agencies and public organizations shall favor new-energy vehicles. For new or replacement public transportation vehicles, government agency vehicles, logistic vehicles and waste management vehicles, no less than 30% of them shall be new-energy vehicles;

(iv) The local government shall have issued specific policies and measures of vehicle purchase, public transportation operation, supporting infrastructure construction, and other aspects for new-energy vehicles; and

(v) The pilot cities are subject to an annual inspection and evaluation. Pilot cities which fail to complete the annual promotion objectives will be eliminated from the subsidy program.


3.58 According to the Notice Regarding the Continuous Promotion and Application of New-Energy Vehicles for the years from 2013 to 2015, subsidies for alternative fuel vehicles will be provided (see Table 3.4.1).

Table 3.4.1 Subsidies for EVs/PHEVs in China

Type of Vehicle Specification Subsidy (USD)

EV Range of over 250km 9,802

Range of over 150km 8,168

Range of over 80km 5,718

E-bus EV with over 50m in length 81,680

PHEV with over 50m in length 40,840

EV with over 8m in length 65,344

EV with over 6m in length 49,008

Source: Regarding the Continuous Promotion and Application of New-Energy Vehicles for the years from 2013 to 2015 (Notice)

3.59 Moreover, according to the Energy-Saving and New-Energy Vehicle Development Plan (2012-2020) approved by the State Council in April 2012, consumers purchasing EVs/PHEVs will be exempt from the vehicle purchase tax until 2020. This will provide important savings for the consumer. For example, the market price of a BYD E6 electric vehicle is RMB369,800; with the tax cut, buyers will be able to save RMB31,000 on the purchase tax, or 8.5% of the total costs.

3.60 This Plan also provides a series of encouraging policies to retailers and major component suppliers for electric vehicles. The value-added tax rate for these companies will be reduced to 13%, dropping 4% from the previous level.



3-33

3) EV-Related Associations

3.61 One of the biggest associations related to EVs is the China Electric Vehicle Association (CEVA), which is a national non-government organization composed voluntarily by EV industry and public institutions and workers. It is a social intermediary organization of the EV industry. Another one is the Association of the Electric Vehicle Industry, an association composed of 16 of the country's state-owned companies.

(a) China Electric Vehicle Association (CEVA): The objectives of CEVA is to focus on economic development; exert great efforts to contribute to the national economy and EV industry progress; serve EV industry enterprises and workers wholeheartedly; provide information to government, membership, enterprises and other sectors of social circles; and play the role as bridge between government and enterprises. Its main activities are to explore professional development strategies, legal regulations and managerial system; to put forward related suggestions to government and relevant lead agencies; to promote horizontal cooperation between member units to accelerate win-win situation; to explore professional, theoretical and practical issues; to promote technical progress, investigate on domestic EV technology and its marketing trends; to compile business and technological information; to organize training for EV talents; and to hold professional exhibitions both at home and abroad.

The organizational structure of CEVA is shown in Figure 3.4.1 below.

Source: China Electric Vehicle Association (CEVA)

Figure 3.4.1 Organizational Structure of CEVA

(b) Association of the Electric Vehicle Industry: This association works on setting unified standards for EVs and hopes to improve upon core technologies to make the nation's EVs more competitive in the global marketplace. Its initial goal is to build an effective information-sharing system that allows automakers, battery producers, governments, and other manufacturers to freely communicate about EV advancements without the risk of leaking vital information to outside companies or countries.

CEVA• Consultants• Honorary Chairman• Chairman• Vice-Chairman• Chief Director• Director• Expert Committee• Professional

Committee

Secretary

Professional Committee

Management

Institutions

• Integrated Office• Academic Department• Finance Department

• International Standards Department

• Training• Human Resources• Exhibition Department• Translation

Department• China Electric Vehicle

Almanac

• Battery• Chargers• Motor• Controller


3-34


3.62 According to the technical conditions on EVs, the technical standards on EV performance became stricter than the former standards on EVs. The standard indices, except the cruising distance with full charge, are similar to that of conventional vehicles. In particular, standards on output performance, safety and stability were set clearly. For example, the maximum speed is more than 75 km/h, the cruising distance with full charge is more than 160 km, and energy consumption is less than 16 kW/h.

3.63 In addition, the Chinese Government has promulgated 36 standard items for EVs (excluding 6 items for electric motorcycles), including35 items of national standards and 7 items of standards of auto industry; 11 items for purely electric autos, 6 for hybrid power autos, 4 for fuel battery autos, 8 for power battery, and 2 for electric autos and controllers; and 4 items for energy supply and charging (see Table 3.4.2).

3.64 Some 12 items have passed the review of the Standard Committee and are waiting for application and promulgation, including6 items of national standards, and 6 auto industry standards;1 item of modification standard, and 11 items of newly-formulated standards.

3.65 Moreover, 37 items are being planned for urgent modification in the same industry. These mainly include the safety requirements for low-speed electric autos and electric autos (modified), hybrid power auto discharge and energy consumption (formulation and modification), hybrid power system assembly, the modification of QC/T 741-744 power battery standards (or transferred to international ones), the series standards of power battery system grades (performance, safety, reliability, etc.), and the relevant charging standards.

Table 3.4.2 List of Published Standards of Electric Automobiles in China (36 Items)

Category Standard Number Name of Standard

Purely

electric

GB/T 18384.1-2001 Part One of Safety Requirements of Electric Automobiles: Vehicle-borne Energy Storing Device

GB/T 18384.2-2001 Part Two of Safety Requirements of Electric Automobiles: Function Safety and Failure Emergency

Protection

GB/T 18384.3-2001 Part Three of Safety Requirements of Electric Automobiles: Personnel Electric Shock Emergency

Protection

GB/T 4094.2-2005 Marks of Controllers, Indicators and Signal Devices of Electric Automobiles

GB/T 19596-2004 Terminology of Electric Automobiles

GB/T 18385-2005 The Test Methods of the Power Performance of Electric Automobiles

GB/T 18386-2005 The Test Methods of Energy Consumption Rate and Driving Range of Electric Automobiles

GB/T 18387-2008 The Limit Value and Measurement Methods of the Electromagnetic Field Radiation Strength of

Electric Vehicles Broadband 9kHz - 30MHz

GB/T 18388-2005 The Type Approval Test Procedures of Electric Automobiles

GB/T 24552-2009 The Performance Requirements and Test Methods of Defrost and Defog System of Wind Window

Glass of Electric Automobiles

GB/T 19836-2005 Instruments for Electric Automobiles

Hybrid

power

GB/T 19751-2005 The Safety Requirements of Hybrid Power Electric Automobiles

GB/T 19750-2005 Type Approval Test Procedures of Hybrid Power Electric Automobiles

GB/T 19752-2005 The Testing Method of Power Performance of Hybrid Power Electric Automobiles

GB/T 19753-2005 The Testing Methods of the Energy Consumption of Light-duty Hybrid Power Electric Automobiles

GB/T 19754-2005 The Testing Methods of the Energy Consumption of Heavy-duty Hybrid Power Electric Automobiles

GB/T 19755-2005 The Measuring Methods of Pollutant Emission of Light-duty Hybrid Power Electric Automobiles

Fuel battery

automobiles

GB/T 24554-2009 Performance Test Methods of Fuel Battery Engine

GB/T 24549-2009 Safety Requirements of Fuel Battery Automobiles



3-35

Category Standard Number Name of Standard

GB/T 24548-2009 Terminology of Finished Fuel Battery Automobiles

QC/T 816-2009 Hydrogenation Automobile Technical Conditions

Motor and

control

system

GB/T 18488.1-2006 Part One of Motors and Controllers of Electric Automobiles: Technical Conditions

GB/T 18488.2-2006 Part Two of Motors and Controllers of Electric Automobiles: Testing Methods

GB/T 24347-2009 Electric Automobiles DC/DC Convertors

Power

supply and

charging

GB/T 18487.1-2001 General Requirements of Electric Vehicles Transmission Charging System

GB/T 18487.2-2001 The Connection Requirements of Electric Vehicles and AC/DC Power Supply of Electric Vehicles

Transmission Charging System

GB/T 18487.3-2001 Electric Vehicles AC/DC Charging Machine (Station) of Electric Vehicles Transmission Charging

System

GB/T 20234-2006 Universal Requirements of Plugs, Sockets, Vehicle Coupler and Vehicle Jack for Electric Vehicles

Transmission Charging Source: Analysis of Europe/German and Chinese Regulations Regarding Electric Vehicles Infrastructure for Road Traffic (GCSFP, 2010)


3.66 New standards have been introduced in China since 2005. The vehicle classification under the new standards is shown in Table 3.4.3 below.

Table 3.4.3 Vehicle Classification in China

Type Size Definition

Car Basic cars (including

MPVs and SUVs)

Semi-cars and Light Buses

Mini cars Mini Buses

Commercial Cars Unfinished Trucks/Buses

Trucks Mini Trucks GVW is 1.8 tons or less

Light Trucks GVW is from over 1.8 tons to less than 6 tons

Medium Trucks GVW is from over 6 tons to less than 14 tons

Heavy Trucks GVW is over 14 tons

Buses Small Buses Overall length is from over 3.5m to less than 7m

Medium Buses L is from over 7m to less than 10m

Large Buses L is over 10m

Source: Marklines


3-36

3.5 EV Policies and Regulations in ASEAN


3.67 When it comes to EV manufacturing, ASEAN countries are still in the primitive stage. But when it comes to deployment or utilization, these countries are not far behind as many have begun to formulate their respective strategies for introducing EVs. The EV adoption strategies in each country vary according to: (i) economic development situation, (ii) presence of vehicle industries in the country, (iii) energy resource and supply conditions, and (iv) policy support for technologies and funding by foreign countries. (a) Indonesia: In May 2011, the Ministry of Industry introduced the Low-Cost and Green

Car Program to support the national manufacturing industry and establish Indonesia as a major production hub. This program aims to develop industrial clusters by inviting foreign auto manufacturers. However, the participants to this program need to have 60-80% of local parts procurement rate. In 2011, Presidential Regulation of the Republic of Indonesia No. 61 Year 2011 on the National Action Plan for Greenhouse Gas Emissions Reduction was issued, encouraging the use of EVs as a means to reduce GHG emissions. The Ministry of Science and Technology is the lead agency for EVs, yet there are no related regulations and laws.

(b) Malaysia: The Ministry of Energy, Green Technology, and Water (KeTTHa) was tasked to draw up a roadmap to develop the charging infrastructure for electric vehicles. In brief, the strategic action plan covers the following (see Figure 3.5.1):

(i) Formation of the EV Steering Committee;

(ii) Establishing standards for electric vehicle supply equipment (Socket-to-Socket);

(iii) Regulation for governing EV charging infrastructure provider;

(iv) Regulation governing the roadworthiness of electric vehicle;

(v) Incentives for EV charging infrastructure provider;

(vi) Incentives for EV owners and users;

(vii) Ensuring grid, supply and utility readiness;

(viii) Pilot demonstration projects;

(ix) Public awareness and education; and

(x) Research and development in EV technology.

Source: Electric Vehicle Roadmap for Malaysia

Figure 3.5.1 Seven Key Areas for EV Masterplan of Malaysia



3-37

(c) Philippines: Unlike the other countries in the region, the introduction of EVs in the Philippines started as disparate private initiatives at the local level without the benefit of a national policy. The action from the government is a program of the Department of Energy to replace the more than 200,000 ICE tricycles in the country with e-trikes. The program was launched in January 2012, supported by the Asian Development Bank (ADB) which arranged an initial funding of USD100 million from the Clean Technology Fund.

(d) Singapore: The EV market can contribute to protecting the environment, so the Singapore Government plans to strengthen its cooperation with private enterprises to put EVs into practical use. The Economic Development Board (EDB) will develop a subsidy system and charging infrastructure in cooperation with Energy Market Authority (EMA) and Land Transport Authority (LTA). Unlike the Philippines, the approach of Singapore is more top-down rather than bottom-up. Also, it is focused on private, rather than public, transport.

(e) Thailand: Thailand is yet to pursue an EV policy. Understandably so because it has abundant natural gas. Converting existing cars to natural gas is, therefore, preferred as it leads to lower CO2 emissions. As the current hub of car manufacturing in the ASEAN region, Thailand aims to also become the center of production of EVs for the Southeast Asian market. Several companies have already rolled out three-wheeled EVs.

(f) Vietnam: The national policy of Vietnam includes the development of HEV and low-emission transport. The government focuses on the public transport system rather than private vehicles. For private vehicles, the government issues only technical limitations. Furthermore, the focus of efforts is more on bio-fuel rather than EVs.


3.68 Only a few ASEAN countries have or are discussing incentive policies for EVs/PHEVs. These are summarized in Table 3.5.1).

Table 3.5.1 Incentives for EVs/PHEVs in ASEAN

Country Tax Incentives

Indonesia The luxury tax on low-emission and high-fuel-efficiency vehicles will be reduced up to 25%

within2013under the Low-cost Green Car program.

Malaysia Allows 100% foreign ownership in the manufacture of HVs/EVs, grant of tax exemption for 10 years,

provision of investment tax allowance (ITA) and subsidy for R&D

100% exemption from tariff and excise taxes on completed HVs/EVs (less than 2,000 cc) by the end of

2015.

Philippines The Philippines Senate passed the Alternative Fuel Vehicle Act in the first quarter of 2013. This Act is

expected to lower the cost of EVs and HEVs by offering tax exemption schemes. The new law will

extend fiscal and non-fiscal incentives for the importation and manufacture of EVs, HEVs and other

alternative fuel vehicles.

Singapore Carbon Emissions-based Vehicle Scheme (CEVS): New cars, taxis and newly imported used cars with

low-carbon emissions (i.e., less than or equal to 160g CO2/km) will qualify for rebates. This rebate will

be given out in the form of an offset against the vehicle’s Additional Registration Fee (ARF) payable.

Rebates are between USD5,000 and USD20,000 for cars and between USD7,500 and USD30,000 for

taxis depending on the carbon emission.

Source: JICA Study Team compiled from several information sources


3-38


3.69 In ASEAN, only Malaysia and the Philippines have EV associations. In other countries, it is the automobile associations and other organizations that participate in EV projects.

(a) Malaysia Electric Vehicle Association (MEVA): MEVA is an organization which aims to grow the EV industry in Malaysia by unifying and strengthening public-private partnerships in realizing Malaysia’ vision to become a green technology hub.

(b) Electric Vehicle Association of the Philippines (eVAP): eVAP envisions a nation where government and society promote, encourage and support the use of EVs to develop a transportation landscape that is one with the environment, ecologically and economically. To attain this vision, eVAP aims to educate the public on environmental awareness, and the economic and ecological benefits of electric vehicles. By partnering with government bodies, eVAP aims to help create and implement legislation to support the use of EVs. With support of businesses and communities, eVAP aims to make EVs accessible and economically sustainable for all Filipinos, drivers and commuters alike.

4) EV-Related Standards and Guidelines

3.70 EVs are still new in ASEAN, but some countries have already started discussing EV-related standards. In Malaysia, the Ministry of Energy, Green Technology and Water is working on introducing standards for companies that want to set up charging stations for EVs in the future. In the Philippines, the Department of Trade and Industry-Bureau of Product Standards in cooperation with other concerned agencies developed the following seven sets of Philippine National Standards for Electric Vehicles:

(i) PNS ISO 6469-3:2008 Electric road vehicles – Safety specifications - Part 3: Protection of persons against electric hazards;

(ii) PNS ISO 6469-2:2008 Electric road vehicles - Safety specifications - Part 2: Functional safety means and protection against failures;

(iii) PNS ISO 6469-1:2008 Electric road vehicles - Safety specifications - Part 1: On-board electrical energy storage;

(iv) PNS ISO 8713:2008 Electric road vehicles - Vocabulary ISO published in 2005;

(v) PNS ISO 8714:2008 Electric road vehicles - Reference energy consumption and range -Test Procedures for passenger cars and light commercial vehicles;

(vi) PNS ISO 8715:2008 Electric road vehicles - Road operating characteristics; and

(vii) PNS ISO 23274:2008 Hybrid-electric road vehicles - Exhaust emissions and fuel consumption measurements - Non externally chargeable vehicles.


Chapter 4 Institutional Framework for EV/PHEV Promotion in Lao PDR

4-1

4 INSTITUTIONAL FRAMEWORK FOR EV/PHEV PROMOTION IN LAO PDR

4.1 General

4.1 In order to promote EV/PHEV adequately in line with EST Strategy, there is an urgent need to establish a proper institutional framework with regard to vehicles, ownership and usage, supporting infrastructure, organizations, among others.

4.2 There are several regulations related to vehicles and charging facilities in Lao PDR (Table 4.1.1). However, they need to be modified to apply for EVs, and new regulations should be formulated. The first step for Lao PDR is to identify EVs as a part of vehicles, so that the existing regulations can cover EV importation, registration, and so on.

4.3 In addition to establishment of regulations and standards for EVs and charging infrastructures, promotion policies are also important, especially tax preferential treatment on EVs.

Table 4.1.1 EV Related Regulations in Lao PDR

Subject Regulations in Lao PDR Applicability on EV Promotion

Vehicle Manufacture Law on Land Traffic

Regulation on Technical Standards and accessories of vehicles that are authorized for import for registering and assembling for using in Lao PDR

A motorized vehicle is defined vehicles propelled by engine.

Importation Law on Land Traffic

Regulation on Technical Standards and accessories of vehicles that are authorized for import for registering and assembling for using in Lao PDR

Decree of the President of the Lao PDR on the Promulgation of the Amended Customs Law

Tariff Nomenclature of Lao PDR based on ASEAN Harmonized Tariff Nomenclature


Vehicles are categorized with displacement size (cc)

Acquisition/ Registration

Law on Land Traffic

Vehicle Technical Certification

Decree of the President of the Lao PDR on the Promulgation of the Amended Tax Law


Vehicles are categorized with displacement size (cc) except motorcycle

Usage Driver’s license

Law on Land Traffic A motorized vehicle is defined vehicles propelled by engine.

Safety Law on Land Traffic A motorized vehicle is defined vehicles

propelled by engine.

Inspection Law on Land Traffic A motorized vehicle is defined vehicles

propelled by engine.

Disposal/Recycle Environmental Protection Law Including only general conditions for waste

disposal

EV charging facilities Electricity Law Including only general conditions for installation and determination of electricity equipment standard

No regulations on electric tariff for charging EVs

Source: MPWT, Lao Government Portal Site. .

The Preliminary Works for the Technical Cooperation on Low-Emission Transport System FINAL REPORT Chapter 4 Institutional Framework for EV/PHEV Promotion in Lao PDR

4-2

4.2 Regulatory Framework on EV

1) Context

4.4 Any EVs should be viewed as no different from ICE motor vehicles, except for its motive power. They are mechanized (transport) vehicles under the purview of Article 34 of the amended Law on Land Traffic. Therefore, EVs must comply with the amended Law on Land Traffic (No.36/NA12December2012) which requires vehicle registration and driver licensing.

4.5 There are no detailed technical regulations in Lao PDR about motor vehicle manufacture, construction and accessories. What the country has is type approval and certification from international bodies and country of origins. [see Ministry Order MCPC No. 4312]. This is practical, since Lao PDR cannot afford to set up test laboratories and certification bodies anyway. Accordingly, it would be premature, if not presumptuous, to formulate technical regulations on EVs - much more rigorous than what currently exists for ICE vehicles.

4.6 Similarly, as a general rule, all EVs imported into Lao PDR must comply with the same certification alluded to under item 4.2. Or under conventions it is signatory to (e.g., UN Mutual Recognition Agreement, WP29).

4.7 Electric vehicles (EVs) have come to Lao PDR, despite (and maybe, because of) the absence of any regulations. For example; (i) The Vientiane Capital State Bus Enterprise (VCSBE) has operated 13 e-minibuses for almost a year, with mixed results; (ii) Two outlets in Vientiane are selling electric motorcycles (E-MC) of various models; (iii) An undetermined number of e-minibus have been fielded by a private shopping mall in Savannakhet; and, (iv) Savannakhet has given incentives to a foreign firm to operate e-minibuses in the city.

4.8 While there is general approval from government officials about the benefits of EVs, official guidelines and rules have yet to be issued on the entry and use of these vehicles. It is known that E-MCs cannot be registered, yet are running on public roads despite not having license plates. If the Lao government do nothing, these vehicles would proliferate without complying with the safety standards required for vehicle operations on Lao roads. With bad experience, the public may turn against future EVs thus making the shift to green transport even more difficult. In this regard, Lao PDR could learn from what happened in China where it was reported that more than 100 million E-MCs are operating without license. Apparently, the safety standards that came afterwards were stringent and therefore, post-compliance was simply not possible.

4.9 By their very nature and form factor, any type of electric vehicles (EV), including hydrogen-powered, hybrid vehicles (PHEV), and other Zero Emission Vehicles (ZEV) are transport vehicles. Therefore, to be able to operate on Lao roads, they have to comply with the amended Law on Land Traffic (12-December 2012), the amended Law on Land Transport (12-December 2012) and the Agreement on the National Environmental Standard (see Figure 4.2.1).

4.10 The question is can they meet the requirements of two aforesaid laws and the regulations flowing from them? These laws were promulgated at a time when the number of EVs and ZEVs were still small and therefore were not part of its scope and coverage.



4-3

Source: JICA Study Team complied from several sources

Figure 4.2.1 Laws and Regulations Related to Motor Vehicles in Lao PDR

2) Current Legal Framework

4.11 As a minimum requirement to use EVs in Lao PDR, EV should be registered as a vehicle, and driver should have driver’s license. In order to register EV as a vehicle, EVs should also pass technical standards and have a physical inspection for import. In developed countries, EVs are generally registered as no different from ICE vehicles while EVs have some specific technical standards (see Table 4.2.2 and Chapter 3 for more detail of the situation in developed countries).

Table 4.2.1 Identified Problems and Issues with Regards to EVs, PHEVs

Step Check Item Situation of Other Countries1) Basic Test Availability of EV registration

Required driver’s license for EV

Definition of vehicle is defined as travel means with wheel(s). EVs is automatically subjected to vehicle registration (Japan).

Vehicle categories include EVs, so that EVs are also registered (Europe). Vehicles are categorized with vehicle type or curb weight, so that EVs are

also registered (USA). 2nd Test Required technical

standards for EVs Safety standard for EV/PHEV includes standards related to storage

battery modules, electric shocks, etc. (Japan) Standards related to safety, batteries, etc. (Europe) Standards for EV supply equipment, safety, battery system, minimum

sound, etc. (USA) 3rd Test Required physical

inspection for Importation Preferential Handling procedure system (Japan)


(a) The Basic Test

4.12 A motor vehicle– whether ICE or EV– must first be registered with the Vehicle Registration and Inspection Management (VRIM) of the City, and issued a license plate by the Department of Traffic Police (DTP). Its driver must also possess a license.

Construction & Maintenance of Roads

Road Law (04/NA,1999) Department of Roads (DOR) ROADS

DRIVERS, PEDESTRIANS & VEHICLE USAGE

VEHICLE MANUFACTURE & CONSTRUCTION

Traffic Related

Accident Victims

Traffic Police Department (TPD)

Law on Land Traffic (12/PO, 2000)

Safety Assurance

Pollution Control

Energy Conservation

Ministry Order 4312 (2002) on technical standards of vehicles

Agreement on the National Environmental Standard

No specific law; policy to reduce reliance on fossil fuel importation

Department of Transport (DOT)

Ministry of Natural Resources and Environment (MONRE)

Compulsory Insurance per Art.17 of Law on Land Transport

Ministry of Finance (MOF)

Relevant Laws and Regulations Competent Authorities

Transport Services Law on Land Transport (35/PO,1997)

Department of Electricity (DOE)


4-4

4.13 Article 34, 35and 38 of the amended Law on Land Traffic states:

Article 34 Types of Vehicle: There are two types of vehicle in Lao PDR, motor vehicles and Non- motor vehicles.

- Motor vehicles include two-wheel motors, three-wheel motors, four-wheel or more motors and also all heavy trucks operating by engines.

- Non- motor vehicles including two-tire bicycles, three-tire bicycles, and carts.

“Article 35 Standard of Vehicles: All type of vehicle Imported, manufactured and unified vehicles require registering and using in Lao PDR must be full composition as manufacturer with international standards, left steering wheel with acceptable qualities by Ministry of Public Work and Transport and applicable with international treaty where covers Laos as a member.”

“Article 38 General Regulations: All road users have to strictly follow land traffic rules, have license plates, documentation and insurance in accordance with Article 42 of the amended Law on Land Transport. For tractors or 2-3 wheel motors have to have front lights and rear lights brakes. The reflected material has to be equipped at the back and side of tractors.”

4.14 It is clear that EV and ZEV will meet the broad parameters of a vehicle stated above, except for the non-existence of engines that will naturally equate to compliance with noise and emission standards. None of the other provisions of the Law need re-visiting or amendments in order for EV and ZEV to be legal in Laos PDR. But first, they must be declared and recognized as transport vehicles.

(b) The 2nd Test

4.15 In accordance with the amended Law on Land Traffic, the then Ministry of Communications, Transport, Posts and Construction (former MPWT) issued Order No. 4312 in November 2002 to define the technical standards. Article 2 provides that:

“A vehicle specified in this Regulation means vehicle propelled by engine including transport vehicle and heavy motor vehicle of every size and type that have structural composition in conformity with manufacturing’s technical standards, and have conditions and technical standards as specified in this Regulation.”

4.16 The Order also stipulates the power, size, and gross vehicle weight (GVW) of the vehicles that can be imported and used on Lao Roads. The GVW regulation is contained in a separate order No. 849/CTPC, dated 05/03/2002. There is no doubt that the GVW of EVs and PHEVs will meet the restrictions on weights, considering they were designed from the outset to be as light as possible. Also, any 4-wheel EVs and PHEVs can easily meet the criteria on power and size.

4.17 The regulation, however, contains ambiguity with regards to 2-wheel and 3-wheel vehicles. Based on Article 3 of MCTPC Order 4312, motor tricycles and Jambo must not exceed 250cc, while Tuktuk must not exceed 650cc. EVs have no cc ratings, and can be logically interpreted to have zero cc (which is below 250cc and 650cc).

4.18 However, the intent of the regulation on engine displacements will be circumvented. The remedy is to apply equivalent horsepower (HP) and electric power ratings for the engine displacements as measured in cubic centimeters (cc). According to



4-5

UNECE, an ICE motorbike of 125cc can be equivalent to a 15 HP or 11 kw motor as maximum continuous rated power. The upper limit could then be set to, say 35 kw1 for Tuktuk. Either that, or simply classify E-MC as compliant.

4.19 Fortunately, amending the regulations governing MCs can be done without prior National Assembly approval. It can be done by a simple order from the Minister of MPWT.

4.20 Another relevant provision, contained in Article 6 of MCTPC-4312, requires that vehicle importers must provide information on "registration number, engine number, and chassis number." EVs and PHEVs cannot be exempted from this provision; otherwise there will be problems during registration. Without engine number, the EVs could not be registered as vehicles in accordance with the amended Law on Land Traffic. This problem has occurred before in other countries.

(c) The 3rd Test

4.21 In theory, all new vehicles to be imported must pass the physical inspection by officials of the DOT (in particular, its Division of Vehicle Machinery and Equipment Management). That is of course impossible, given the number of vehicles going through the border or being imported by car dealers. A prior permit to import is required from the same agency (as well as an import permit from Ministry of Commerce), who is supposed to review the vehicle specifications against Lao regulations and standards. In practice, Lao PDR - as in many developing countries - is incapable to do so. It does not have detailed technical standards for motor vehicles on the same details and rigors as those from SAE of USA or Japan, or WP29/1045 of UNECE. The Lao government does not have the knowhow or resources to set up a special testing laboratory, nor issue more detailed regulations for EV or PHEV, when the same are non-existent for regular ICE vehicles.

4.22 Also, Lao PDR is not in a position to define the technical standards because the various technologies on EV are still evolving and have yet to reach maturity. Premature adoption of standards could lock the country in the wrong direction or constrained by obsolete technology. A comprehensive set could indirectly favor one supplier (or country) over another. Not being in the forefront of EV technology developments, Lao cannot lead or set the pace.

4.23 The way forward can also be found in Ministry Order 4312, which implicitly recognizes standards of manufacture from the country of origin. This is apparent from such phrases as "no modification of original structure from manufacture, or compliant with the technical standards of the manufacture." This is consistent with Article 35 of the amended Law on Land Traffic, which states:

4.24 "All type of vehicle Imported, manufactured and unified vehicles require registering and using in Lao PDR must be full composition as manufacturer with international standards, left steering wheel with acceptable qualities by Ministry of Public Work and Transport and applicable with international treaty where covers Laos as a member."

4.25 In short, Lao PDR relies on the standards of original manufacturers in the case of ICE vehicles. It can also follow the same approach when it comes to EV. The most convenient and practical way for Lao PDR is to accede to international conventions on

1 Maximum continuous rated power for medium-performance motorcycle under UNECE.


4-6

harmonization of vehicle standards, i.e., recognize internationally-accepted certification system. Setting up its own national standards is not justified under the circumstances. That means that if an EV has passed the standards of say Japan, China, USA, or Europe, then the certificate shall be accepted as valid also in Lao PDR - unless provided otherwise under the Law on Land Traffic. Recognizing international certification can be considered as part of the Geneva Convention on Road Traffic to which Lao PDR is a signatory.

4.26 This is not new for Lao PDR. It has participated in several Asian Government-Industry meetings toward the Realization of Mutual Recognition of Whole Vehicle Type Approvals under UNECE Framework. More significantly, it hosted a Roundtable on UNECE Global Technical Regulations in Vientiane on 4-August 2008.

4.27 For all intents and purposes, Lao PDR follows international convention on vehicle standards. Unfortunately, there is none yet on EVs and PHEVs that can qualify as global standards to which Lao authorities can refer to.

4.28 The foregoing "3 tests of applicability of existing laws and regulations" to EVs are not sequential tests but several filters as illustrated in the following chart:

Table 4.2.2 Applicability of Existing Laws and Regulations on 3 Tests

Vehicle Body and Devices for Safety

and Emissions

Article 37 requires that vehicle repair must assure safety

Motive Power, Vehicle Size and Weights

Article 2 of MO#4312: re vehicle propelled by engines;

Order 849/CTPC re power, size and vehicle weights;

Article 6 of MO#4312 re vehicle identification number

Rules on Importation of Vehicles Article 35 of Law on Land Traffic requires vehicles to be

imported to comply with the international standards, left

steering wheel with acceptable qualities by Ministry of

Public Work and Transport and applicable with

international treaty where covers Laos as a member.


Table 4.2.3 Identified Problems and Issues with Regards to EVs, PHEVs

Scope Problem Remedial Measures

Basic Criterion EVs have no engines Instruction to low-level officials in the registration chain that

exhaust pipes are not the primary consideration but the

emission or noise levels. Therefore, all EVs will

automatically be compliant

2nd Criterion 2-wheel and 3-wheel EVs cannot be

registered, since they have no

engines defined by CCs

Amend Article 3 of MO#4312 by adding electric power

equivalents for CC categories of ICE bikes

3rd Criterion Standard of manufactures may differ

from one country to another

Stipulate through Ministry orders or memoranda which

international standards the imported vehicle must comply,

say UNECE


3) A Practical Option for Lao

4.29 There are already EVs of various types on Lao roads, despite the absence of any regulations. This phenomenon is also happening in other countries. That is good and bad. It means private businesses see EVs as a promising opportunity and are willing to take



4-7

risks. On the other hand, it could turn the public against EVs in case of bad experiences.

4.30 To avoid costly impacts and preserve the future for EVs, the MPWT can issue an order stipulating the following:

(i) Classify EVs as vehicles that must comply with the amended Law on Land Traffic and Land Transport;

(ii) EVs to be imported must have as a minimum, the Vehicle Identification Number (VIN) and chassis number, as a requirement for registration and license plate;

(iii) Compliant to the technical standards of manufacture in their country of original manufacture, evidenced by a Certificate of Conformity from reputable certification bodies;

4.31 Such an order may look like Box 4.2.1. And because of the ambiguity of existing regulations, another order should be promulgated specifically on motorcycles plus a short list of restrictions or prohibitions.

4.32 The type-approval process or certification has become a common practice. It minimizes the administrative costs of approval on the correct assumption that vehicles of the same make but different colors are the same. Hence, every unit need not undergo evaluation on technical grounds. The European Union (EU) has harmonized its certification process for vehicles, and so with other countries. An example of a Certificate of Conformity is shown on Box 4.2.2. A country that has no laboratory or capability for issuing such a certificate can rely on other countries' system. Lao PDR has relied on such a default mechanism for ICE vehicles. It should follow the same for EVs.

4.33 EVs are already being introduced in Lao PDR as a small scale project or individual private business. However, there is no comprehensive approach to promote EVs/PHEVs. In order to promote EV/PHEVs as a national policy, the public sector needs an opportunity to evaluate how EVs/PHEVs can work in the society and what kind of institutional system is required. The private sector needs an opportunity to test their EV/PHEVs technically and to assess the demand of EV/PHEVs. Latter can happen if minimum obstacles are imposed - nothing more rigorous than what currently applies to ICE vehicles.

4.34 The Law on Environmental Protection (09/PO, 1999) is often cited as another legal hurdle which EVs would pass with flying colors. However, this law has nothing to do about motor vehicles. It is not raised as an obstacle or filter in the permitting process for ICE vehicles. It would therefore be unnecessary (and unfair) to require EVs to go through its procedures. Similarly, the Agreement on the National Environmental Standard (No. 2734/PMO. WREA) is also not an obstacle for EVs, because EVs does not have emission gas and noise.


4-8

Box 4.2.1 Draft MPWT Order on Low-emission Vehicles

LAO PEOPLE’S DEMOCRATIC REPUBLIC

Peace Independence Democracy Unity Prosperity

Ministry of Public Works and Transport No.___________ Date:__________

REGULATION On Technical Standards and Accessories of Electric, Hybrid, and Low Emission Vehicles That Maybe Authorized for Import, Registration, Assembly or Use in Lao PDR Roads

Pursuant to the Law on Road Transport; Pursuant to the Law on Road Traffic; Pursuant to the Decree on Organization and Activities of the Ministry of Public Works and Transport, No. ___ dated

__/__/____. The Minister of Public Works and Transport hereby issues the following:

Article 1 Policy Statement It is the policy of the Lao PDR to promote and encourage environmentally sustainable transport that will also reduce the country’s dependency on imported petroleum. Accordingly, the growth of motorization in the country shall be pursued with increasing proportion of low and zero emission vehicles.

Article 2 Objectives This regulation is issued to define conditions and technical standards of Low and Zero Emission Vehicles that maybe authorized to be imported for eventual registration and use in Lao PDR, including the import of associated components, accessories and devices for purpose of assembling the same in compliance with the relevant Laws and Regulations of Lao PDR. This regulation shall be used as a reference by relevant authorities in administering the import of such items and their subsequent utilization within the territory of the country.

Article 3 Definitions 1) A low emission vehicle means a mechanized vehicle for transport whose emission is compliant with Euro IV standards or better, and

capable of a minimum 25 kilometers distance on one (1) litre of fuel; 2) An electric vehicle (EV) is a zero emission vehicle when it is propelled solely by rechargeable batteries; 3) A hybrid is a low emission vehicle that has dual power system of rechargeable batteries and an engine fuelled by flammable fuel.

Article 4 Applicability of Ministry Order No. 4312 Any vehicle - with two, three, or four wheels - that fit the above definitions shall be considered as mechanized vehicle that must conform to the provisions of Ministry Order No. 4312, dated 11/11/2002.

Article 5 Technical Standards Parity To protect the general public, all mechanized vehicles imported into, or assembled in, Lao PDR must be compliant with the applicable technical standards in the original country of origin, or internationally-recognized standards such as those issued by the Society of Automotive Engineers of USA, Society of Engineers of Japan, and/or the Resolution on the Construction of Vehicles under WP29 of the United Nations Economic and Social Council; Provided, they are not inconsistent with the Law on Road Traffic; Provided, they are required to have the vehicle identification number (VIN) and chassis number for registration and license plate; and Provided further, that the same type of vehicles have been or are licensed to operate in the roads of the originating country. This shall be evidenced by a Certificate of Conformity together with the original manufacturer’s authorization for the sale or distribution of the said vehicles in Lao PDR.

Article 6 Power and Size of Vehicles Section II, Article 3, of Lao PDR No. 4312/MCPTC is hereby amended to read as follows: “Various types of transport vehicles being authorized for import and use in Lao PDR shall have the power and size as follows:

1. Motorcycle with two wheels having engine power not exceeding 250 cc, or electric power not exceeding 8 kilowatts. 2. Motorcycle converted or retrofitted into 3 wheels, shall have a minimum power of 250 cc, or 10hp, or 8kw; but not exceeding

650 cc or 160hp or 20kilowatt. 3. Car, Pick up, Jeep, Mini bus, Bus, Rigid truck having size not exceeding 12 wheels, trailer: dimension (length, height and

width ) in accordance with the technical standards of manufacturer without modification; 4. The width of various types of vehicle in item 3 above shall not exceed 2.50 meters.”

Article 7 Exclusion Bicycles equipped with battery-powered electric motors, otherwise known as mopeds, are excluded from registration and licensing requirements under Ministry Order 4312, provided its maximum speed does not exceed 30 kilometers per hour and its motor rating does exceed 200 watt.

Article 8 Effectivity This regulation shall take effect two weeks after publication in the official gazette. Any rules and regulations that are otherwise inconsistent with, or in contradiction herewith, shall be deemed to be repealed.

Minister Seal and Signature SommadPholsena




4-9

Box 4.2.2Example of a Vehicle Compliance Certificate

Source: NZ Transport Authority


4-10

4) EV Technical Standard on Electric Motorcycle

4.35 Electric motorcycle (EMC) will be treated as a fully legal transport tool on the road and must be certified for road safety through registration process under MPWT. EMC applying for registration must present proof of safety standard compliance. This standard will be fair and transparent to all participants, all modes from all countries, foreign or domestic; and at the same time it is designed to promote for a high standard of design and service. It is designed to promote confidence in EV for a long term and to cordon off poorly made brand in the Lao market.

(a) Compulsory Compliance

4.36 In order to ensure the safety of EMC, a certified EMC must comply to the following standards which is referred from Chinese standards;

(i) Lights: Head light, tail light, breaker light, turn signal light be available;

(ii) Front break and rear break be available;

(iii) Main circuit breaker to cut off power in the event of short circuit be available;

(iv) Physical key to turn on/off electricity power be available;

(v) Speed meter and voltage meter be available;

(vi) Car Wash Test: Immediately after the application of a water jet of 12.5 litre/min strength, distance at 3 meter of the EMC, moving at 0.1 meter/s speed, aim at console instrument and motor, through the entire EMC, apply a hi-pot voltage test, no spark or break down of insulation materials around console instrument. Insulation value shall stay equal or larger than 500 Ohm/Volt and the EMC will be functioning normally;

(vii) Shower Test: Immediately after the application of a vertical shower of 10 litre/min strength for 5 minutes, apply above hi-pot test and is subject to same requirement of insulation capacity; and,

(viii) Water Proof Test: Travelling at a constant speed of 20km/hour, on a water trap of 12 cm deep water for a total of 500 meter, at a speed to complete the journey within 10 minutes, apply above hi-pot test and is subject to the same requirement of insulation capacity.

(b) Importation of Built-Up EMC

4.37 Subject to above Compulsory Compliance, a country of origin proof is required for each imported EMC model. A compliance certificate to the National Standard from the proper authority of the country of origin must be available.

5) EV Manufactures and Dealers

(a) EV Manufacture Requirements

4.38 Vehicle manufacture registration is also not available in Lao PDR. To ensure the uniformity and quality of manufacturing, a similar system such as the vehicle identification number (VIN) registration system should be required to qualify EV manufacturers (applicable for e-MC, e-trike, e-bus, and other types of EVs). It may require the proof of certain EV experience, patent, etc. either from a domestic or from a foreign origin. In China, one who wants to apply as a recognized EV manufacturer must be in the field of either a battery manufacturer, battery management control, or current vehicle



4-11

manufacturer. Further, each design of EV must be certified by a testing institution before it can be approved for mass production.

4.39 Code of practice (COP) compliance to ISO or similar quality assurance system by the recognized EV manufacturer will ensure that no small family business will enter the EV manufacturer business and offer some sub-standard product to the market.

4.40 Regarding the certification of assembly, the Lao Prime Minister Decree No.112 requires an established firm to be charged with properly trained professional and provides guidelines to conduct specific tests for the functions of the firm. As well, a reference as the requirements from China where production of some technical oriented products such as EMC would require the satisfaction of both hardware and software. Therefore, the certification of assembly in Lao PDR will require both compliance of hardware and software requirements including the following;

Possession of proper testing equipment: meters (voltage, ampere, water pressure, wheel rotation, ohm, environment controlled testing chamber, speedometer, temperature gauge, battery load tester);

Possession of basic testing road structure within the premises of production: A private hard surface straight road of 500 meters in length with a 100-meter sloppy water trap that is 15 cm deep and a slope of 15% up and down at a minimum height of 5 meters;

Certified electrical engineer: One, full time;

Certified mechanical engineer: One, full time; and,

Incoming component testing standards for critical parts: Motor, breaks, light, switch and battery.

(b) EV Dealers Requirements

4.41 For EV dealers, the following requirement should be applied to protect EV users and to ensure EV promotion in Lao PDR.

(i) Warranty and Service: The government should require all EV suppliers to offer a product and service warranty on the EV on corresponding parts, such as 4 years on the body, 3 years on moving parts and 1 year on the battery and etc. Regular vehicle warranty law should be applied to the EV just as much as on the regular ICE vehicles.

(ii) Proximity of service: EV suppliers should be required to provide service points throughout the city where the EV program is promoted. For example, an EMC program promoted in Vientiane would entail the availability of suppliers (i.e., product and spare parts) and after-sales services within a 5-km radius throughout Vientiane.

4.42 In short, consumers must be assured that if they choose to own an EV, they will have full product and technical support for a reasonable amount of time. This is protection for the consumers and some guarantee for the continuity of product use.


4-12

4.3 Tax System on EVs

4.3.1 Current Tax System on Road Vehicles

1) Current Tax System and Rates on Road Vehicles

4.43 In Lao PDR, according to the Laws on Customs Duties and Taxes, the current vehicle tax system is composed of import tax, excise tax, VAT and road user charges (RUC). These are defined as follows;

(i) Import Tax: This is an indirect tax that is collected from all imported goods into Lao PDR. Import tax rates are specified on two categories, one based on MFN (Most Favored Nation Treatment) and the other based on CEPT (Common Effective Preferential Tariff) (see Table 4.3.1). Tax rate is imposed on tax base amount or "middle price", which is determined for each model based on CIF value and other factors.

(ii) Excise Tax: This is an indirect tax that is collected from certain types of luxury goods and services in which all road vehicles are included except bicycles (see Table 4.3.1). Tax rate is imposed on the sum of tax base amount (middle price) and import tax.

(iii) VAT: This is an indirect tax that is collected from consumers of goods or general services and paid into the state budget. Tax rate is imposed on the sum of tax base amount, import tax, excise tax and margin.

(iv) Road User Charges (RUC): This is a direct tax that is collected annually from all vehicles users to finance road maintenance. Tax rates are specified for each vehicle type and vehicle size/capacity category(see Table 4.3.2).

Table 4.3.1 Tax Rates on Vehicles in the Current Tax System

Type Import Tax (%) Excise Tax

(%) VAT (%)

MFN1) CEPT2)

2-3

wheeler

1 Bicycle 10 1 0 10

2 Motorcycle 50cc 30 1 203) 10

3 Motorcycle 50 - 250cc 40 2 203) 10

4 Motorcycle 250cc 40 5 203) 10

5 Three-wheeler 40 5 20 10

Car

6 Car less than 1000cc 40 20 60 10

7 Car 1000 - 1500cc 40 20 65 10

8 Car 1501 - 3000cc 40 20 75 10

9 Car more than 3001cc 40 20 90 10

Pick up 10 Pick up 2 doors 30 20 20 10

11 Pick up 4 doors 30 20 25 10

Truck

12 Truck less than 5 T 30 20 10 10

13 Truck less than 5 – 20T 30 0 10 10

14 Truck more than 20T 20 0 10 10

15 Trailer 10 0 10 10

Bus 16 Bus less than 15 seats 20 0 25 10

17 Bus more than 15 seats 20 0 20 10 Source: Tariff Nomenclature of Lao PDR Based on ASEAN Harmonized Tariff Nomenclature, Decree of the President of the Lao PDR on

the promulgation of the Tax Law

1) MFN = Most favored Nation Treatment

2) CEPT = Common Effective Preferential Tariff

3) Electric motorcycle = 16%



4-13

Table 4.3.2 Rates of Road User Charges by Vehicle Type

Vehicle Type Category RUC (LAK) Vehicle Type Category RUC (LAK)

Motorcycle

≲ 100 cc 7,000 Truck

GVW: ≲ 7 tones 104,000

101 - 150 cc 8,000 GVW: 7 tones ≲ 130,000

151 cc ≲ 9,000 Mini bus

≲ 7 seats 52,000

3-wheeler

2 seats 10,000 8-15 seats 59,000

3 seats 11,000

Bus

16-24 seats 78,000

125 cc ≲ 12,000 25-35 seats 104,000

550 cc ≲ 18,000 36 seats ≲ 117,000

Car ≲ 1,200 cc 20,000

1,201 cc ≲ 52,000

Source: MPWT

2) Estimation of Road Vehicle Tax under Current Tax System

(a) Methodology

4.44 Current tax system is analyzed in consideration of the following:

(i) Financial cost to vehicle owners over the lifecycle of vehicles: Specific models of different categories of vehicles that are in the current market in Lao PDR were selected. For each model, the amount of taxes and charges that users will have to shoulder was calculated, including both initial (acquisition) and annual costs. These are calculated at present value;

(ii) Relationship between the tax amount and corresponding factors such as "displacement size", "gross vehicle weight (GVW)", and "CO2 emission" of model vehicles: This is to find how current vehicle tax is related to typical parameters of vehicles, because they affect infrastructure development and environment, and;

(iii) Comparison of amount to be collected from road vehicle owners/users with road maintenance expenditure: This is to preliminarily assess the extent to which road vehicle owners/users shoulder road infrastructure expenditure.

Box 4.3.1 Calculation of Lifecycle User Cost of Vehicles

The lifecycle cost is composed of purchase cost and the total annual operation costs for lifecycle.

(1) Purchase Cost = CIF Price + Initial Tax (import tax, excise tax and VAT) + Dealer Margin

- Import tax = CIF price x Import tax rate - Excise tax = (CIF price + Import tax ) x Excise tax rate - VAT = (CIF price + Import tax + Excise tax + Dealer margin) x VAT rate

(2) Annual Operation Cost = Fuel + Lubricant + Battery + Tire + Annual maintenance + Insurance + Road User Charges

- Fuel = Annual driving distance (km) / Fuel efficiency (km/l) x Unit fuel cost (USD/l) - Lubricant = Annual driving distance (km) x Lubricant consumption rate (l/000km) x Unit lubricant

cost (USD/l) - Battery = Unit battery cost - Tire = Annual driving distance (km) x Tire consumption rate (set/0000km) x Unit tire cost

(USD/set) - Annual maintenance = CIF price x 3% - Insurance = Annual insurance cost - Road user charges = Annual road user charges

(3) Lifecycle Cost at Present Value


4-14

= Purchase Cost + ∑ (annual operation cost/((1＋8%)^(year)))

Case of motorcycle = 10 years of lifecycle

Lifecycle cost = Purchase cost + Annual operation cost/((1＋8%)^1) + Annual operation cost/((1＋8%)^2) + Annual operation cost/((1＋8%)^3) + …+ Annual operation cost/((1＋8%)^9) + Annual operation cost/((1＋8%)^10)

(b) Selection of Model Vehicles

4.45 A total of 31 model vehicles that are popular in Lao PDR, and selected parameters that are related to the analysis are identified (see Figure 4.3.1 and Figure 4.3.2). Models selected include the following:

(i) 2-wheeler 1. HONDA Wave 100 (motorcycle) 2. HONDA Click (scooter)

(ii) 3-wheeler 3. Jumbo 4. Tuktuk

(iii) Car Small car (displacement < 1,000cc, GVW ≲ 1,550 kg)

5. TOYOTA Yaris 6. HYUNDAI I 10.1

Medium car (displacement < 2,000cc, GVW < 1,950 kg)

7. HONDA Civic 1.8vtec 8. HYUNDAI Elantra Heavy car (displacement 2,000cc ≲, GVW 2,000kg ≲) 9. TOYOTA Camry 2.5V 10. TOYOTA Lexus GS350

(iv) UV Pick-up

11. TOYOTA Vigo 2WD 12. Ford Ranger XL VAN 13. TOYOTA HiAce 14. HYUNDAI Starex H-1 SUV 15. TOYOTA Fortuner 1KD 16. KIA Mohave 3.8l LX 17. TOYOTA Prado VX 18. Land Cruiser LC200 MT

(v) Truck Small truck (GVW < 5tons)

19. KIA K2700 20. MITSUBISHI Canter 21. ISUZU Elf Medium truck (GVW 5-8tons) 22. HINO NT450 Atlas 23. HINO Ranger 24. ISUZU Forward Large truck (GVW 8t <) 25. ISUZU Giga



4-15

(vi) Bus Small bus (< 29seats)

26. HYUNDAI County Medium Bus (30 – 49seats) 27. MITSUBISHI Rosa 28. HINO Melpha 29. HINO Poncho Large bus (< 50seats) 30. MITSUBISHI Aero Queen 31. MITSUBISHI AERO Star


4-16

Source: MOF, web-site of each auto-manufacturers

Figure 4.3.1 Characteristics of Selected Model Vehicles (2-3 wheel, Car, UV)

Representative Model Representative ModelEngine (cc): 97 Engine (cc): 3,500GVW (kg): 92 GVW (kg): 2,170No. of Seats: 1 No. of Seats: 5Mileage (km/l): 49 Mileage (km/l): 10CO2 (g/km) 46 CO2 (g/km) 229CIF Price (USD) 1,175 CIF Price (USD) 44,350Middle Price (USD) 355 Middle Price (USD) 15,510Engine (cc): 108 Engine (cc): 2,494GVW (kg): 99 GVW (kg): 2,830No. of Seats: 1 No. of Seats: 5Mileage (km/l): 51 Mileage (km/l): 10CO2 (g/km) 45 CO2 (g/km) 172CIF Price (USD) 2,000 CIF Price (USD) 18,420Middle Price (USD) 605 Middle Price (USD) 7,560Engine (cc): 125 Engine (cc): 3,700GVW (kg): 350 GVW (kg): 2,130No. of Seats: 6 No. of Seats: 5Mileage (km/l): 10 Mileage (km/l): 7CO2 (g/km) 227 CO2 (g/km) 173CIF Price (USD) 626 CIF Price (USD) 23,995Middle Price (USD) 313 Middle Price (USD) 11,518Engine (cc): 500 Engine (cc): 2,982GVW (kg): 500 GVW (kg): 2,600No. of Seats: 10 No. of Seats: 12Mileage (km/l): 10 Mileage (km/l): 8CO2 (g/km) 227 CO2 (g/km) 221CIF Price (USD) 1,051 CIF Price (USD) 19,840Middle Price (USD) 526 Middle Price (USD) 10,440Engine (cc): 1,498 Engine (cc): 2,497GVW (kg): 1,525 GVW (kg): 2,800No. of Seats: 4 No. of Seats: 12Mileage (km/l): 13 Mileage (km/l): 12CO2 (g/km) 104 CO2 (g/km) 199CIF Price (USD) 14,464 CIF Price (USD) 19,000Middle Price (USD) 7,000 Middle Price (USD) 5,529Engine (cc): 1,086 Engine (cc): 2,982GVW (kg): 860 GVW (kg): 2,510No. of Seats: 4 No. of Seats: 5Mileage (km/l): 12 Mileage (km/l): 8CO2 (g/km) 99 CO2 (g/km) 203CIF Price (USD) 7,000 CIF Price (USD) 28,277Middle Price (USD) 2,496 Middle Price (USD) 12,240Engine (cc): 1,798 Engine (cc): 2,959GVW (kg): 1,279 GVW (kg): 3,400No. of Seats: 5 No. of Seats: 5Mileage (km/l): 13 Mileage (km/l): 9CO2 (g/km) 148 CO2 (g/km) 229CIF Price (USD) 22,000 CIF Price (USD) 30,000Middle Price (USD) 7,920 Middle Price (USD) 5,529Engine (cc): 1,591 Engine (cc): 3,956GVW (kg): 1,228 GVW (kg): 2,990No. of Seats: 5 No. of Seats: 8Mileage (km/l): 13 Mileage (km/l): 9CO2 (g/km) 145 CO2 (g/km) 305CIF Price (USD) 11,000 CIF Price (USD) 47,259Middle Price (USD) 2,800 Middle Price (USD) 16,920Engine (cc): 2,494 Engine (cc): 4,461GVW (kg): 2,100 GVW (kg): 3,350No. of Seats: 5 No. of Seats: 8Mileage (km/l): 11 Mileage (km/l): 9CO2 (g/km) 263 CO2 (g/km) 313CIF Price (USD) 28,595 CIF Price (USD) 60,031Middle Price (USD) 10,000 Middle Price (USD) 24,480

Car

Heavy Car (≥2,000cc,

and GVW ≥2,000kg)

9. Toyota Camry 2.5V

6. Hyundai I 10.1

Medium Car(Less than 2,000CC and GVW <1,950kgs)

Small Car(Less than 1,100 cc, and GVW ≤ 1,550 kgs)

7. Honda Civic 1.8ivtec

8. Hyundai Elantra

5. Toyota Yaris

Vehicle Type Model Parameters

4. Tuktuk: 1,525USB

1. HONDA Wave 100

Motorcycle

2-wheel2. HONDA Click

Scootor

3. Jumbo: 915USD

3-wheel

10. Toyota Lexus GS350

CarHeavy Car (≥

2,000cc, and GVW ≥2,000kg)

Model ParametersVehicle Type

Utility Vehicle (UV)

Pick-up

11. Toyota Vigo 2WD

12. Ford Ranger XL

Van

13. Toyota HiAce

14. Hyundai Starex H-1

SUV

15. Toyota Fortuner 1KD

16. Kia Mohave 3.8L LX

17. Toyota Prado VX

18. Land Cruiser LC200 MT



4-17

Source: MOF, web-site of each auto-manufacturers

Note: Middle price is set as follows; 1) Model No. 2, 5, 6, 7, 8, 9, 11, 13, 14, 15, 16, 17, 18, 19 and 26 from official list provided by MOF

2) Model No. 1: 30% of CIF (assumed by JICA Study Team)

3) Model No. 3 and 4: 1/2 of CIF (assumed by JICA Study Team)

4) Model No. 12, 20, 21, 22, 23, 24, 25, 27, 28, 29, 30 and 31: 48% of CIF (assumed by JICA Study Team)

Figure 4.3.2 Characteristics of Selected Model Vehicles (Truck, Bus)

Representative Model Representative Model

Engine (cc): 2,607 Engine (cc): 3,907

GVW (kg): 3,300 GVW (kg): 6,360

No. of Seats: 3 No. of Seats: 19

Mileage (km/l): 11 Mileage (km/l):

CO2 (g/km) 288 CO2 (g/km) 647

CIF Price (USD) 7,900 CIF Price (USD) 21,000

Middle Price (USD) 2,360 Middle Price (USD) 10,800


GVW (kg): 4,395 GVW (kg): 5,965


Mileage (km/l): 11 Mileage (km/l): 10

CO2 (g/km) 223 CO2 (g/km) 267




GVW (kg): 4,730 GVW (kg): 9,475



CO2 (g/km) 247 CO2 (g/km) 437




GVW (kg): 5,525 GVW (kg): 7,590



CO2 (g/km) 254 CO2 (g/km) 409




GVW (kg): 7,970 GVW (kg): 15,755


Mileage (km/l): Mileage (km/l): 5

CO2 (g/km) 354 CO2 (g/km) 575




GVW (kg): 5,193 GVW (kg): 14,415



CO2 (g/km) 354 CO2 (g/km) 609



Engine (cc): 9,839

GVW (kg): 24,950

No. of Seats: 2

Mileage (km/l):

CO2 (g/km) 647

CIF Price (USD) 200,400

Middle Price (USD) 96,192

25. Isuzu Giga

Vehicle Type Model Parameters Vehicle Type Model Parameters

Small Truck

(GVW 5t>)

21. Isuzu Elf

29. Hino Poncho

Medium Bus

(30 - 49

Seats)

Large Bus

(≤ 50 Seats)

31. Mitsubishi Aero Star

30. Mitsubishi Aero Queen

27. Mitsubishi Rosa

28. Hino Melpha

Large Truck

(GVW 8t<)

Truck Small Bus

(< 29 Seats)

26. Hyundai CountyBus

22. Hino NT450 AtlasMedium

Truck (GVW

5 - 8t)

23. Hino Ranger

24. Isuzu Forward

19. Kia K2700

20. Mitsubishi Canter


4-18

(c) Estimation of Tax Amount (Lifecycle) by Type of Vehicle under Current Tax System

4.46 For selected model vehicles, the amount of tax and charge was calculated based on the current vehicle tax system (see Table 4.3.3). Main characteristics are as follows;

(i) Current tax amount largely depends on initial taxes (import, excise and VAT), while contribution of annual tax (RUC) is minimal;

(ii) Tax amount varies significantly among vehicles models within the same/similar category;

(iii) There is a tendency wherein tax amount is relatively larger for some luxurious models and heavier vehicles, and;

(iv) Level of import tax, excise tax and VAT are determined by the level of middle price. How middle price is determined affects greatly tax amount for different vehicle models.

Table 4.3.3 Amount of Tax/Charge for Model Vehicles in Lifecycle

Category Selected Model

Tax Amount by Category (USD) Total

Tax/CIF (%) Initial Annual

Total Import Excise VAT Sub-total RUC1)

2-Wheeler M/C 1. HONDA Wave 100 142 99 66 307 6 313 26.7

Scooter 2. HONDA Click 242 169 112 523 7 530 26.5

3-Wheeler 3. Jumbo 125 88 59 271 10 282 45.0

4. Tuktuk 210 147 99 456 10 466 44.4

Car

Small 5. Toyota Yaris 2,800 6,370 1,815 10,985 50 11,035 76.3

6. Hyundai I 10.1 998 2,271 727 3,996 19 4,015 57.4

Medium 7. Honda Civic 1.8ivtec 3,168 8,316 2,120 13,604 50 13,654 62.1

8. Hyundai Elantra 1,120 2,940 886 4,946 50 4,996 45.4

Heavy 9. Toyota Camry 2.5V 4,000 10,500 2,713 17,213 50 17,262 60.4

10. Toyota Lexus GS350 6,204 19,542 4,569 30,315 50 30,365 68.5

Utility Vehicle

Pick-up 11. Toyota Vigo 2WD 2,268 2,457 1,373 6,098 50 6,148 33.4

12. Ford Ranger XL 3,455 3,743 2,112 9,310 50 9,360 39.0

Van 13. Toyota HiAce 2,088 3,132 1,700 6,920 50 6,970 35.1

14. Hyundai Starex H-1 1,296 1,944 1,172 4,412 50 4,462 23.5

SUV

15. Toyota Fortuner 1KD 4,896 11,995 3,186 20,077 50 20,127 71.2

16. Kia Mohave 3.8L LX 2,212 5,418 1,566 9,196 50 9,246 30.8

17. Toyota Prado VX 6,768 17,766 4,618 29,152 50 29,202 61.8

18. Land Cruiser LC200 MT 9,792 25,704 6,598 42,094 50 42,144 70.2

Truck

Small

19. Kia K2700 708 307 416 1,431 120 1,552 19.6

20. Mitsubishi Canter 4,447 1,927 2,428 8,802 120 8,923 28.9

21. Isuzu Elf 6,317 2,737 3,450 12,504 120 12,624 28.8

Medium

22. Hino NT450 Atlas 6,006 2,603 3,280 11,889 120 12,009 28.8

23. Hino Ranger 10,025 4,344 5,475 19,844 151 19,995 28.7

24. Isuzu Forward 10,257 4,445 5,601 20,303 120 20,424 28.7

Large 25. Isuzu Giga 19,238 11,543 14,701 45,483 151 45,633 22.8

Bus

Small 26. Hyundai County 2,160 2,592 1,765 6,517 90 6,608 31.5

Medium

27. Mitsubishi Rosa 6,171 7,405 5,086 18,662 120 18,782 29.2

28. Hino Melpha 16,253 19,503 13,395 49,151 120 49,272 29.1

29. Hino Poncho 15,299 18,359 12,609 46,268 135 46,403 29.1

Large 30. Mitsubishi Aero Queen 40,844 49,013 33,662 123,520 135 123,655 29.1

31. Mitsubishi Aero Star 20,382 24,458 16,798 61,638 135 61,773 29.1 Source: JICA Study Team 1) the amount is calculated annually over the lifecycle and estimated at present value based on discount rate of 8%/year



4-19

3) Analysis of Current Tax System

4.47 Current tax system has been further analyzed how the rates are applied for different types of vehicles in conjunction with “CIF price”, “Displacement”, “GVW” and “CO2 emission” as follows.

(a) Tax Amount and Middle Price

4.48 Level of middle price that is the tax base affects calculation of the tax amount including import tax, excise tax and VAT, except annual RUC. On this basis of the data on CIF obtained from the market (website) as well as those on middle price provided by MOF or assumed by the Study Team, the ratio of middle price to CIF of selected models is calculated (see Table 4.3.4). Characteristics are as follows:

(i) While middle price are set to the level between 0.3 and 0.5 of CIF prices, there is no clear indication how middle prices are defined; and,

(ii) Ratio of middle price to CIF varies in some groups of vehicles. For example in the category of small car, the ratio is different between vehicle models. Similarly differences are seen in the categories of van, SUV and small truck. These differences will affect not only the tax amount but also by the marketing of related models by suppliers.

(iii) With regard to specific models, middle price for Mohave (SUV) and Elantra (Medium Car) is set very low compared to other models.

4.49 It is observed that while predetermined middle price will not be affected by fluctuation of the price in the market, it may cause such differences as mentioned above.

Table 4.3.4 Characteristics of Middle Price (Tax Base) in Comparison to CIF

Representative Vehicle Model Price (USD)

MP/CIF CIF Middle Price (MP)

Motorcycle 1 Wave 100 1,175 1) 3554) 0.30

2 Click 2,0002) 6052) 0.30

3-wheeler 3 Jumbo 6263) 3135) 0.50

4 Tuktuk 1,0513) 5265) 0.50

Car

Small 5 Yaris 14,4642) 7,0002) 0.48

6 Hyundai I 7,0002) 2,4962) 0.36

Medium 7 Civic 22,0002) 7,9202) 0.36

8 Elantra 11,0002) 2,8002) 0.25

Heavy 9 Camry 28,5952) 10,0002) 0.35

10 Lexus 44,3501) 15,5106) 0.35

UV

Pick-up 11 Vigo 18,4202) 7,5602) 0.41

12 Ranger 23,9951) 11,5186) 0.48

Van 13 HiAce 19,8402) 10,4402) 0.53

14 Starex 19,0002) 6,4802) 0.34

SUV

15 Fortuner 28,2772) 12,2402) 0.43

16 Mohave 30,0002) 5,5292) 0.18

17 Prado 47,2592) 16,9202) 0.36

18 Land Cruiser 60,0312) 24,4802) 0.41

Truck Small

19 K2700 7,9002) 2,3602) 0.30

20 Canter 30,8811) 14,8236) 0.48

21 Elf 43,8671) 21,0566) 0.48

Medium 22 Atlas 41,7101) 20,0216) 0.48


4-20

Representative Vehicle Model Price (USD)

MP/CIF CIF Middle Price (MP)

23 Ranger 69,6191) 33,4176) 0.48

24 Forward 71,2291) 34,1906) 0.48

Large 25 Giga 200,4001) 96,1926) 0.48

Bus

Small 26 County 21,0002) 10,8002) 0.51

Medium

27 Rosa 64,2811) 30,8556) 0.48

28 Melpha 169,3001) 81,2646) 0.48

29 Poncho 159,3691) 76,4976) 0.48

Large 30 Aero Queen 425,4601) 204,2216) 0.48

31 Aero Star 212,3101) 101,9096) 0.48

Source: Worked out by JICA Study Team based on the following. 1) Data from website of HONDA, TOYOTA, Ford, HINO and MITSUBISHI, 2) Data provided by MOF 3) Data collected from the driver of Jumbo and Tuktuk, 4) 30% of CIF (assumed) 5) 1/2 of CIF (assumed), 6) 48% of CIF (assumed)

(b) Tax Amount vs Displacement, GVW and CO2 Emission

4.50 Taxation on any commodities and services, requires rational basis for the purpose of collection and rates. A preliminary analysis is made on the relationship between the following:

(i) Tax amount in relation to displacement size, considering that large vehicles 'resource-consumption and environmental impact are higher;

(ii) Tax amount in relation to GVW, considering that the larger GVW the more roads are affected, and;

(iii) Tax amount in relation to CO2 emission, considering the impact on climate change.

4.51 The analysis was made based on the information worked out (see Table 4.3.5 and Figure 4.3.3). Main characteristics are as follows:

(i) Initial tax amount is correlated with CIF price based on the following characteristics:

- UVs are charged higher rates, followed by cars and trucks, and;

- Larger buses are charged higher rates.

(ii) There is no explicit relationship between initial tax amount and GVW as well as CO2 emission, and;

(iii) There is also no relationship between RUC and GVW, though heavier vehicles tend to shoulder larger amount of tax.

Table 4.3.5 Amount of Tax/Charge for Mode Vehicles

Category Selected Model Initial/Displacement

(USD/cc)

Initial/GVW

(USD/kg)

Initial/CO2

(USD/g/km)

RUC1)/GVW

(USD/ton)

2-

Wheeled

M/C 1. HONDA Wave 100 3.2 3.3 6.7 65.4

Scooter 2. HONDA Click 4.8 5.3 11.7 68.1

3-Wheeled 3. Jumbo 2.2 0.8 1.2 28.8

4. Tuktuk 0.9 0.9 2.0 20.1

Car

Small 5. Toyota Yaris 7.3 7.2 105.6 32.6

6. Hyundai I 10.1 3.7 4.6 40.4 21.9

Medium 7. Honda Civic 1.8ivtec 7.6 10.6 91.9 38.9

8. Hyundai Elantra 3.1 2.4 34.1 23.7

Heavy 9. Toyota Camry 2.5V 6.9 8.2 65.4 23.7

10. Toyota Lexus GS350 8.7 14.0 132.2 22.9



4-21

Category Selected Model Initial/Displacement

(USD/cc)

Initial/GVW

(USD/kg)

Initial/CO2

(USD/g/km)

RUC1)/GVW

(USD/ton)

Utility

Vehicle

Pick-up 11. Toyota Vigo 2WD 2.4 2.2 35.5 17.6

12. Ford Ranger XL 2.5 4.4 54.0 23.4

Van 13. Toyota HiAce 2.3 2.7 31.3 19.1

14. Hyundai Starex H-1 1.8 1.6 22.2 17.8

SUV

15. Toyota Fortuner 1KD 6.7 8.0 99.1 19.8

16. Kia Mohave 3.8L LX 3.1 2.7 40.2 14.6

17. Toyota Prado VX 7.4 9.7 95.6 16.6

18. Land Cruiser LC200 MT 9.4 12.6 134.5 14.8

Truck

Small

19. Kia K2700 0.5 0.4 5.0 36.5

20. Mitsubishi Canter 2.9 2.0 39.5 27.4

21. Isuzu Elf 4.2 2.6 50.6 25.5

Medium

22. Hino NT450 Atlas 4.0 2.2 46.8 21.8

23. Hino Ranger 3.9 2.5 56.1 18.9

24. Isuzu Forward 2.6 3.9 57.4 23.2

Large 25. Isuzu Giga 4.6 1.8 70.3 6.0

Bus

Small 26. Hyundai County 1.7 1.0 10.1 14.2

Medium

27. Mitsubishi Rosa 6.2 3.1 69.9 20.2

28. Hino Melpha 7.7 5.2 112.5 12.7

29. Hino Poncho 9.0 6.1 113.1 17.8

Large 30. Mitsubishi Aero Queen 9.6 7.8 214.8 8.6

31. Mitsubishi Aero Star 8.2 4.3 101.2 9.4 Source: JICA Study Team 1) The amount is calculated annually over the lifecycle and estimated at present value based on discount rate of 8%/year

Initial Tax vs Displacement Size

Initial Tax vs Gross Vehicle Weight

MotorcycleThree-wheelerCarUtility VehicleTruckBus


4-22

Initial Tax vs CO2 Emission

Road User Charge vs Gross Vehicle Weight


Figure 4.3.3 Tax Amount and Vehicle Parameters of Selected Models

(c) Estimate of Tax Revenue related to Road Vehicles

4.52 On the basis of the above, tax revenue from road vehicles is estimated as follows;

(i) Main Sources of Tax Revenue: It is useful to find to the extent of road vehicle owners/users’ share on road expenditure, especially that for maintenance. It is considered that the main tax sources for this purpose are comprised of taxes from road vehicles as well as fuels consumed by road vehicles.

(ii) Forecast of Road Vehicles: It is assumed that the number of pick-up/SUV will be reduced due to the government’s preferential treatment on environment-friendly vehicles. Based on the number of vehicles forecasted in the JICA-assisted “Basic Data Collection Study on Low-emission Public Transport System in Lao PDR”, half of newly registered pick-ups and SUVs will be assumed to shift to sedans. (see Table 4.3.6 and Table 4.3.7).

Table 4.3.6 Estimated No. of Vehicles by Type in Lao PDR

Year 2012 2015 2020 2025 2030

Private

Motorcycle 1,005,047 1,163,468 1,484,912 1,721,420 1,995,598

Cars Sedan 35,514 72,494 301,292 565,037 833,585 Pick-up/SUV/Van 202,559 260,945 339,513 392,814 526,268

Truck 33,460 48,768 61,780 67,316 81,969

Public 3-wheeler/Minibus 10,177 18,677 21,698 33,123 45,443

Medium/Standard bus 1,943 17,988 24,668 39,775 55,541

Total 1,288,700 1,582,339 2,233,864 2,819,485 3,538,404 Source: JICA Study Team

12

34

6

19 2021

24

26

27 28

29 3031

0

20

40

60

80

100

120

140

0 5,000 10,000 15,000 20,000

Road

Use

r Cha

rge

in Li

fecy

cle (U

SD)

Gross Vehicle Weight (kg)

12 34

5

6

7 8&9

1110&1213

1415 1617 18

19 20 21 24

26

27 28

29

0

20

40

60

80

100

120

140

0 2,500 5,000 7,500 10,000

Road

Use

r Cha

rge

in Li

fecy

cle (U

SD)

Gross Vehicle Weight (kg)



4-23

Table 4.3.7 Estimated No. of Vehicles by Type by Category

Year 2012 2015 2020 2025 2030

2-Wheeled

Motorcycle 502,524 581,734 742,456 860,710 997,799

Scooter 502,524 581,734 742,456 860,710 997,799

Sub-total 1,005,047 1,163,468 1,484,912 1,721,420 1,995,598

3-Wheeled 8,588 3,959 1,515 580 0

Cars

Light 15,981 33,145 140,831 265,103 391,136

Medium 15,981 33,145 140,831 265,103 391,136

Heavy 3,551 6,204 19,631 34,831 51,314

Sub-total 35,514 72,494 301,292 565,037 833,585

UV

Pick-up 147,497 187,895 226,403 242,393 319,397

Van 37,831 52,966 87,309 122,152 170,803

SUV 17,231 20,084 25,802 28,270 36,069

Sub-total 202,559 260,945 339,513 392,814 526,268

Truck

Small 13,384 19,507 24,712 26,926 32,788

Medium 13,384 19,507 24,712 26,926 32,788

Large 6,692 9,754 12,356 13,463 16,394

Sub-total 33,460 48,768 61,780 67,316 81,969

Bus

Small 1,589 14,718 20,183 32,543 45,443

Medium 1,589 14,718 20,183 32,543 45,443

Large 353 3,271 4,485 7,232 10,098

Sub-total 3,532 32,706 44,850 72,318 100,984

Total 1,288,700 1,582,339 2,233,863 2,819,485 3,538,404


(iii) Tax Revenue from Vehicles: Tax revenue in the future was estimated based on the forecasted number of vehicles. As a result, the tax revenue from the vehicles will reach USD3.1 billion in the next five years. The amount of excise tax shares about 50%, followed by import tax and VAT. The share of RUC is very small. In terms of the vehicle type, cars’ tax revenue share is about 50%.

Table 4.3.8 Tax Revenue by Tax Category

Tax Revenue Tax Revenue @ Present Value 1)

2015-2019 2020 - 2024 2025 - 2030 Total 2015-2019 2020 - 2024 2025 - 2030 Total

Revenue @ Present System

(USD mil.)

Import Tax 1,225 1,524 2,719 5,468 960 820 952 2,732

Excise Tax 1,957 2,559 4,521 9,037 1,531 1,375 1,585 4,491

VAT 810 1,039 1,838 3,688 635 559 644 1,838

RUC 26 38 65 129 21 21 23 64

Total 4,019 5,159 9,143 18,321 3,146 2,775 3,204 9,125

Share (%)

Import Tax 30.5 29.5 29.7 29.8 30.5 29.6 29.7 29.9

Excise Tax 48.7 49.6 49.4 49.3 48.7 49.6 49.5 49.2

VAT 20.2 20.1 20.1 20.1 20.2 20.1 20.1 20.1

RUC 0.6 0.7 0.7 0.7 0.7 0.7 0.7 0.7

Total 100 100 100 100 100 100 100 100

Source: JICA Study Team 1) Estimated present value based on discount rate of 8%/year.


4-24

Table 4.3.9 Tax Revenue Share by Vehicle Type

2015-2019 2020 - 2024 2025 - 2030 Total

Tax Revenue Share by

Vehicle Type (%)

2-3Wheel 7.7 5.9 5.2 5.9

Cars 48.5 48.9 49.8 49.2

UV 26.1 26.7 26.3 26.4

Truck 9.0 4.2 7.3 6.8

Bus 8.7 14.4 11.4 11.6

Total 100 100 100 100 Source: JICA Study Team

(iv) Revenue from Fuel Tax: Taxes imposed on fuel are the same as vehicles. These are import tax, excise tax and VAT (see Table 4.3.10). In addition to these taxes, the government also imposes a surcharge, which is included in retail prices, 420 LAK/liter, to earmark for a road fund. The road fund is used to finance nationwide road maintenance.

Table 4.3.10 Fuel Taxes

Type Import Tariff (%) Excise Tax

(%) VAT (%)

Surcharge

(LAK/liter) MFN CEPT

1 Super gasoline 20 5 23 5

420 2 Regular gasoline 15 5 22 5

3 Diesel 5 5 10 5 Source: Decree of the President of the Lao PDR on the promulgation of the Tax Law

(v) Contribution of Road Users to Road Maintenance: Regarding road maintenance, when the unit cost for road maintenance was high (i.e., 2008 and 2011), the Road Maintenance Fund (RMF) from fuel surcharges and RUCs were insufficient to cover the road maintenance cost (see Table 4.3.11). Since the data shown is only for national roads, RMF is far from sufficient to meet the requirements for all types of roads including provincial and other roads.

Table 4.3.11 Balance of National Road Maintenance Expenditure

National Road Length Maintenance Cost Maintenance Budget (USD mil.) Balance

(USD mil.) Total (km)

For Maintenance Total 1)

(USD mil.)

Unit

(USD 000/km) Surcharge2) RUC3) Total

(km) Share (%)

2007 7,200 7,141 99.2 11.1 1.6 10.2 1.2 11.4 0.3

2008 7,234 7,137 98.7 37.0 5.2 14.5 1.5 16.0 -20.9

2009 7,234 6,980 96.5 10.8 1.6 20.5 1.9 22.3 11.5

2010 7,235 6,991 96.6 12.6 1.8 25.6 2.2 27.8 15.2

2011 7,235 7,712 - 50.0 6.5 32.9 2.7 35.6 -14.4

Source: MPWT 1) Maintenance cost includes only the cost for national road, which was provided by Department of Planning and Cooperation, MPWT. 2) The data was provided by Department of Planning and Cooperation, MPWT 3) The amount of RUC was estimated by JICA Study Team based on the number of vehicles provided by MPWT.



4-25

4.3.2 Review of the MOF Drafted Tax System

1) Draft Vehicle Tax System

4.53 The MOF drafted tax system is composed of “trading tax” and “goods and service tax”, “excise tax”, “road user charges (RUC)” and “environmental tax”. According to the Draft Decree of the President of Lao PDR on Vehicle Tax, these are defined as follows:

(i) Trading tax: This is an indirect tax that is collected from imported vehicles. The tax is imposed at the time of acquisition of vehicles;

(ii) Goods and service tax: This is an indirect tax that is collected from vehicles instead of VAT. The tax is imposed at the time of acquisition of vehicles;

(iii) Excise tax: This is an indirect tax that is collected from certain types of luxury goods and services. The tax is imposed annually;

(iv) Road user charges (RUC): This is a direct tax that is collected annually from all vehicle users to finance road maintenance, and;

(v) Environmental tax: This is a direct tax that is collected from vehicles causing environmental pollution.

4.54 Vehicles are categorized by type, value and displacement (cc)/motor (HP) as follows.

(a) Classification by type of vehicle: Vehicle are classified into:

(i) 2- or 3-wheeled vehicles;

(ii) Pick up and van;

(iii) Sedan and SUV;

(iv) Goods and passenger transport vehicles;

(v) Heavy machinery vehicles;

(vi) Goods and passenger transport boats, and;

(vii) Other energy type vehicles.

(b) Classification by CIF price of vehicle: Vehicles are grouped into five according to the price range of CIF (see Table 4.3.12).

Table 4.3.12 Vehicle Group by CIF

Group Definition

Value CIF price is less than USD 15,000.

Standard CIF price is USD15,000 – 25,000.

Premium CIF price is USD25,000 – 35,000.

Luxury CIF price is USD35,000 – 60,000.

Executive CIF price is more than USD60,000.

Source: “DRAFT” Decree of the President of Lao PDR on Vehicle Tax

(c) Classification by displacement or motor: For “pick-up and van”, and “sedan and SUV”, displacement is classified into six, namely 1,000cc below, 1,001 – 2,000cc, 2,001 – 2,500cc, 2,500 – 3,000cc, 3,001 – 4,000cc, and 4,000cc above. For other categories of vehicles, motor power (HP) is applied.


4-26

4.55 For each category of vehicle, specific rates are applied (see Table 4.3.13 and Table 4.3.14). Main design principles that can be seen from the tables are as follows:

(i) Vehicles are classified more in detail according to vehicle type, value and power. While buses and trucks are separated in the current tax system, these are merged as "goods and passenger transport vehicles";

(ii) Trading tax, goods and service tax and excise tax are imposed in accordance with value and power of vehicles. Tax rates are higher for vehicles with higher price and horsepower. On the other hand, fixed rate of RUC is applied to all categories of vehicles;

(iii) For vehicles using other type of energies are also classified as ICE vehicles on HP of motor rather than displacement. Conversion rates are assumed as follows: 1,000cc = 25HP, 2,000cc = 50HP, 2,500cc = 100HP, 3,000cc = 300HP, and 4,000cc = 500HP.

(iv) Environmental tax rate is applied on violations of environmental standards that becomes higher by the number of cautions received (see Table 4.3.15)

Table 4.3.13 Tax Rate on Vehicles in the MOF Drafted Tax System (ICE Vehicles)

Vehicle Type Value Group Power

Initial Tax Annual Tax

Trading tax

($/CC)

Goods and

service tax1) Excise tax1)

Road user

charge1)

2- or 3-

Wheeled

Vehicles

1. Value Group

2. Standard Group

3. Premium Group

4. Luxury Group

5. Executive Group

No classification by power.

1.00

1.25

1.50

1.75

2.00

10%

10%

10%

10%

10%

4%

4%

4%

4%

4%

0.5%

0.5%

0.5%

0.5%

0.5%

Pick up and

Van

1. Value Group From 1,000 cc & below

1,001 – 2,000 cc

2,001 – 2,500 cc

2,501 – 3,000 cc

3,001 – 4,000 cc

4,001 cc & above

0.40

0.60

0.80

1.00

1.25

1.50

10%

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

8%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%

2. Standard Group From 1,000 cc & below

1,001 – 2,000 cc

2,001 – 2,500 cc

2,501 – 3,000 cc

3,001 – 4,000 cc

4,001 cc & above

0.60

0.80

1.00

1.25

1.50

1.80

10%

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

8%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%

3. Premium Group From 1,000 cc & below

1,001 – 2,000 cc

2,001 – 2,500 cc

2,501 – 3,000 cc

3,001 – 4,000 cc

4,001 cc & above

1.00

1.25

1.50

2.00

2.50

3.00

10%

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

8%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%

4. Luxury Group From 1,000 cc & below

1,001 – 2,000 cc

2,001 – 2,500 cc

2,501 – 3,000 cc

3,001 – 4,000 cc

4,001 cc & above

1.50

2.00

2.50

3.00

3.50

4.00

10%

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

8%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%

5. Executive Group From 1,000 cc & below

1,001 – 2,000 cc

2,001 – 2,500 cc

2,501 – 3,000 cc

2.00

2.50

3.00

3.50

10%

10%

10%

10%

3%

4%

5%

6%

0.5%

0.5%

0.5%

0.5%



4-27

Vehicle Type Value Group Power


Trading tax

($/CC)

Goods and


Road user

charge1)

3,001 – 4,000 cc

4,001 cc & above

4.00

4.50

10%

10%

7%

8%

0.5%

0.5%

Sedan and

SUV

1. Value Group From 1,000 cc & below

1,001 – 2,000 cc

2,001 – 2,500 cc

2,501 – 3,000 cc

3,001 – 4,000 cc

4,001 cc & above

1.00

1.20

1.40

1.60

1.80

2.00

10%

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

8%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%

2. Standard Group

From 1,000 cc & below

1,001 – 2,000 cc

2,001 – 2,500 cc

2,501 – 3,000 cc

3,001 – 4,000 cc

4,001 cc & above

1.20

1.40

1.60

1.80

2.00

2.25

10%

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

8%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%

3. Premium Group


1,001 – 2,000 cc

2,001 – 2,500 cc

2,501 – 3,000 cc

3,001 – 4,000 cc

4,001 cc & above

3.00

3.50

4.00

4.50

5.00

5.50

10%

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

8%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%

4. Luxury Group


1,001 – 2,000 cc

2,001 – 2,500 cc

2,501 – 3,000 cc

3,001 – 4,000 cc

4,001 cc & above

3.50

4.00

4.50

5.00

5.50

6.00

10%

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

8%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%

5. Executive Group


1,001 – 2,000 cc

2,001 – 2,500 cc

2,501 – 3,000 cc

3,001 – 4,000 cc

4,001 cc & above

4.00

4.50

5.00

5.50

6.00

6.50

10%

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

8%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%

Goods and Passenger Transport

Vehicles


1,501 – 3,000 cc

3,001 – 5,000 cc

5,001 – 7,000 cc

7,001 – 10,000 cc

10,001 cc & above

1.00

1.10

1.20

1.30

1.40

1.50

10%

10%

10%

10%

10%

10%

4%

4%

4%

4%

4%

4%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%

Heavy Machinery Vehicles From 100 HP & below

101 – 500 HP

501 – 1,000 HP

1,001 –1,500 HP

1,501 – 2,500 HP

2,501 HP & above

4.00

4.20

4.40

4.60

4.80

5.00

10%

10%

10%

10%

10%

10%

4%

4%

4%

4%

4%

4%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%


Boats

From 50 HP & below

51 – 100 HP

101 – 200 HP

201 –300 HP

301 – 400 HP

401 HP & above

3.00

3.20

3.40

3.60

3.80

4.00

10%

10%

10%

10%

10%

10%

4%

4%

4%

4%

4%

4%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5% Source: “DRAFT” Decree of the President of Lao PDR on Vehicle Tax

1) % of trading tax


4-28

Table 4.3.14 Tax Rate on Vehicles in the MOF Drafted Tax System (Other Energy Type Vehicles)

Vehicle Type Value Group Motor


Trading tax

$/HP

Goods and


Road user

charge1)

2- or 3-

Wheeled

Vehicles

From 5.00 HP and below

5.01-10.00 HP

10.01-20.00 HP

20.01-40.00 HP

40.01 HP & above

10.00

15.00

20.00

25.00

30.00

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

0.5%

0.5%

0.5%

0.5%

0.5%

Pick up and

Van

1. Value Group From 25 HP & below

25-50 HP

51-100 HP

101-300 HP

301 – 500 HP

501 HP & above

10.00

15.00

20.00

25.00

30.00

35.00

10%

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

8%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%

2. Standard Group From 25 HP & below

25-50 HP

51-100 HP

101-300 HP

301 – 500 HP

501 HP & above

15.00

20.00

25.00

30.00

35.00

40.00

10%

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

8%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%

3. Premium Group From 25 HP & below

25-50 HP

51-100 HP

101-300 HP

301 – 500 HP

501 HP & above

20.00

25.00

30.00

35.00

40.00

45.00

10%

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

8%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%

4. Luxury Group From 25 HP & below

25-50 HP

51-100 HP

101-300 HP

301 – 500 HP

501 HP & above

25.00

30.00

35.00

40.00

45.00

50.00

10%

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

8%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%

5. Executive Group From 25 HP & below

25-50 HP

51-100 HP

101-300 HP

301 – 500 HP

501 HP & above

30.00

35.00

40.00

45.00

50.00

55.00

10%

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

8%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%

Sedan and

SUV

1. Value Group From 25 HP & below

25-50 HP

51-100 HP

101-300 HP

301 – 500 HP

501 HP & above

20.00

25.00

30.00

35.00

40.00

45.00

10%

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

8%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%

2. Standard Group From 25 HP & below

25-50 HP

51-100 HP

101-300 HP

301 – 500 HP

501 HP & above

25.00

30.00

35.00

40.00

45.00

50.00

10%

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

8%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%

3. Premium Group From 25 HP & below

25-50 HP

51-100 HP

101-300 HP

301 – 500 HP

30.00

35.00

40.00

45.00

50.00

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

0.5%

0.5%

0.5%

0.5%

0.5%



4-29

Vehicle Type Value Group Motor


Trading tax

$/HP

Goods and


Road user

charge1)

501 HP & above 55.00 10% 8% 0.5%

4. Luxury Group From 25 HP & below

25-50 HP

51-100 HP

101-300 HP

301 – 500 HP

501 HP & above

35.00

40.00

45.00

50.00

55.00

60.00

10%

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

8%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%

5. Executive Group From 25 HP & below

25-50 HP

51-100 HP

101-300 HP

301 – 500 HP

501 HP & above

40.00

45.00

50.00

55.00

60.00

65.00

10%

10%

10%

10%

10%

10%

3%

4%

5%

6%

7%

8%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%


Vehicles

From 100 HP & below

101-500 HP

501-1,000 HP

1,001-1,500 HP

1,501 –2,500 HP

2,501 HP & above

3.00

3.50

4.00

4.50

5.00

5.50

10%

10%

10%

10%

10%

10%

4%

4%

4%

4%

4%

4%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%

Heavy Machinery Vehicles

From 100 HP & below

101-500 HP

501-1,000 HP

1,001-1,500 HP

1,501 –2,500 HP

2,501 HP & above

2.00

2.10

2.20

2.30

2.40

2.50

10%

10%

10%

10%

10%

10%

4%

4%

4%

4%

4%

4%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5%


Boats

From 50 HP & below

51-100 HP

101-200 HP

201-300 HP

301 –400 HP

401 HP & above

1.50

1.60

1.70

1.80

1.90

2.00

10%

10%

10%

10%

10%

10%

4%

4%

4%

4%

4%

4%

0.5%

0.5%

0.5%

0.5%

0.5%

0.5% Source: “DRAFT” Decree of the President of Lao PDR on Vehicle Tax

1) % of trading tax

Table 4.3.15 Environmental Tax Rate

No. of Caution Rate

1st time 100 % of Trading tax

2nd time 200% of Trading tax

3rd time 300% of Trading tax

4th time 400% of Trading tax Source: “DRAFT” Decree of the President of Lao PDR on Vehicle Tax

2) Estimation of Tax Amount based on Draft Vehicle Tax System by Vehicle Type

(a) Methodology

4.56 For the same models vehicles shown in Figure 4.3.1 and Figure 4.3.2, tax amount was calculated based on the draft tax rates explained in the above section 1). Key points in the calculation are as follows:

(i) For selected models, the rates specified in Table 4.3.13 are applied;

(ii) While "trading tax" and "goods and service tax" are paid at the time of purchase (which are defined as initial tax), "excise tax" and "road user charge" are paid annually


4-30

(which are defined as annual tax), the latter tax that are paid annually over the life of vehicles are estimated in present value based on assumed discount rate of 8% per year.

(iii) Total amount of tax to be paid by vehicles is composed of initial tax and total of annual tax estimated in present value.

(b) Estimation of Vehicle Tax under Draft Proposal and Comparison with Current System

4.57 Table 4.3.16 shows the results of calculation of taxes by tax category for each vehicle model, showing comparison between current tax system and proposed system. Annual tax is estimated over the lifecycle of model vehicles and converted to present value. Total of initial and annual taxes represent total tax amount expressed at present value that vehicle owners have to shoulder over the lifecycle of vehicles.

4.58 Table 4.3.17 shows the summary of the results in comparison of two systems. Main characteristics are as follows:

(i) For almost all types of vehicles, lifecycle tax amount of the proposed system is lower than that of current system by 15 - 85% depending on the specific models;

(ii) While annual taxes increase significantly, decrease in initial tax is more drastic. It is also noteworthy that the true value of annual tax paid over the life of vehicles is much less than their normal value;

(iii) Reduction in taxes for trucks and buses is highly significant, followed by 2-wheeled vehicles and small cars, and;

(iv) Tax amount will increase for SUV, and large and expensive cars.

Table 4.3.16 Comparison of Vehicle Tax Amount between Current System and Draft Proposal

Category Selected Model CIF

(USD)

Current System (USD) MOF Proposal (USD)

Initial Annual1)

Total

Initial Annual1)

Total Import Excise VAT

Sub- total

RUC Trading Goods/ Service

Sub- total

Excise RUC Sub- total

2-Wheel M/C 1. HONDA Wave 100 1,175 142 99 66 307 6 313 97 10 107 26 3 29 136

Scooter 2. HONDA Click 2,000 242 169 112 523 7 530 108 11 119 29 4 33 151

3-Wheel 3. Jumbo 626 125 88 59 271 10 282 125 13 138 34 4 38 175

4. Tuktuk 1,051 210 147 99 456 10 466 500 50 550 134 17 151 701

Car

Small 5. Toyota Yaris 14,464 2,800 6,370 1,815 10,985 50 11,035 1,798 180 1,977 542 68 610 2,587

6. Hyundai I 10.1 7,000 998 2,271 727 3,996 19 4,015 1,303 130 1,434 393 49 442 1,875

Medium 7. Honda Civic 1.8ivtec 22,000 3,168 8,316 2,120 13,604 50 13,654 2,517 252 2,769 759 95 854 3,623

8. Hyundai Elantra 11,000 1,120 2,940 886 4,946 50 4,996 1,909 191 2,100 576 72 647 2,748

Heavy 9. Toyota Camry 2.5V 28,595 4,000 10,500 2,713 17,213 50 17,262 9,976 998 10,974 3,759 376 4,135 15,108

10. Toyota Lexus GS350 44,350 6,204 19,542 4,569 30,315 50 30,365 19,250 1,925 21,175 10,155 725 10,880 32,055

Utility Vehicle

Pick-up 11. Toyota Vigo 2WD 18,420 2,268 2,457 1,373 6,098 50 6,148 2,494 249 2,743 940 94 1,034 3,777

12. Ford Ranger XL 23,995 3,455 3,743 2,112 9,310 50 9,360 5,550 555 6,105 2,928 209 3,137 9,242

Van 13. Toyota HiAce 19,840 2,088 3,132 1,700 6,920 50 6,970 3,728 373 4,100 1,685 140 1,826 5,926

14. Hyundai Starex H-1 19,000 1,296 1,944 1,172 4,412 50 4,462 2,497 250 2,747 941 94 1,035 3,782

SUV

15. Toyota Fortuner 1KD 28,277 4,896 11,995 3,186 20,077 50 20,127 13,419 1,342 14,761 6,068 506 6,573 21,334

16. Kia Mohave 3.8L LX 30,000 2,212 5,418 1,566 9,196 50 9,246 13,316 1,332 14,647 6,021 502 6,523 21,170

17. Toyota Prado VX 47,259 6,768 17,766 4,618 29,152 50 29,202 21,758 2,176 23,934 11,478 820 12,298 36,232

18. Land Cruiser LC200 MT 60,031 9,792 25,704 6,598 42,094 50 42,144 28,997 2,900 31,896 17,482 1,093 18,574 50,470



4-31

Category Selected Model CIF

(USD)

Current System (USD) MOF Proposal (USD)

Initial Annual1)

Total

Initial Annual1)

Total Import Excise VAT

Sub- total

RUC Trading Goods/ Service

Sub- total

Excise RUC Sub- total

Truck

Small

19. Kia K2700 7,900 708 307 416 1,431 120 1,552 521 52 574 190 24 214 788

20. Mitsubishi Canter 30,881 4,447 1,927 2,428 8,802 120 8,923 1,499 150 1,649 547 68 615 2,264

21. Isuzu Elf 43,867 6,317 2,737 3,450 12,504 120 12,624 2,249 225 2,474 821 103 923 3,397

Medium

22. Hino NT450 Atlas 41,710 6,006 2,603 3,280 11,889 120 12,009 2,249 225 2,473 820 103 923 3,396

23. Hino Ranger 69,619 10,025 4,344 5,475 19,844 151 19,995 5,123 512 5,635 1,869 234 2,103 7,738

24. Isuzu Forward 71,229 10,257 4,445 5,601 20,303 120 20,424 7,955 796 8,751 2,903 363 3,265 12,016

Large 25. Isuzu Giga 200,400 19,238 11,543 14,701 45,483 151 45,633 9,839 984 10,823 3,590 449 4,039 14,862

Bus

Small 26. Hyundai County 21,000 2,160 2,592 1,765 6,517 90 6,608 1,172 117 1,289 428 53 481 1,770

Medium

27. Mitsubishi Rosa 64,281 6,171 7,405 5,086 18,662 120 18,782 2,998 300 3,298 1,094 137 1,231 4,528

28. Hino Melpha 169,300 16,253 19,503 13,395 49,151 120 49,272 6,403 640 7,043 2,336 292 2,628 9,672

29. Hino Poncho 159,369 15,299 18,359 12,609 46,268 135 46,403 5,123 512 5,635 1,869 234 2,103 7,738

Large 30. Mitsubishi Aero Queen 425,460 40,844 49,013 33,662 123,520 135 123,655 12,808 1,281 14,089 4,673 584 5,257 19,346

31. Mitsubishi Aero Star 212,310 20,382 24,458 16,798 61,638 135 61,773 7,545 755 8,300 2,753 344 3,097 11,397

Source: JICA Study Team 1) Total of annual tax over the lifecycle period at present value.

Table 4.3.17 Comparison of Vehicle Tax Amount between Current System and Draft Proposal

Category Selected Model Current System (A) MOF Draft Proposal (B) (B) - (A) (B)/(A)

Initial Annual1) Total Initial Annual1) Total Initial Annual1) Total Initial Annual1) Total

2-Wheel M/C 1. HONDA Wave 100 307 6 313 107 29 136 -200 23 -177 0.35 4.85 0.43

Scooter 2. HONDA Click 523 7 530 119 33 151 -404 26 -378 0.23 4.86 0.29

3-Wheel 3. Jumbo 271 10 282 138 38 175 -134 28 -106 0.51 3.75 0.62

4. Tuktuk 456 10 466 550 151 701 94 141 235 1.21 15.0 1.50

Car

Small 5. Toyota Yaris 10,985 50 11,035 1,977 610 2,587 -9,008 560 -8,448 0.18 12.3 0.23

6. Hyundai I 10.1 3,996 19 4,015 1,434 442 1,875 -2,563 423 -2,140 0.36 23.5 0.47

Medium

7. Honda Civic 1.8ivtec 13,604 50 13,654 2,769 854 3,623 -10,835 804 -10,032 0.20 17.2 0.27

8. Hyundai Elantra 4,946 50 4,996 2,100 647 2,748 -2,846 598 -2,248 0.42 13.0 0.55

Heavy 9. Toyota Camry 2.5V 17,213 50 17,262 10,974 4,135 15,108 -6,239 4,085 -2,154 0.64 83.1 0.88

10. Toyota Lexus GS350 30,315 50 30,365 21,175 10,880 32,055 -9,140 10,830 1,690 0.70 218 1.06

Utility Vehicle

Pick-up 11. Toyota Vigo 2WD 6,098 50 6,148 2,743 1,034 3,777 -3,355 984 -2,371 0.45 20.8 0.61

12. Ford Ranger XL 9,310 50 9,360 6,105 3,137 9,242 -3,205 3,087 -118 0.66 63.1 0.99

Van 13. Toyota HiAce 6,920 50 6,970 4,100 1,826 5,926 -2,820 1,776 -1,044 0.59 36.7 0.85

14. Hyundai Starex H-1 4,412 50 4,462 2,747 1,035 3,782 -1,665 985 -680 0.62 20.8 0.85

SUV

15. Toyota Fortuner 1KD 20,077 50 20,127 14,761 6,573 21,334 -5,316 6,523 1,207 0.74 132 1.06

16. Kia Mohave 3.8L LX 9,196 50 9,246 14,647 6,523 21,170 5,451 6,473 11,924 1.59 131 2.29

17. Toyota Prado VX 29,152 50 29,202 23,934 12,298 36,232 -5,218 12,248 7,030 0.82 247 1.24

18. Land Cruiser LC200 MT 42,094 50 42,144 31,896 18,574 50,470 -10,198 18,524 8,327 0.76 373 1.20

Truck

Small

19. Kia K2700 1,431 120 1,552 574 214 788 -858 94 -764 0.40 1.78 0.51

20. Mitsubishi Canter 8,802 120 8,923 1,649 615 2,264 -7,153 495 -6,659 0.19 5.11 0.25

21. Isuzu Elf 12,504 120 12,624 2,474 923 3,397 -10,030 803 -9,227 0.20 7.67 0.27

Medium

22. Hino NT450 Atlas 11,889 120 12,009 2,473 923 3,396 -9,416 803 -8,613 0.21 7.67 0.28

23. Hino Ranger 19,844 151 19,995 5,635 2,103 7,738 -14,209 1,952 -12,257 0.28 14.0 0.39

24. Isuzu Forward 20,303 120 20,424 8,751 3,265 12,016 -11,553 3,145 -8,408 0.43 27.1 0.59

Large 25. Isuzu Giga 45,483 151 45,633 10,823 4,039 14,862 -34,660 3,888 -30,772 0.24 26.8 0.33

Bus Small 26. Hyundai County 6,517 90 6,608 1,289 481 1,770 -5,228 391 -4,837 0.20 5.33 0.27

Mediu 27. Mitsubishi Rosa 18,662 120 18,782 3,298 1,231 4,528 -15,364 1,110 -14,254 0.18 10.2 0.24


4-32

Category Selected Model Current System (A) MOF Draft Proposal (B) (B) - (A) (B)/(A)

Initial Annual1) Total Initial Annual1) Total Initial Annual1) Total Initial Annual1) Total

m 28. Hino Melpha 49,151 120 49,272 7,043 2,628 9,672 -42,108 2,508 -39,600 0.14 21.8 0.20

29. Hino Poncho 46,268 135 46,403 5,635 2,103 7,738 -40,633 1,968 -38,665 0.12 15.6 0.17

Large 30. Mitsubishi Aero Queen 123,520 135 123,655 14,089 5,257 19,346 -109,431 5,122 -104,308 0.11 38.9 0.16

31. Mitsubishi Aero Star 61,638 135 61,773 8,300 3,097 11,397 -53,338 2,962 -50,376 0.13 22.9 0.18

Source: JICA Study Team 1) The amount is calculated annually over the lifecycle and estimated at present value based on a discount rate of 8%/year

(c) Estimation of Tax Revenue for 2015 – 2030 Period

4.59 Tax revenue in the future under MOF Draft is estimated based on the forecast number of vehicles (see Table 4.3.6) and the tax rates defined in the MOF Draft (see Table 4.3.18), resulting into the following:

(i) While tax revenue at nominal value for 2015 and 2030 period is estimated at USD 10.3 billion, the revenue at present value is USD5.1 billion.

(ii) Initial tax (trading tax and goods/service tax) shares 66% of the total while annual tax (excise tax and RUC) shares 34%. Trading and excise taxes are dominant.

Table 4.3.18 Tax Revenue by Tax Category1)

Tax Revenue @ Current Price Tax Revenue @ Present Value2)

2015-2019 2020 - 2024 2025 - 2030 Total 2015-2019 2020 - 2024 2025 - 2030 Total

Revenue @ MOF Draft (USD mil.)

Trading Tax 1,366 1,725 3,119 6,211 1,069 927 1,093 3,089

Goods Tax 137 173 312 621 107 93 109 309

Excise Tax 671 948 1,572 3,191 529 512 553 1,594

RUC 60 87 147 293 47 47 52 145

Total 2,233 2,933 5,150 10,316 1,752 1,578 1,807 5,137

Share (%)

Trading Tax 61.2 58.8 60.6 60.2 61.0 58.8 60.5 60.1

Goods Tax 6.1 5.9 6.1 6.0 6.1 5.9 6.0 6.0

Excise Tax 30.0 32.3 30.5 30.9 30.2 32.4 30.6 31.0

RUC 2.7 3.0 2.8 2.8 2.7 3.0 2.9 2.8

Total 100 100 100 100 100 100 100 100 Source: JICA Study Team 1) Revenue from environmental tax is not considered, because the implementation measure is not clear. 2) Estimated present value based on a discount rate of 8%/year.

4.60 Tax revenues generated mostly from cars and UVs, are 37% and 49% of the total, respectively (see Table 4.3.19).

Table 4.3.19 Tax Revenue Share by Vehicle Type1)

2015-2019 2020 - 2024 2025 - 2030 Total

Tax Revenue Share by Vehicle

Type (%)

2-3Wheel 5.0 4.0 3.4 3.9

Cars 32.5 36.2 39.5 37.0

UV 52.2 50.5 47.4 49.3

Truck 6.7 4.1 5.2 5.2

Bus 3.6 5.1 4.5 4.5

Total 100 100 100 100 Source: JICA Study Team 1) Revenue from environmental tax is not considered, because the implementation measure is not clear.

4.61 Tax revenues under MOF Draft is compared to that of the revenues under the current system (see Table 4.3.20) resulting into the following:

(i) Total tax amount from vehicles that can be generated in the future (2015 – 2030) under MOF Draft is estimated to be USD5.1 billion. On the other hand, current tax system can generate USD9.1 billion. MOF Draft generate USD4.0 billion less than



4-33

current system, especially in initial tax.

(ii) All types of vehicles except SUVs are imposed less tax in MOF Draft. Reduction in the taxes for cars is significant.

Table 4.3.20 Estimated Tax Amount for the 2015 – 2030 Period (in USD million)

Vehicle Type Current System (A) MOF Proposal (B) (B) – (A)

Initial Annual1) Total Initial Annual1) Total Initial Annual1) Total

2-Wheel

Motorcycle 209 6 215 72 29 102 -136 23 -113

Scooter 355 7 362 81 32 113 -275 26 -249

Sub-total 564 13 576 153 61 215 -411 49 -362

3- Wheel 0.00 0.02 0.02 0.00 0.21 0.21 0.00 0.19 0.19

Cars

Light 1,644 7 1,650 374 102 476 -1,270 95 -1,174

Medium 2,107 10 2,117 553 145 699 -1,554 136 -1,418

Heavy 701 1 702 474 198 673 -227 197 -30

Sub-total 4,452 18 4,470 1,402 446 1,847 -3,051 428 -2,623

UV

Pick-up 1,400 13 1,413 804 554 1,357 -596 540 -56

Van 494 6 500 316 158 474 -178 153 -26

SUV 487 1 489 413 328 741 -74 327 252

Sub-total 2,382 20 2,402 1,533 1,040 2,573 -849 1,020 171

Truck

Small 100 3 102 21 14 34 -79 11 -68

Medium 228 3 231 74 50 124 -154 47 -107

Large 299 2 300 71 48 119 -228 46 -181

Sub-total 626 8 634 165 112 277 -460 104 -357

Bus

Small 104 2 106 21 11 32 -83 9 -74

Medium 606 3 609 85 47 132 -521 44 -477

Large 328 1 328 40 22 62 -288 21 -267

Sub-total 1,037 6 1,043 145 80 225 -892 75 -818

Total 9,061 64 9,125 3,398 1,739 5,137 -5,663 1,675 -3,988 Source: JICA Study Team 1) Revenue from environmental tax is not considered, because the implementation measure is not clear.

4.62 Although the amount of road user charge increases significantly, which is about USD48 million/year (~LAK378 billion) for the period from 2015 to 2019, this is still insufficient to meet the demand for all national roads considering the unit cost for road maintenance in 2012 is LAK52 million/km.


4-34

4.3.3 Proposed Vehicle Tax System

1) Approach and Considerations

(a) Analytical Framework

4.63 On the basis of discussions held on existing tax system and MOF Draft, a proposal is prepared with considerations of the following;

(i) Taxation system on vehicles will be designed based on principles that is easily understandable to stakeholders.

(ii) Tax rates on different types of vehicles reflects government policy on sustainable transport policy.

(iii) Tax rates are set in a way that appropriate amount of tax revenues can be collected from acquisition and vehicle utilization.

4.64 Proposed approach is composed of the following steps (see Figure 4.3.4).

(i) Categorization of vehicles: While there are and will be so many different types of vehicles and models in the market, it is necessary to classify and group them adequately to facilitate practical application of taxes on specific models of vehicles.

(ii) Setting tax rates for defined category of vehicles: When vehicles are classified appropriately, tax rates will be set for defined categories of vehicles. In setting the rates, principles adopted in a sustainable transport policy will be reflected. For example, priorities may be given to public transport vehicles, low-emission vehicles, etc.

(iii) Estimate of tax amount: Total amount of taxes from vehicles will be estimated based on the forecast number of vehicles for each vehicle type in the future and its corresponding tax rates. Vehicle tax is composed of two types:the firstis to be collected at the time of acquisition of vehicles and the other is to be collected annually over the life of vehicles. In estimating the total amount of taxes to be collected from vehicles, the annual tax must be converted to present values for comparison with today's tax revenue, and that of the future if on the same level.

(iv) Revenue requirement from vehicles: It is necessary to determine the level of tax revenues that can be generated from vehicles on the assumption that vehicles will shoulder the infrastructure costs adequately, such as, roads construction and maintenance. This is based on the rationale that vehicles are the primary beneficiaries of the improvement/development of infrastructure.

(v) Consideration on tax collection system: While initial tax can be collected fully, it may be difficult to collect annual taxes effectively unless current vehicle registration and inspection systems are improved. The costs associated with collection of annual taxes may become higher.



4-35

Source JICA Study Team

Figure 4.3.4 Proposed Framework for Vehicle Taxation

2) Proposed Tax System

(a) Categorization of Vehicles

4.65 Vehicles are classified based on (i) type of vehicles, (ii) value of vehicles, and (iii) usage purpose as explained below.

(i) Vehicle classification by type: It is practical to classify road vehicles by functional characteristics as normally practiced in many countries. The classification is made based on MOF Draft and reference of other countries (see Table 4.3.21). The numbers shown in Table 4.3.21 refer to specific vehicle models shown in Figure 4.3.1 and Figure 4.3.2.

Table 4.3.21 Classification by Vehicle Types

Type Value Group (USD 000) Value (<15) Standard (15-25) Premium (25-35) Luxury (35-60) Executive (60 <)

2-wheel < 125 cc 1, 2 126 – 250 cc 250 cc <

3-wheel Light (<660cc) 3, 4 Small (660cc <)

Sedan & SUV

< 1,000 cc 1,001 – 1,500 cc 1) 5, 6 1,501 – 2,000 cc 8 7 2,001 – 2,500 cc 9 2,501 – 3,000 cc 15, 16 3,001 – 4,000 cc 10, 17 4,001 cc < 18

Van & Pick-up

< 1,000 cc 1,001 – 1,500 cc 1) 1,501 – 2,000 cc 2,001 – 2,500 cc 11 2,501 – 3,000 cc 13, 14

Categorization of Vehicles

Setting Tax Rates by Vehicle Type

Estimated Tax Amount from Vehicles

END

Check

Sustainable Transport

Policy

No. of Vehicles by

Type

Requirement for Revenue

from Vehicles

Tax Collection System

No

Yes


4-36

Type Value Group (USD 000)

Value (<15) Standard (15-25) Premium (25-35) Luxury (35-60) Executive (60 <)

3,001 – 4,000 cc 12

4,001 cc <

Truck 2) Small(GVW 5.0 >) 21

Medium (GVW 5.0 – 8.0) 19 20 22 23, 24

Large (GVW 8.0 – 14)

Extra-large (GVW 14 <) 25

Bus 3) Small (29 pax >) 26

Medium (30 – 49 pax) 27, 28, 29

Large (50 pax <) 30, 31 Source: JICA Study Team worked out based on website of auto manufacturers

1) 1,001 – 2,000cc category is split into 1,001 – 1,500cc and 1,501 – 2,000cc considering the practice of other countries

2) Categorization of truck by GVW is assumed in reference to the practice in Japan

3) Categorization of bus by the number of passenger capacity is assumed in reference to the practice in Japan

(ii) Classification by value: For taxation purpose, it is also reasonable to classify vehicles by value (i.e., CIF price) as is defined MOF Draft (see Table 4.3.22).

Table 4.3.22 Value Group of Vehicles

Classification CIF (USD)

Value < 15,000

Standard 15,000 – 25,000

Premium 25,000 – 35,000

Luxury 35,000 – 60,000

Executive 60,000 <

Source: “DRAFT” Decree of the President of Lao PDR on Vehicle Tax

(iii) Vehicle classification by purpose: It is also practical to classify the vehicles by usage purpose as follows;

Private purpose: relatively higher tax rate will be imposed;

Commercial/business purpose: tax rate lower than private purpose will be imposed, and;

Public purpose: lowest tax rate will be imposed.

(b) Type of Taxes

4.66 It is adequate to broadly classify vehicle tax to those imposed at the time of acquisition and to those imposed during the time of usage. MOF Draft is further elaborated as follows:

(i) Initial tax includes:

Trading tax that will be charged based on CIF price and displacement of vehicles, and;

Goods and service tax that will be charged based on trading tax.

(ii) Annual tax includes:

Excise tax that will be charged based on trading tax, and;

Road user charges (RUC) that will be charged based on GVW of vehicles.

(iii) Environmental tax that will be charged based on CO2 emission level.



4-37

(c) Basic Principles on Tax rate by Vehicle Type

4.67 In order to specify rates for each type of vehicle, the following principles are applied:

(i) Priorities (low tax rates) are given for public transport use both for passengers and cargoes;

(ii) Vehicles for private use shall be charged higher rates than those for commercial/business use;

(iii) Paratransit modes such as Jumbo and Tuktuk shall be encouraged to shift to equivalent types of formally manufactured vehicles;

(iv) Equitable level of taxes shall be imposed among the models within the same category2;

(v) Priorities (low tax rates) are given for low emission vehicles.

(d) Basic Principles on Total Revenues from Vehicle Taxes

4.68 Revenues from vehicle taxes is a very important source for transport sector development. At present, total revenue from vehicle tax is far below the level of requirement for road development. In the proposed system, options regarding expected level of tax revenues are studied. It is proposed that the tax revenues from vehicles and fuels should cover the costs required for maintenance of all types of roads including national, provincial, local and urban.

(e) Assumed Tax Rates

4.69 On the basis of the above specific tax rates are worked out as follows;

(i) Initial tax rates (Trading Tax and Goods/Service Tax): The rates of initial tax are set in a way that the level of tax is not much different compared to those currently imposed (see Table 4.3.23). As the initial tax rates are basically determined on CIF price of vehicles, it is more equitable than the current practice wherein middle price is set for each model without clear basis.

Table 4.3.23 Proposed Tax Rates (Initial Tax: Trading Tax1) and Goods/Service Tax2) for Private Use)

Group

Value Standard Premium Luxury Executive

< USD15,000 USD15,000 – 25,000 USD25,000 – 35,000 USD35,000 – 60,000 USD60,000 <

2 Wheel

< 125cc 3.5 x 1.1

125 – 250cc 3.6 x 1.1

250cc < 3.7 x 1.1

3 Wheel Light (< 660cc) 1/5 x 1.1

Small (660cc <) 1.6 x 1.1

Sedan & SUV

<1,000 cc 6.6 x 1.1 6.7 x 1.1 6.8 x 1.1 6.9 x 1.1 7.0 x 1.1

1,001 – 1,500 cc 6.7 x 1.1 6.8 x 1.1 6.9 x 1.1 7.0 x 1.1 7.1 x 1.1

1,501 – 2,000 cc 6.8 x 1.1 6.9 x 1.1 7.0 x 1.1 7.1 x 1.1 7.2 x 1.1

2,001 – 2,500 cc 6.9 x 1.1 7.0 x 1.1 7.1 x 1.1 7.2 x 1.1 7.3 x 1.1

2,501 – 3,000 cc 7.0 x 1.1 7.1 x 1.1 7.2 x 1.1 7.3 x 1.1 7.4 x 1.1

3,001 – 4,000 cc 7.1 x 1.1 7.2 x 1.1 7.3 x 1.1 7.4 x 1.1 7.5 x 1.1

4,000 cc < 7.2 x 1.1 7.3 x 1.1 7.4 x 1.1 7.5 x 1.1 7.6 x 1.1

Pick-up and Van

<1,000 cc 1.7 x 1.1 1.8 x 1.1 1.9 x 1.1 2.0 x 1.1 2.1 x 1.1

1,001 – 1,500 cc 1.8 x 1.1 1.9 x 1.1 2.0 x 1.1 2.1 x 1.1 2.2 x 1.1

1,501 – 2,000 cc 1.9 x 1.1 2.0 x 1.1 2.1 x 1.1 2.2 x 1.1 2.3 x 1.1

2 At present, some specific models are charged lower rates than others that fall into the same category of vehicles.


4-38

Group



2,001 – 2,500 cc 2.0 x 1.1 2.1 x 1.1 2.2 x 1.1 2.3 x 1.1 2.4 x 1.1

2,501 – 3,000 cc 2.1 x 1.1 2.2 x 1.1 2.3 x 1.1 2.4 x 1.1 2.5 x 1.1

3,001 – 4,000 cc 2.2 x 1.1 2.3 x 1.1 2.4 x 1.1 2.5 x 1.1 2.6 x 1.1

4,000 cc < 2.3 x 1.1 2.4 x 1.1 2.5 x 1.1 2.6 x 1.1 2.7 x 1.1

Goods Transport

Small (GVW 5>) 3.5 x 1.1

Medium (GVW 5-8) 3.6 x 1.1

Large (GVW 8-14) 3.7 x 1.1

Extra-large (GVW 14 <) 3.8 x 1.1

Passenger Transport

Small (29 pax >) 6.9 x 1.1

Medium (30 -49 pax) 7.0 x 1.1

Large (50 pax <) 7.1 x 1.1 Source: JICA Study Team 1) Tax rate (USD/cc) is imposed on displacement size. 2) Tax rate is 10% of trading tax

(ii) Excise tax rates: The rates are set as % to the trading tax for annual payment (see Table 4.3.24).

Table 4.3.24 Proposed Tax Rate1) (Excise Tax for Private Use)

Group



2 & 3 Wheel

< 125cc 1.0

125 – 250cc 1.0

250cc < 1.0

Sedan & SUV

<1,000 cc 2.0 4.0 5.0 6.0 7.0

1,001 – 1,500 cc 2.0 4.0 5.0 6.0 7.0

1,501 – 2,000 cc 2.0 4.0 5.0 6.0 7.0

2,001 – 2,500 cc 2.0 4.0 5.0 6.0 7.0

2,501 – 3,000 cc 2.0 4.0 5.0 6.0 7.0

3,001 – 4,000 cc 2.0 4.0 5.0 6.0 7.0

4,000 cc < 2.0 4.0 5.0 6.0 7.0

Pick-up and Van

<1,000 cc 2.0 3.0 4.0 5.0 6.0

1,001 – 1,500 cc 2.0 3.0 4.0 5.0 6.0

1,501 – 2,000 cc 2.0 3.0 4.0 5.0 6.0

2,001 – 2,500 cc 2.0 3.0 4.0 5.0 6.0

2,501 – 3,000 cc 2.0 3.0 4.0 5.0 6.0

3,001 – 4,000 cc 2.0 3.0 4.0 5.0 6.0

4,000 cc < 2.0 3.0 4.0 5.0 6.0

Goods Transport

Small (GVW 5>) 1.0

Medium (GVW 5-8) 1.0

Large (GVW 8-14) 1.0

Extra-large (GVW 14 <) 1.0

Passenger Transport

Small (29 pax >) 1.0

Medium (30 -49 pax) 1.0

Large (50 pax <) 1.0 Source: JICA Study Team 1) Tax rate is % of the trading tax to be paid annually

(iii) Road user charges (RUCs): The rates are set equitably across different types of vehicles in accordance to GVW (see Table 4.3.25).

Table 4.3.25 Proposed Tax Rate1) (Road User Charge) Tax Rate

All Vehicles 0.3 USD/kg

Source: JICA Study Team 1) rate to GVW.

(iv) Environmental tax: The rates are set equitably across different types of vehicles in



4-39

accordance to the rate of CO2 emission (see Table 4.3.26).

Table 4.3.26 Proposed Tax Rate1) (Environmental Tax) Tax rate (USD/g/km)

2 Wheel 3.8

3 Wheel 1.4

Sedan 1.2

SUV 1.2

Pick-up 1.2

Van 0.5

Goods Transport

Small 2.0

Medium 3.0

Large 3.0

Extra-large 3.0

Passenger Transport

Small 0.3

Medium 0.2

Large 0.1 Source: JICA Study Team

1) Rate to CO2 emission. Tax rate is determined based on the number of passenger capacity and the average driving distance per year.

(v) Priority and incentives for vehicles types and use: On the basis of sustainable transport policy, it is assumed that priorities and incentives are given to commercial/public use (see Table 4.3.27). However, it is assumed that the incentive rates are limited to trading tax and excise tax. Goods and service tax, road user charge and environmental tax are applied to all types of vehicles.

Table 4.3.27 Proposed Adjustment Rate in Trading Tax and Excise Tax for Private, Commercial and Public Use

Purpose of Use Ratio

Private 1.00

Commercial 0.50

Public 0.25


3) Estimated Tax Amount

(a) Estimated Number of Vehicles

4.70 The number of vehicles in the future is further estimated by purpose of use (private, commercial and public) (see Table 4.3.28)

Table 4.3.28 Share of No. of Vehicles by Purpose of Use

Share by Purpose of Use (%)

Private Commercial Public

2Wheel

< 125cc 100 - -

125 – 250cc 100 - -

250cc < 100 - -

3 Wheel

< 125cc - 100 -

125 – 250cc - 100 -

250cc < - 100 -

Sedan

<1,000 cc 95 5 -

1,001 – 1,500 cc 95 5 -

1,501 – 2,000 cc 95 5 -

2,001 – 2,500 cc 95 5 -

2,501 – 3,000 cc 95 5 -

3,001 – 4,000 cc 95 5 -

4,000 cc < 95 5 -

SUV <1,000 cc 95 5 -


4-40

Share by Purpose of Use (%)

Private Commercial Public

1,001 – 1,500 cc 95 5 -

1,501 – 2,000 cc 95 5 -

2,001 – 2,500 cc 95 5 -

2,501 – 3,000 cc 95 5 -

3,001 – 4,000 cc 95 5 -

4,000 cc < 95 5 -

Pick-up

<1,000 cc 90 10 -

1,001 – 1,500 cc 90 10 -

1,501 – 2,000 cc 90 10 -

2,001 – 2,500 cc 90 10 -

2,501 – 3,000 cc 90 10 -

3,001 – 4,000 cc 90 10 -

4,000 cc < 90 10 -

Van

<1,000 cc 30 70 -

1,001 – 1,500 cc 30 70 -

1,501 – 2,000 cc 30 70 -

2,001 – 2,500 cc 30 70 -

2,501 – 3,000 cc 30 70 -

3,001 – 4,000 cc 30 70 -

4,000 cc < 30 70 -

Goods Transport

Small (GVW 5>) 70 30 -

Medium (GVW 5-8) 70 30 -

Large (GVW 8-14) 70 30 -

Extra-large (GVW 14 <) 10 90 -

Passenger Transport

Small (29 pax >) 30 50 20

Medium (30 -49 pax) 10 50 40

Large (50 pax <) 10 50 40


(b) Estimated Tax Revenue

(i) Tax Revenue by Tax Category: Total tax revenue to be collected from 2015 to 2030 is USD 44.0 billion at current price or USD 22.0 billion at present value that is estimated by applying a discount rate of 8%/year on future revenues. Main sources of tax revenue are trading tax and RUC (see Table 4.3.29).

Table 4.3.29 Tax Revenue by Tax Category

Tax Revenue @ Current Price Tax Revenue @ Present Value 1)

2015-2019 2020 - 2024 2025 - 2030 Total 2015-2019 2020 - 2024 2025 - 2030 Total

Revenue @

Proposed System (USD mil.)

Trading Tax 3,818 4,862 8,660 17,340 2,987 2,614 3,034 8,635

Goods Tax 382 486 866 1,734 299 261 303 864

Excise Tax 719 1,188 2,151 4,058 563 638 756 1,958

RUC 2,766 3,894 6,477 13,137 2,183 2,098 2,281 6,562

Environment 1,794 2,345 3,571 7,710 1,419 1,267 1,262 3,948

Total 9,479 12,775 21,725 43,980 7,450 6,879 7,637 21,967

Share (%)

Trading Tax 40.3 38.1 39.9 39.4 40.1 38.0 39.7 39.3

Goods Tax 4.0 3.8 4.0 3.9 4.0 3.8 4.0 3.9

Excise Tax 7.6 9.3 9.9 9.2 7.6 9.3 9.9 8.9

RUC 29.2 30.5 29.8 29.9 29.3 30.5 29.9 29.9

Environment 18.9 18.4 16.4 17.5 19.0 18.4 16.5 18.0

Total 100 100 100 100 100 100 100 100

Source: JICA Study Team 1) The amount is calculated annually over the lifecycle and estimated at present value based on a discount rate of 8%/year.



4-41

(ii) Tax Revenue Share by Vehicle Type: Of the total tax revenue, car shares 39.0%, followed by UV (26.9%), 2-3 wheeler (14.1%), truck (11.1%) and bus (8.9%) (see Table 4.3.30).

Table 4.3.30 Tax Revenue Share by Vehicle Type 2015-2019 2020 - 2024 2025 - 2030 Total

Tax Revenue Share by

Vehicle Type (%)

2-3Wheel 17.0 14.8 12.5 14.1

Cars 32.7 37.7 42.5 39.0

UV 29.2 27.3 25.6 26.9

Truck 13.7 10.7 10.1 11.1

Bus 7.5 9.4 9.3 8.9

Total 100 100 100 100 Source: JICA Study Team

4) Comparison with Current System and MOF Draft

4.71 Tax revenues among “current system”, “MOF Draft” and “proposed system” are compared (see Table 4.3.31). Tax revenues of the proposed system are characterized as follows:

(i) Total revenue of the proposed system is approximately double compared to that of the current system;

(ii) The level of initial tax is more or less the same between the two, and;

(iii) Main source of the proposed tax revenue includes trading tax and RUC.

Table 4.3.31 Comparison of Tax Revenues (2015 – 2030) for each Tax Category (Between Current, MOF Draft and Proposed)

Current System MOF Draft Proposed

Revenue @ Present Value

(USD mil.)

Initial Import Tax/Trading Tax 2,732 3,089 8,635

Excise Tax 4,491 - -

VAT/ Goods Tax 1,838 309 864

Annual1) Excise Tax - 1,594 1,958

RUC 64 145 6,562

Environmental Tax - - 3,948

Total 9,125 5,137 21,967

Share (%)

Initial Import Tax/Trading Tax 29.9 60.1 39.3

Excise Tax 49.2 - -

VAT/ Goods Tax 20.1 6.0 3.9

Annual Excise Tax - 31.0 8.9

RUC 0.7 2.8 29.9

Environmental Tax - - 18.0

Total 100 100 100


4.72 Tax revenue of the proposed system is further estimated for each vehicle type comparing those of current system and MOF Draft.


4-42

Table 4.3.32 Comparison of Tax Revenues for each Vehicle Type (Between Current, MOF Draft and Proposed)

Vehicle Type Current System (A) MOF Draft (B) Proposed (C)


2-Wheel

Motorcycle 209 6 215 72 29 102 254 1,370 1,623

Scooter 355 7 362 81 32 113 282 1,348 1,630

Sub-total 564 13 576 153 61 215 536 2,718 3,254

3 Wheels 0 0.02 0.02 0 0.21 0.21 0 7 7

Cars

Light 1,644 7 1,650 374 102 476 2,037 944 2,981

Medium 2,107 10 2,117 553 145 699 2,830 1,307 4,137

Heavy 701 1 702 474 198 673 690 420 1,110

Sub-total 4,452 18 4,470 1,402 446 1,847 5,557 2,671 8,228

UV

Pick-up 1,400 13 1,413 804 554 1,357 1,329 2,290 3,619

Van 494 6 500 316 158 474 398 834 1,232

SUV 487 1 489 413 328 741 551 617 1,167

Sub-total 2,382 20 2,402 1,533 1,040 2,573 2,277 3,741 6,018

Truck

Small 100 3 102 21 14 34 94 395 490

Medium 228 3 231 74 50 124 181 645 826

Large 299 2 300 71 48 119 176 1,052 1,227

Sub-total 626 8 634 165 112 277 451 2,092 2,543

Bus

Small 104 2 106 21 11 32 283 479 763

Medium 606 3 609 85 47 132 267 531 799

Large 328 1 328 40 22 62 127 229 355

Sub-total 1,037 6 1,043 145 80 225 677 1,239 1,916

Total 9,061 64 9,125 3,398 1,739 5,137 9,499 12,468 21,967


5) Proposed Tax Rates on EVs

4.73 On the basis of the above tax system on vehicles, it is proposed to adopt the following tax rates on EVs;

(i) EVs will be exempted from "trading tax", "good and service tax" and "excise tax" at least for five to ten years to promote a low-emission transport, especially EVs;

(ii) EVs will be exempted from "environmental tax" automatically due to lower CO2 emission;

(iii) However, "road user charges" should also be imposed on EVs because they also use infrastructure as with other types of vehicles.

4.74 On the basis of the above assumptions, taxes are calculated for selected models of each vehicle category of ICEs and corresponding EVs (see Table 4.3.33). This indicates an explicit advantage in using EVs for all types of vehicles.



4-43

Table 4.3.33 Comparison of Tax Amount between ICE Vehicles and EVs

Category Selected Model Current System (A) MOF Draft (B) JST Proposal (C)

(C)/(A) (C)/(B) (B)/(A) Initial Annual1) Total Initial Annual1) Total Initial Annual1) Total

2-Wheel

ICE 1. HONDA Wave 100 307 5 312 107 29 136 373 1,381 1,755 5.6 12.9 0.4

2. HONDA Click 523 5 528 119 33 151 416 1,359 1,775 3.4 11.7 0.3

EV 1. Terra Motors SEED 45 199 5 204 9 2 11 0 173 173 0.8 16.2 0.1

2. Terra Motors SEED 60 299 5 304 9 2 11 0 197 197 0.6 18.5 0.0

3-Wheel

ICE 3. Jumbo 271 12 284 138 38 175 206 2,851 3,057 10.8 17.4 0.6

4. Tuktuk 456 12 468 550 151 701 825 3,191 4,016 8.6 5.7 1.5

EV 13. Terra Motors E-trike 2,170 8 2,178 103 22 125 0 1,007 1,007 0.5 8.1 0.1

14. Pro Staff Pecolo 3,906 8 3,914 72 15 87 0 966 966 0.2 11.1 0.0

Car

Small

ICE 5. Toyota Yaris 10,985 39 11,024 1,977 610 2,587 11,040 5,901 16,941 1.5 6.5 0.2

6. Hyundai I 10.1 3,996 15 4,011 1,434 442 1,875 8,004 3,936 11,940 3.0 6.4 0.5

EV

19. Mitsubishi i-MiEV G 19,877 15 19,892 1,283 396 1,679 0 2,510 2,510 0.1 1.5 0.1

20. Mazda Demio EV 25,779 15 25,794 4,950 2,204 7,154 0 2,668 2,668 0.1 0.4 0.3

21. HONDA Fit EV 30,269 15 30,284 6,072 2,288 8,360 0 3,323 3,323 0.1 0.4 0.3

Medium ICE

7. Honda Civic 1.8ivtec 13,604 39 13,644 2,769 854 3,623 13,647 7,970 21,617 1.6 6.0 0.3

8. Hyundai Elantra 4,946 39 4,985 2,100 647 2,748 11,901 5,718 17,619 3.5 6.4 0.6

EV 22. Nissan Leaf 21,544 15 21,559 4,107 1,547 5,654 0 3,855 3,855 0.2 0.7 0.3

UV

Van

ICE 13. Toyota HiAce 6,920 39 6,960 4,100 1,826 5,926 7,216 8,194 15,411 2.2 2.6 0.9

14. Hyundai Starex H-1 4,412 39 4,451 2,747 1,035 3,782 6,043 8,322 14,365 3.2 3.8 0.8

EV 23. Mitsubishi MINICAB-MiEV 9,197 15 9,212 917 283 1,199 0 2,532 2,532 0.3 2.1 0.1

23. Nissan e-NV 200 0 - - 5,280 2,351 7,631 0 - - - - -

SUV ICE

15. Toyota Fortuner 1KD 20,077 39 20,116 14,761 6,573 21,334 23,617 15,597 39,214 1.9 1.8 1.1

16. Kia Mohave 3.8L LX 9,196 39 9,235 14,647 6,523 21,170 23,435 17,785 41,221 4.5 1.9 2.3

17. Toyota Prado VX 29,152 39 29,191 23,934 12,298 36,232 32,202 22,755 54,957 1.9 1.5 1.2

18. Land Cruiser LC200 MT 42,094 39 42,133 31,896 18,574 50,470 37,294 28,289 65,583 1.6 1.3 1.2

EV 24. Toyota RAV4EV 37,334 15 37,349 8,433 3,755 12,189 0 11,315 11,315 0.3 0.9 0.3

Truck Small

ICE

19. Kia K2700 1,431 95 1,526 574 214 788 10,037 15,117 25,154 16.5 31.9 0.5

20. Mitsubishi Canter 8,802 95 8,897 1,649 2,264 3,913 11,542 17,052 28,595 3.2 7.3 0.4

21. Isuzu Elf 12,504 95 12,599 2,474 923 3,397 11,546 18,411 29,957 2.4 8.8 0.3

EV 25. Mitsubishi MINICAB-MiEV TRUCK

5,091 95 5,186 110 41 151 0 2,545 2,545 0.5 16.8 0.0

Bus

Small

ICE 26. Hyundai County 6,517 71 6,588 1,289 481 1,770 29,654 21,633 51,287 7.8 29.0 0.3

EV

26. Yunnan Taixing Minning Company YJ_T_4B (VCSBE)

2,576 54 2,630 13 5 18 0 5,117 5,117 1.9 282.3 0.0

27. Yunnan Taixing Minning Company YJ_T_IDF (VCSBE)

3,450 54 3,504 22 8 30 0 5,309 5,309 1.5 175.7 0.0

28. Think Together e-COM8 38,623 54 38,677 88 33 121 0 4,460 4,460 0.1 36.9 0.0

Medium

ICE

27. Mitsubishi Rosa 18,662 95 18,757 3,298 1,231 4,528 23,085 18,725 41,809 2.2 9.2 0.2

28. Hino Melpha 49,151 95 49,246 7,043 2,628 9,672 49,303 30,814 80,117 1.6 8.3 0.2

29. Hino Poncho 46,268 107 46,375 5,635 2,103 7,738 39,447 24,787 64,234 1.4 8.3 0.2

EV

28. Waseda WEB 3 190,479 95 190,574 744 278 1,022 0 17,596 17,596 0.1 17.2 0.0

29. Isuzu ELEMO-AKITA 0 10 - 770 287 1,057 0 22,467 22,467 - 21.2 -

30. BYD K9 70,949 95 71,044 924 345 1,269 0 49,257 49,257 0.7 38.8 0.0

Source: JICA Study Team 1) the amount is calculated annually over the lifecycle and estimated at present value based on discount rate of 8%/year.


4-44

Table 4.3.34 Comparison of Lifecycle Cost between ICE Vehicles and EVs

Category Selected Model Current System (A) MOF Draft (B) JST Proposal (C)


2-Wheel

ICE 1. HONDA Wave 100 1,599 2,607 4,206 1,399 2,631 4,030 1,665 3,983 5,648

2. HONDA Click 2,723 2,607 5,330 2,319 2,635 4,953 2,616 3,961 6,577

EV 1. Terra Motors SEED 45 1,255 803 2,058 1,064 800 1,864 1,055 971 2,027

2. Terra Motors SEED 60 1,883 803 2,686 1,593 800 2,393 1,584 996 2,580

Total Lifecycle Cost of EV/Total Lifecycle Cost of ICE 0.4 - 0.6 0.4 - 0.6 0.3 - 0.5

3-Wheel

ICE 3. Jumbo 959 18,258 19,217 826 18,284 19,109 894 21,097 21,991

4. Tuktuk 1,612 18,258 19,870 1,706 18,397 20,103 1,981 21,437 23,418

EV 13. Terra Motors E-trike 7,670 1,801 9,471 5,603 1,815 7,418 5,500 2,800 8,300

14. Pro Staff Pecolo 13,806 1,801 15,607 9,972 1,809 11,781 9,900 2,760 12,660


Car

Small

ICE 5. Toyota Yaris 26,895 17,493 44,389 17,888 18,064 35,952 26,951 23,355 50,306

6. Hyundai I 10.1 16,096 17,469 33,565 13,534 17,896 31,430 20,104 21,391 41,494

EV

19. Mitsubishi i-MiEV G 50,555 6,919 57,474 31,961 7,299 39,261 30,678 9,413 40,091

20. Mazda Demio EV 63,604 6,919 70,523 42,775 9,108 51,883 37,825 9,572 47,397

21. HONDA Fit EV 74,682 6,919 81,601 50,485 9,192 59,677 44,413 10,227 54,640

Total Lifecycle Cost of EV/Total Lifecycle Cost of ICE 1.3 - 2.1 1.1 - .17 0.8 - 1.1

Medium ICE

7. Honda Civic 1.8ivtec 37,804 17,493 55,297 26,969 18,308 45,277 37,847 25,424 63,271

8. Hyundai Elantra 17,046 17,493 34,539 14,200 18,102 32,302 24,001 23,173 47,173

EV 22. Nissan Leaf 53,155 6,919 60,074 35,718 8,451 44,169 31,611 10,758 42,369


UV

Van ICE

13. Toyota HiAce 28,744 17,493 46,237 25,924 19,280 45,204 29,040 25,648 54,689

14. Hyundai Starex H-1 25,312 17,493 42,805 23,647 18,489 42,136 26,943 25,776 52,719

EV 23. Mitsubishi MINICAB-MiEV 40,614 6,919 47,532 32,334 7,186 39,520 31,417 9,436 40,853

Total Lifecycle Cost of EV/Total Lifecycle Cost of ICE 1.0 - 1.1 0.9 0.7 - 0.8

SUV ICE

15. Toyota Fortuner 1KD 51,182 17,493 68,675 45,866 24,028 69,893 54,722 33,051 87,773

16. Kia Mohave 3.8L LX 42,196 17,493 59,689 47,647 23,977 71,624 56,435 35,240 91,675

17. Toyota Prado VX 81,137 17,493 98,630 75,919 29,752 105,671 84,187 40,209 124,396

18. Land Cruiser LC200 MT 108,128 17,493 125,621 97,930 36,029 133,959 103,328 45,744 149,072

EV 24. Toyota RAV4EV 92,114 6,919 99,033 63,213 10,659 73,873 54,780 18,219 72,999


Bus Small

ICE 26. Hyundai County 29,617 37,306 66,923 24,389 37,716 62,105 52,754 58,868 111,622

EV

26. Yunnan Taixing Minning Company YJ_T_4B (VCSBE)

11,376 10,769 22,145 8,813 10,720 19,533 8,800 15,833 24,633

27. Yunnan Taixing Minning Company YJ_T_IDF (VCSBE)

15,236 10,769 26,005 11,808 10,723 22,531 11,786 16,024 27,810

28. Think Together e-COM8 170,566 10,769 181,335 132,031 10,748 142,779 131,943 15,176 147,119


Source: JICA Study Team 1) the amount is calculated annually over the lifecycle and estimated at present value based on discount rate of 8%/year.



4-45

4.4 EV Infrastructure Development

1) General

4.75 In order to promote acceptance and deployment of EVs, it is imperative that plugs, chargers and EVs be interoperable. EV owners must be able to easily recharge their vehicles at their homes or destinations when traveling. The destinations include offices, schools, commercial facilities, parking areas, gas stations and others.

4.76 In order to plan the installation locations of charging stations and its associated facilities, it is important to consider the relation between the location and the charging circumstances. While charging at public places are classified into three: charging at destination, charging along the route, and emergency charging, basically, EVs should be charged at private places such as at the EV user's home.

4.77 There is mainly one type of charger for e-motorcycle, and two types of chargers for other EVs (normal charger and fast charger). The charging times are about eight hours by normal charger and about 30 minutes by fast charger. Due to the difference in charging time, normal and fast chargers would be used at home and destination, respectively.

4.78 For the EV charging infrastructure development, issues on charging system, infrastructure installation and infrastructure communication need to be addressed.

2) Charging System

(a) Standardization of Charging System

4.79 Charging system is standardized by each country. And International harmonization of standards and regulations is still in progress. The outlines of these standards are as follows:

(i) Level: Charging level is categorized into 3 types: Slow charge (Level 1); Normal charge (Level 2), and; Fast charge (Level 3). Home charge and convenient charge is categorized under Level 2. Fast charge is used for emergency purpose and Slow charge (Level 1) is only used for lightweight EVs such as E-bikes.

(ii) Equipment: Two types of charging equipment exist. One is an on-board charger and the other is an off-board charger. While majority of the normal chargers use on-board chargers, most fast chargers use the off-board charger.

(iii) Connector: Dedicated connectors of EVs are used for Level 2 and Level 3 charging. These connectors are standardized within each country and compatibility among different types of vehicle is guaranteed. Level 2 connector is standardized by SAE 1772 in US and Japan. However, other connectors have not been harmonized yet.

(iv) Safety: There are several regulations and safety standards for charging. The electric vehicle supply equipment (EVSE) contains a ground fault circuit interruption (GFCI) and a detection of perfect connecting equipment, which is mandatory. This equipment is installed at the wall mount power supply or attached at the charging cable.

(v) Emerging technology: Current charging technology uses the conventional method, i.e. wired chargers. In the near future, inductive wireless charging will become familiar.

(b) Power Supply Lines for EV Charging Stations

4.80 Supply of power lines to the proposed charging site is the responsibility of the


4-46

Ministry of Energy and Mines (MEM). The jurisdiction of the MEM on the power supply for EVs covers the supply of power lines, the transformer, the protective device and distribution devices to the point where the outlet is to supply to a final charger used to recharge battery used in the EV.

4.81 Required power line extension is 20kV with no less than 500 kVA loading to the point of proposed charging station. EV host may be charged for the material cost for normal installation of the power line, including the cost to install the support posts and the cable. However, the use of land including easement rights by the power line extension and the transformer site will be provided by the government.

4.82 Providers of EV charging devices will be responsible in providing all certified parts and components including transformer, protective breakers and distribution boxes whose quality shall be in compliance with the standards set by the government.

4.83 Any certified electrical contractor can be hired to install transformers and protective devices in consideration of its cost-competitiveness and service quality. A circuit diagram, indicating the specifications of protective and distribution device will have to be filed by the provider to the local government before installation. After device installation, the government will conduct testing and inspection service to the installed device and will commence connecting the device with the power line. The inspection and connection service by the government will be charged at a cost of no more than USD 200 per service hour.

(c) Technical Requirement of EV Charging Devices

4.84 Qualified suppliers of EV charging devices must have attained a solid background in supplying similar charging products. Specifically, the suppliers should have been in the charging device business for no less than five years, and should have received approval listings on not less than five battery charging device models from United States, Canada, Australia, EU, Japan or China.

4.85 Qualified suppliers should have a permanent office in Lao PDR that is capable of rendering after-sales service to the EV program.

4.86 It is the jurisdiction of the Ministry of Public Works and Transport (MPWT) to regulate battery charging devices and its operation, when such devices or its installation are intended to be used for recharging battery of EVs. Safety components, including cables, shells, breakers, insulation system, switches, warning content, connectors, used in the charging device must be certified component by any of the Country of Reference3 in its corresponding class and rating.

4.87 The battery charging device of the EV is considered to be an indoor industry. The adoption of testing and approval standards of the charging device will take reference of indoor industry. Required testing for charging deceives are as follows4;

(i) Physical Protection Test: The charging device should provide protection to people and property around it. No live part could be reached by user without the aid of any device or tool. Output and input cable attachment to the charging device have to be protected by brushing or stress-relieving devices, which would pass the pulling test of similar class of charging device of the Country of Reference.

3United States, Canada, Australia, EU, Japan or China. 4 Referring USA UL Standard 1564, 1310, 1236 etc.



4-47

(ii) Maximum Temperature Rise Test: When a charging device is connected to a regulated load with an output draw of 120% of the maximum rated output of charging capacity, the overload circuit breaker of devices are disengaged. A temperature sensing device is connected to a spot of the highest temperature around the transformer, diode, heat sink and internal components of the charging device. The temperature difference between the room temperature before the text and the highest temperature taken from the charging device must be within the allowable range in the safety standards.

(iii) Performance and Breaker Test: The charging device should be tested for proper protection against dangerous shorts occurring during incidents of flat battery or accidental watering around the charging system. The charging device is connected to the main, and its output is connected to a variable load that is adjusted to110% of its maximum output draw. The load will remain for two hours, and the charging device shall perform normally without any disruption to its functions. The variable load will then be adjusted to 120% of its maximum output draw and will stay at that point. A protection device such as fuse or circuit breaker at the secondary side of the charging device will be actuated within 15 seconds. No voltage flow should be detected at the secondary output of the charging device. Upon completion of the test, the said breaker or fuse should be capable of resuming normal operation.

(iv) Hi-pot Test: The charging device will be tested for its dielectric insulation by applying a variable high voltage tester. The insulation capacity of the charging device between the input and output ends, input end and the protective shell, and the output end and the protective shell will be tested. The testing parameters will be within the standards.

(v) Short Circuit Test: When the charging device is connected to the main, a short is applied between the positive and the negative output at the secondary side, a fuse or breaker device in the secondary circuit of the charger must be actuated. So, no output voltage could be further detected at the output connector. Upon completion of the test, the said breaker or fuse should be capable of either automatically resetting itself or be manually resettable by a simple button pressing action of the user. The charging device should be capable of resuming normal charging function.

(vi) Unstable Voltage Protection Test: The charging device should be designed to provide proper protection against unstable input voltage. For the first test, the charging device will be connected to a voltage regulator at its input end. The inputting voltage is regulated to more than 120% of its rated input voltage. The control circuit of the charging device should automatically suspend its normal operation and provide a visible warning signal. Upon resumption of normal incoming voltage, the charging device should automatically return to regular charging performance. Another test is regulating the input voltage to less than 80% of the charging device's rated input voltage. The control circuit should behave in the same manner as the first test.

(d) Battery Supply and Recycle

4.88 There are mainly two types of batteries. One is lead acid battery and the other one is lithium ion (Li-ion) battery. While most of e-motorcycles and small types of EVs are still using lead acid batteries, e-cars use Li-ion batteries. Since more e-motorcycles are expected to be introduced in the short-term, it is practical to develop recycling and disposal facilities in Lao PDR. On the other hand, introducing e-cars with Li-ion batteries in Lao PDR may still take time. Thus, it is advisable to let EV dealers collect used Li-ion


4-48

batteries and recycle them in other countries (see Figure 4.4.1).

4.89 The government should strictly require the EV dealer and EV battery supplier to collect and/or recycle at least 90% of battery from sold EVs. Government should audit the number of battery being made and the number of collected/recycled battery on a yearly basis to protect the environment.

4.90 In order to avoid the unlawful dumping of EV batteries, the following countermeasures can be considered:

(i) For replacement of batteries: The new batteries will be provided only by exchanging with used batteries.

(ii) For disposal of EVs: Removal service of EV batteries will be provided by free of charge. Or, EV users will pay some deposit for EV battery disposal. When EV batteries are disposed properly, the deposit will be returned to EV users. However, in both cases, the scrapped system and cancelation of registration for vehicles needs to be developed in Lao PDR.


Figure 4.4.1 Laws Disposal Flow of EV Batteries

4.91 For recycling lead acid batteries, the qualified EV battery supplier shall have the duty to establish a smelter within Lao PDR to recycle retired EV battery. The government grants the business license for this smelter operation. The smelter should be operated after a proper environmental impact assessment (EIA) has been conducted and with stringent environmental management plan (EMP) in place. There are some considerations for a smelter operation in Lao PDR as follows;

(i) Location of smelter: The location of the smelter could either be within the battery manufacturing site or could be at a separate location where the battery supplier may be accommodated. The smelter operator is required to provide a coordinated recycle system which will collect no less than 95% of the battery supplied to the EV market by the battery supplier. The system will require the battery supplier to handle the retired battery collection service without any charge to consumers at each EV battery retail point.

Used Battery Battery SupplierEV Dealers Transport Smelter in Lao PDR

Recycled LeadRecycled Plastics

Final Disposal

Lead Acid Battery

EV Users

Wrecker

EV Dealers

Li-ion Battery

EV Users

Wrecker Used Battery

Recycle in other countries

Reuse in Lao PDR/other courtiers



4-49

(ii) Monitoring of smelter operation: The contractor will be responsible to collect samples of solid discharge, vapor discharge and liquid discharge from the smelter quarterly for monitoring purpose. Therefore, samples shall be collected by an outsider (e.g., government officer) during normal operation time. Specifically, samples of trash to be discharged from the smelter, air and underground water shall be collected within a 50-meter distance from all four directions of the smelter. The sample of discharge water collected at the closest man-hole of the sewage outside the smelter will be tested by the contractor either in Lao PDR or in Reference Countries. The content of lead, other kinds of heavy metal and acid in the samples should be within industrial standards of Lao PDR or of Reference Countries.

(iii) Worker protection: In order to protect the workers at the smelter, a contractor will pick 10% of the smelter workers randomly every year for a blood test of lead content. The report of the blood test shall comply with similar employee safety standard in a similar industry.

(iv) Public involvement: The smelter will arrange a town meeting every year with village leaders, township mayors, district governors within a 1-kilometer radius of the smelter, and address their concerns of possible environmental impact to the surrounding community. Minutes of the meeting will be reported to the MONRE for their monitoring.

3) Infrastructure Installation

(a) Location of EV Charging Stations

4.92 According to the rough guidelines based on international experience, 1.7 normal charger should be provided for an EV. One is a home charger and 0.7 is a public charger. The location of public chargers should be considered based on customer demands. Ideally it should be located in the office parking for EV commuters, and the major public parking lot most of the EV customers use. 0.03 unit fast chargers will be enough for an EV. The location of the fast charger will be the parking area of the main route for long trips. Based on these assumptions, the total numbers of required chargers in Lao PDR are 3,371 by 2015, 104,902 by 2020 and 862,769 by 2030 (see Table 4.4.1). E-motorcycles can be charged by the existing power outlet, so no special chargers is required. However, in order to charge e-motorcycles safely, the power supply system, especially the installation of power outlets, should be inspected.

4.93 The installation cost of chargers depends on the charger type and situation of the installation site. In general, a wall type is selected for homes while a pole type is installed for public spaces. The installation cost for both is roughly USD 2,500 for home and USD 5,700 for public space (see Table 4.4.2).

Table 4.4.1 Required No. of Charging Stations

Type of Vehicle No. of Vehicle No. of Charging Stations at Home No. of Charging Stations at Destination

2015 2020 2030 2015 2020 2030 2015 2020 2030

MC 109,327 697,660 1,875,194 - - - - - -

Car - 7,737 87,468 - 7,737 87,468 - 5,416 61,228

LCV - 37,251 366,389 - 37,251 366,389 - 26,075 256,472

Trucks - - - - - - - - -

Tuktuk/ Minibus (12 pax)

1,983 11,961 15,311 1,983 11,961 15,311 1,388 8,372 10,718

Medium bus/Songthaew - 3,743 33,518 - 3,743 33,518 - 2,620 23,462


4-50

Type of Vehicle No. of Vehicle No. of Charging Stations at Home No. of Charging Stations at Destination

2015 2020 2030 2015 2020 2030 2015 2020 2030

(25 pax)

Bus (50 pax) - 539 4,826 - 539 4,826 - 377 3,378

Total 111,310 758,891 2,382,705 1,983 61,231 507,511 1,388 42,861 355,258


Table 4.4.2 Installation Cost of Charging Stations

Type of Vehicle At Home (million USD) At Destination (million USD) Total (million USD)

2015 2020 2030 2015 2020 2030 2015 2020 2030

MC 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Car 0.0 11.6 131.2 0.0 19.0 214.3 0.0 30.6 345.5

LCV 0.0 55.9 549.6 0.0 91.3 897.7 0.0 147.1 1,447.2

Trucks 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Tuktuk/ Minibus (12 pax) 3.0 17.9 23.0 4.9 29.3 37.5 7.8 47.2 60.5

Medium bus/Songthaew (25 pax)

0.0 5.6 50.3 0.0 9.2 82.1 0.0 14.8 132.4

Bus (50 pax) 0.0 0.8 7.2 0.0 1.3 11.8 0.0 2.1 19.1

Total 3.0 91.8 761.3 4.9 150.0 1,243.4 7.8 241.9 2,004.7


4.94 The expected charging type by locations is shown in Table 4.4.3. At the early stage, EV charging and parking space will be provided through institutions supporting EV promotion, such as governments, schools, hospitals and so on. Non-EV users will not be allowed to use these charging/parking space, which will serve as an incentive for EV users.

Table 4.4.3 Charging Type and Installation Location

Types of Chargers

Normal Charger Fast Charger

Without charging cable With charging cable

Expected Installation Site (example)

Private Detached house, condominium, building, outdoor parking, etc.

(only limited areas)

Public At destination Public facilities, commercial facilities, public parking, etc. (only limited areas)

Along routes Convenience store, commercial facilities, etc. Commercial facilities, gas stations, car dealers, etc.

For emergency Car dealer, convenience store, gas stations, etc. Car dealer, gas station, etc.

Cost of Chargers (excluding installation cost)

Ranging from 35 USD to 9,000 USD Ranging from 500 USD to 2,000 USD

More than 13,000 USD


4.95 After identifying the type of chargers to install, the next step is to identify where to install the chargers. For private use, it is relatively easy to decide, because the charger can be installed in the garage or parking space. On the other hand, for public use, the installation location will be determined by the expected users and the demand of EV users. For construction, the owner of the EV charger may need to work with an electric constructor and/or EDL (see Figure 4.4.2).



4-51

Source: Guidebook for installing chargers of EV/PHEV (METI & MLIT, 2012)

Figure 4.4.2 Installation Procedures of EV Chargers

4.96 At the installation point, the safety of the facility and of people should be considered as follows:

(i) Safety for the facility: The charging device should be located under a roof and be protected from weather and flood. The facility must be well-ventilated, shaded, dry and clean. As well, the output and input cable should be protected from long term exposure to sunlight and flood.

(ii) Safety for people: In order to keep people safe, a highly visible warning sign with a message to the effect of "Danger - High voltage charger in operation, risk of electric shock, keep away" should be posted in clear view outside the charging facility.

(b) Electricity Cost for EV Charging

4.97 One of the advantages of EVs is the low operating cost. This is realized because the electric tariff is much lower than fuel cost. Therefore, the low electric tariff should be kept, especially for EV charging (e.g. no more than 0.05 USD/kWh). At the early stage, in order to promote EVs, EV users can be allowed to use public chargers free of charge.

(c) Training for Users

4.98 Suppliers of EVs, including battery suppliers and battery charger suppliers, should provide adequate training to EV users on the safe and proper use of EVs and EV chargers. This could involve the simple provision of a self-help training DVD on battery maintenance for EV users; or a full series of class-type trainings on the regular mechanics of EV battery maintenance for e-trikes and e-buses.

4) Infrastructure Communication

4.99 The electric vehicle can take an important role in load leveling, as it can function as grid energy storage for a smart city. This technology is called V2H and V2G.

Private Charger Public Charger

Step 1: Building owner decides the location to install an EV charger.

Step 2: Building owner decides the type of EV charger.

Step 3: Building owner check the contracted capacity of electric supply.

Step 4: Building consults with electric constructor.

Step 5: Building consults with EDL if necessary.

Step 1: Expected users of installed EV chargers will be identified.

Step 2: The type of EV charger will be identified.

Step 3: The installation location will be identified.

Step 4: Wiring route will be considered.

Step 5: After checking the existing facility capacity, necessity of increase in transformer capacity and change of contracted capacity of electric supply will be clarified.


4-52

(i) V2H: V2H (Vehicle to Home) connects the EV to the home wiring system. The customer charges the vehicle at night or during the low demand time period, and can use the stored energy during peak demand periods. In this way, household energy can be leveled. This methodology will also be beneficial in times when electric power shuts down.

(ii) V2G: V2G (Vehicle to Grid) connects the vehicle to the smart grid. An electric power company controls the charging and discharging of electric vehicles to optimize the grid load balance. This would be a very good solution for the smart grid, but necessitates the establishment of several rules and standards. The standardization activity is currently in progress.

Source: US patent 6104160

Figure 4.4.3 V2H Block diagram



4-53

4.5 Information and Education Campaign

1) Considerations and Approach

4.100 The introduction of EVs in Lao PDR is no different from the diffusion of new ideas and technology in other countries. It is important to consider the following when promoting the use of innovative technology by individuals:

(i) Relative advantage: How much of an improvement the innovation is over the previously used technology;

(ii) Compatibility: The ease/difficulty with which the innovation can be assimilated into an individual's life;

(iii) Simplicity: Individuals are unlikely to adopt the innovation if it is perceived as complicated or difficult to use, an individual is unlikely to adopt it;

(iv) Trialability: The ease of using an innovation on a trial basis. If a user is first able to test an innovation, he/she will be more likely to adopt it; and,

(v) Observability: The extent to which an innovation is visible to others. An innovation that is more visible will drive communication among the individual's peers and personal networks and will in turn generate more feedback.

4.101 EVs have advantages in terms of operation cost, when compared to conventional vehicles. EVs are also likely to have compatibility and are simple to use. Trialability can be satisfied via pilot projects, test runs and so on. The use of EVs will be highly visible to others, so the condition of observability can be satisfied once at least some people use it. However, many people do not yet know what EVs are, how to use EVs, etc. Thus, it is very important to conduct an information and education campaign in Lao PDR as a precondition for relative advantage, compatibility and simplicity.

4.102 In theory, information about EVs has to be communicated to as many people as possible through various channels (TV, print, internet, billboards, bulletins, pamphlets, etc.), and at various times and occasions. People's awareness can then be re-enforced through actual trials or driving of demonstration vehicles. Interested persons will seek additional information and may be persuaded to adopt EV. There is likely to be only a few 'early adopters' in the beginning. But if the early adopters are Opinion Leaders in society, they could influence the others by sharing information about EVs. Once a critical mass in the number of EV users is reached, the speed of adoption accelerates and becomes self-sustaining.

4.103 Information dissemination and building awareness of EV can be done solely by public government administration. However, it is recommended that a public-private partnership be established to formulate information dissemination strategies and plans for effectively promoting EV (see Figure 4.5.1). Based on international experience, this kind of partnership would consist of central/local government; private companies, such as automobile manufacturers and battery manufacturers; electricity supplier; public transport service suppliers; universities; research institutes; and, NGOs. In the case of Lao PDR where there is no strong driving force such as an automobile industry, government agencies will have a more significant role in the introduction stage of EVs.

4.104 To effectively deploy the information and education campaign, it will be essential


4-54

to identify the target audience, potential dissemination tools, and information channels (see Table 4.5.1).


Figure 4.5.1 Example of EV Promotion Body and Possible Institutional Set-up in Laos

Table 4.5.1 Target Audience and IEC Channel

Target Audience Channel

E-newsletter

Press release

Exhibition, test-drive, showroom

Seminars, workshops

PR materials

TV CM Advertisement Website

Decision makers (National assembly members) X X

Central government administration (All ministries and committees)

X X X

Sub-national government administration (Vientiane, Luang Prabang, Savannakhet, etc.)

X X X

Automobile dealers (Toyota, Nissan, Honda, KOLAO, Hyundai, etc.)

X X X

Automobile workshops (Automobile dealers’ workshops)

X X X

Public transport service providers (VTE bus corporation, taxi and paratransit association)

X X X X

Car rental companies (Europcar, Chaleunxay Rental Service, etc.)

X X X X

Freight carriers, logistics companies (DHL, OCS, UPS, Fedex, Lao Freight Forwarder )

X X X X

Chairperson(Minister of MPWT)

Secretariat(DOT of MPWT)

EV Promotion Committee Members- Ministry of Public Works and Transport (MPWT)- Ministry of Science and Technology (MoST)- Ministry of Energy and Mines (MEM)- Ministry of Finance (MOF)- Ministry of Industry and Commerce (MoIC)- Ministry of Natural Resources and Environment (MONRE)- Enterprise D’Electricite du Laos (EDL)- National University of Laos (NUOL

Partners- Chamber of Commerce and Investment- Automobile business association- Automobile dealers (Toyota, Mitsubishi, Nissan, etc.)- Hotel and guesthouse association- Paratransit association- NGOs

Cooperation/Sharing Information



4-55

Target Audience

Channel

E-newsletter

Press release

Exhibition, test-drive, showroom

Seminars, workshops

PR materials

TV CM

Advertisement Website

Hotels and guesthouses (Hotel and guesthouse association, registered hotels and guesthouses)

X X X X

Tourism industry (Tourism association, travel agent association)

X X X X

Academics (National University of Laos, etc.)

X X X X

End users and residents (Residents in Vientiane, Luang Prabang, Savannakhet, etc.)

X X X X X X X

Teachers and students X X X X X


2) Public Awareness Campaign

4.105 Information dissemination activities shall be targeted mainly to three groups: government, private sector and citizens.

(a) Government Agencies

4.106 At the EV introduction stage, government support will be essential to conduct the information campaign, develop the required institutional system, install charging infrastructure for public use, and others. However, government agencies do not yet have enough knowledge on EVs for all these activities. Therefore, study reports (including JICA studies) and technical papers, such as a policy study, comparative study on other nation's EV promotion policy and technical specification standards should be delivered to decision makers and relevant government agencies. Each ministry's activities should also be shared with others through seminars, workshops, web-sites, etc.

4.107 As for information sharing about technical matters among related government agencies, i.e. DOT at MPWT, MEM, MOST, MOIC and MOF, universities and research institutes, a periodical EV conference would help researchers, experts and government agencies' staff obtain cutting-edge EV and peripheral technologies. It is suggested that DOT take a secretariat position. This will allow its staff to have more opportunities to keep themselves updated with latest technologies and enhance their capacities through conference preparations, i.e. selecting research papers for the conference, being a moderator of subcommittee meetings, and so on.

(b) Private Sector

4.108 The private sector is key in providing electric public transport service and only the private sector can sell EVs in Lao PDR. Therefore, the government needs to encourage introduction and promotion of EVs by the private sector. EV promotion policy and action plans to be delivered by the government shall be distributed through E-newsletters, press release, and mass media advertisement. The e-newsletter is an effective way to convey updated messages and information to business entities and associations, e.g. new technical specifications, regulations, ordinances and administrative procedures. On the other hand, paper-based newsletters are useful for distribution at specific information dissemination events, such as workshops, exhibitions and test-drives.


4-56

(c) Citizens

4.109 The Lao government has already started to disseminate information on EVs to the public through newspaper and websites. However, the influence of these activities is still limited, because people cannot access the information if they do not read a newspaper or use the internet. Therefore, the government needs to expand its information campaign to promote people's awareness on EVs.

4.110 A conventional but effective PR tool is to design a logo and a mascot. These are used in all types of events, such as the Olympics, Expos and EV promotion (see Figure 4.5.2). A logo and mascot can be designed by local artists hired for the purpose. Another possibility would be to invite design ideas from the public. This would involve the public from the initial stage of PR activity, and provide them with another opportunity to obtain information about EV. The secretariat of the IEC may contact schools to encourage students to submit design idea, or could even hold a design competition among schools. Teachers could link EVs with environmental benefits, and encourage students to take part in the activity. If this strategy is utilized, it is suggested that the secretariat prepare teaching materials and informative presentation materials that teachers can use and provide to students.

4.111 E-minibuses have operated in Vientiane Capital, Luang Prabang and Kayson Phomvihane of Lao PDR, but the vehicles only use each company's logo. In order to promote EV as a national policy, it would be a good idea to use the campaign logo in these e-minibuses. There are also e-bicycle and e-motorcycle dealers who can support the EV promotion policy by the same method.

Aichi Prefecture (Japan)

*with Main Mascots of Aichi Expo

“Working, in partnership, toward

electric future” (UK)

Electric Vehicle Association of the Philippines (eVAP)


Figure 4.5.2 Logos for EV Campaign

4.112 Priority adoption for public sector usage is also a popular strategy in EV-advanced countries. For example, e-motorcycles and EVs are used as official cars, police vehicles, and so on. EV adoption for public sector usage is not only for information dissemination, but also allows government officers to save on travel cost and improves the image of the country.

4.113 In some areas in Japan and in cooperation with car rental and taxi companies, local governments have established a mechanism to increase awareness and exposure to EVs by promoting use of EVs in car sharing, car rental, and taxis. For example, Kanagawa prefecture came up with a unique EV sharing model activity (see Figure 4.5.3). The local government uses EVs as public vehicles during weekdays, and citizens have an opportunity to rent EVs on weekends and public holidays. In this way, the local government increases public awareness by demonstrating EV use daily during weekdays, and interested citizens have an opportunity to try EV themselves on the weekends.



4-57

(1) Public use by Local Government Local government rents an EV from a leasing company during weekdays. (2) General use by residents Residents rent an EV from a car rental company, which contracts with the company that leases the same EV to local government during weekdays. One EV can be utilized by separating the leasing contracts – one contract with the local government and another with a car rental company.


Figure 4.5.3 Hand-on EV Sharing Model Project in Japan

4.114 Another example involves traffic safety and environmental education in elementary, junior- and high schools. It is relatively easier to change the attitudes of children. As part of traffic safety and environmental education, the awareness of students on EVs will be promoted. These students can then function as Opinion Leaders in their family and society.

3) Human Resource Development

4.115 Although various types of EVs have been introduced in Lao PDR, its maintenance system has not been established. Existing EVs are not fully utilized due to this lack of an EV maintenance system. The operators of e-minibuses in Lao PDR do not know the appropriate way to charge the batteries of e-minibuses, so the batteries cannot last long in terms of cruising range and life time. Moreover, the lack of a maintenance system for e-motorcycles caused e-motorcycles in China to have a bad reputation. Therefore, it is urgent to develop human resources for EV maintenance in Lao PDR.

4.116 Since EV is a new field for Lao PDR as in other countries, there is no electric vehicle department in universities. As well, vocational schools have not yet introduced any activity related to EV. However, the National University of Laos (NUOL) has the Department of Mechanical Engineering, Department of Electric Engineering, Department of Information Technology and Department of Electronics under the Faculty of Engineering. It is possible to develop EV human resources and study on EVs in coordination among four departments.

4.117 One of the most urgent issues is how to develop EV mechanics to maintain Lao PDR's existing EVs for sustainable use. At the same time, the assembling of EVs including e-motorcycles and conversion of ICE vehicles to EVs in Lao PDR can be considered.

4.118 In general, vocational schools produce many automobile mechanics. However, the teachers in those schools do not have knowledge and experiences on EVs, so Lao PDR needs to develop instructors for EVs first. While mechanics for conventional vehicles need only machine-related knowledge and experiences, EV mechanics also require electricity and IT-related knowledge and experiences. Therefore, NUOL, which is a center of education service in Lao PDR and has three required fields (machine, electricity and IT), will be a core of EV human source development.


4-58

4.119 As a preliminary action, the Faculty of Engineering (NUOL) already started a project to produce prototype EVs in August 2012 (see Box 4.5.1).

Box 4.5.1 Electric Vehicle Project in National University of Laos

1. Objectives 1) To study the structure of electric vehicle in detail 2) To develop the theory and practice related to electric vehicle 3) To build the first prototype of EV and test run 4) To transfer knowledge in the innovation of EV technology to

students 5) To compare the EV with IC engine car 6) To organize training for people outside the University

2. Expected Outcome 1) Be able to understand EV technology 2) Develop a prototype for further study on EV 3) Be able to support future study and research for development 4) EV technology will be included in Mechanical and electrical

curriculum 5) Prototype can help students practice EV working and testing

4. Methodology 1) Theory and data reviewing (textbook, web-site, existing EVs in Lao PDR, etc.) 2) Detailed study of each system (car body, gearing system, battery, electrical controller, motor, etc.) 3) Test run the existing EV and do some measurements 4) Draft design discussion 5) Developing prototype (car body, power system, driving system, controller box, motor, etc.) 6) Test run of a prototype EV 7) Modification and improvement of a prototype EV 8) Report writing

4.120 Based on the NUOL experiences, the following activities can be implemented in the short term.

(i) add new subject of EV in the curriculum or add items of EV into the existing subjects such as automotive technology, electric machine, etc.;

(ii) make a textbook of EV and teach that to the student;

(iii) hold the workshop on EV for teachers of other universities, technical colleges and technical high schools;

(iv) hold exhibitions for people using produced EV and brief printed material, and enlighten people about EV and an advantage on usage of EV; and,

(v) hold workshop on EV technology to transfer the technology of EV for the industry including design, production, operation, repair and maintenance (especially battery and its disposal process) of EVs.

4.121 For the medium to long-term, collaboration between industry, government and academia for EV transportation system will be more important, which includes;

(i) Establishment of association for promoting electric vehicle for exchange of information, and technology and publicity activity;

(ii) Establishment of research institute of transportation system for further technological

Prototype EV under Production



4-59

development of EV, making EV standards and regulations considering production, safety, maintenance, etc.; and,

(iii) Introduction of foreign investment for assembling EV in Laos, because of low labor cost and enough electric energy


Figure 4.5.4 Image of EV Human Resource Development in Lao PDR

Dept. of Electric Engr.Dept. of Electronics

Dept. of Electric Engr.Dept. of Electronics

Development of EV Technical Instructors

National University of Lao PDR

Produce EV Technical Instructors

Vocational Schools

EV dealers/ EV workshop/ EV public transport operators

Catered lecture services for engineering guidance on EVs

Produce EV

Establishment of new industry

Produce EV mechanics

Dept. of Mechanical Engr.

Dept. of IT

Assembly of e-motorcycles

Produce of low-speed electric vehicles

After-sales service of EV dealers/ EV workshop/ EV public transport operators


4-60

4.6 Public and Private Partnership (PPP) in EV Development

1) Opportunities for PPP in Laos EV

4.122 For a country inured in a socialist mold of governance, the concept of public-private partnership in the development of Lao transport infrastructure may seem strange. But there are many reasons why PPP is particularly suited to Lao EV development: (i) the government does not have the financial and technical resources to invest in this kind of undertaking; (ii) the technology is rapidly evolving and the government is not equipped to evaluate the competing options and select the most effective and economical one for the country; (iii) the private sector can bring in necessary management and technical expertise that is not currently available within the public sector; and, (iv) the demand for EV or for public transport is still at its infancy, and so appropriate risk sharing between Public and Private Sector parties is needed for it to materialize.

4.123 PPP in Lao PDR is not new, but is still unsystematic. There is no specific PPP law; but, there are some elements of PPP in many laws such as Enterprise Law, Investment Law, Public Investment Law, Regulation on Bidding, Anti-corruption law, Decree on Completion, etc. However, there is no clear understanding of what PPP is and how it works.

4.124 Lao PDR is not in a position to follow the PPP example of some other countries where the government invested large amounts of money for EV use by selected individuals. For Lao PDR, the project most amenable to a PPP arrangement is in the area of public transport.

4.125 A private entity can be granted a concession to supply, finance, operate, and maintain a fleet of e-minibuses (10-12 passengers). The route or service area can be defined in Vientiane, or in cities such as Luang Prabang, Kayson Phomvihane and Pakse. Ideally, the operator should recover his investments by charging fares. However, the market is still undeveloped and commercial risk is too high for the venture to be bankable. The government could mitigate this risk by guaranteeing a minimum revenue threshold; this can be done through a fixed payment for every trip or by vehicle-kilometer for a period of 10 years. At the end of the concession period, ownership of the assets is transferred to the government. Implicitly, the government subsidizes this kind of arrangement. Under a PPP deal, the resulting subsidy would likely end up lower. The technology risk is assumed by the private sector, as it is in a better position to handle the whole-of-life management of the assets.

4.126 A grassroots model of PPP arrangement can be conceptualized in the deployment of e-trikes. A cooperative of Tuktuk owner-drivers can be organized to be the recipient of a new fleet of e-trikes (to replace their old and gas-guzzling units). The acquisition price shall be subsidized by the government, but the cooperative will take care of paying back the government part of the cost of the unit - say, over 5 years. It collects the daily rental payments from its members. Once the member is able to complete a specified number of payments (60 monthly payments), ownership of the unit is transferred to the member. The cooperative or association takes care of the charging station in their service area of operation, and coordinates the operating schedules and vehicle maintenance.



4-61

2) Support System for Investors and Users

4.127 For a country inured in a socialist mold of governance, the concept of public- 4.6 It is quite clear that success cannot be achieved without the active participation of private sector including individuals, communities, domestic and foreign firms and other investors. It is thus necessary for government to establish an adequate support system to facilitate investment and participation of the private sector in EV development and service provision. Possible support for investors includes the following:

(i) Low interest loan for investors: A low interest loan can be provided for a qualified supplier with a proven capacity to deliver quality products and service but who would not be assured of investment safety until the Lao Government or an international organization like JICA or ADB provides support.

(ii) Manufacture protection: This can be put in place to ensure that private sector investment in EVs will make them a single player or one of very few players in the market. It must be kept in mind that Lao PDR is a small country in terms of population.

(iii) The government pledge of land, tax, material support: Free land, tax exemption and the offering of raw materials concession is a huge attraction to qualified investors. Investors are generally sensitive to news that all EV investors worldwide lose money and would not want to experience the same. The offer of a raw materials concession is critical. Lao PDR is a land-locked country. As of today, the only practical harbor is in Bangkok which is very far from Vientiane, Luang Prabang or Savannakhet. If local raw materials are made available, EV investors will save huge cost from shipping.

(iv) Green Tax Credit for company: If at least 30% of a company's employees ride EV on a regular basis, the company will be qualified to apply as a Green Company and be entitled to obtain a Green Tax Credit from the Lao government.

4.128 The following can be considered as forms of user support.

(i) Zero deposit payment plan: To ensure confidence from consumers, the government may work with some banks to facilitate installment payment programs for EV purchase and if possible, offer a 60-day no question asked return and full refund policy. After 60 days and if consumers choose to keep their EV, they only need to pay monthly installments over 12 months. This kind of installment program is commonly available for gasoline motorbikes but not on any EV today.

(ii) Free charging electricity at office: There should be a public policy that companies, offices and institutions should not charge EV users for electric consumption from recharging EVs at the office. The employers will receive a Green Tax Credit as previously mentioned.

(iii) Battery reliability: The main concern regarding EV is battery reliability. A battery leasing program is possible if the battery supplier is a monopolized player and the government provides support. In such a program, the battery remains the property of the battery supplier. A consumer may return the battery free of charge and is entitled for battery replacement. The consumer is only liable for payment of battery mileage for duration of lease. This is a very aggressive form of support and most battery suppliers will not be able to offer this kind of program unless the government in turn supports them with zero cost of important raw materials (Lead -Pb).


4-62

4.7 External Assistance and International Cooperation

1) General

4.129 Considering the context of Lao PDR, the country’s EV promotion policy needs to rely on external sources of finance, products (EV and EV infrastructure), and human resource. EV technologies have been quickly developing and Lao PDR must adopt and extract the most appropriate inputs to realize the envisioned EV society. It is important to establish a proper network for information updates, research, setting of regulations and standards, human resource development, technological improvement, EV and EV infrastructure procurement, and investment promotion at different levels (e.g. government, academic organizations and private sectors). However, there are limitations to potential international aid. For example, in general, international donors cannot directly support the procurement of EVs for private use. Therefore, the Lao government needs to classify which areas can be covered by international aid and which will covered by the Lao government.

2) Possible Areas for External Assistance

(a) Capacity Development Program for EV Management

4.130 This program aims to build the capacity of government agencies to manage EVs. Government agencies have to address new requirements related to EVs, including necessary laws, regulations and policies on EV import, registration and operation. If the government conducts the pilot project, the leading agency also needs to manage the project. Moreover, inter-ministerial coordination is key for EV introduction and promotion. However, the Lao government does not have sufficient human resources to address these issues. As in many other countries, lack of inter-ministerial coordination is also a weakness of the Lao government.

4.131 Considering the current situation in Lao PDR, It is unavoidable for the government to ask support from other countries to develop their capacity. This program may involve MPWT, MOF, MEM, MoST and others. As a part of this program, it is ideal to establish an EV promotion committee which consists of all relevant agencies and organizations in the public, academic and private sectors.

(b) Capacity Development Program for EV Maintenance

4.132 As mentioned in Chapter 4.5, the establishment of an EV maintenance system is important for EV promotion in Lao PDR. The National University of Laos (NUOL) has produced prototype EVs, and the professors and lecturers in the Faculty of Engineering have some knowledge on EVs. However, it would be beneficial for them to undergo a series of training on how to maintain EVs, including e-motorcycles, e-tuktuk and e-minibuses.

4.133 Such a program could develop the capacity of a core group of persons who could then lead the EV maintenance system in Lao PDR. At the same time, the program would provide opportunities for existing EV dealers and operators to learn how to maintain EVs.

(c) EV Pilot Project

4.134 EV pilot projects have been conducted as a trigger to introduce and promote EVs in many countries around the world. Without seeing and experiencing actual EVs, it is



4-63

difficult for people to understand what EVs are and how they work.

4.135 A small scale pilot project has been conducted in Luang Prabang City as part of the Joint Crediting Mechanism (JCM) MRV Methodology Demonstration Study - Promotion of Electric Vehicle Usage. This project is funded by the Global Environment Center Foundation (GEC) under the Ministry of Environment, Japan. The main project objective is to establish a methodology and project design document (PDD) for EV introduction in Luang Prabang. Introducing EVs is not a main objective and only four EVs (two e-motorcycles and two e-minibuses) are involved. In order to accelerate EV introduction and promotion, such projects should be scaled up and expanded to other areas.

4.136 Needless to say, conducting an EV pilot project requires a huge budget which the Lao government cannot afford. Most of the cities and towns in Lao PDR do not have an appropriate public transport service. As part of transport development, an EV pilot project can be a candidate for ODA.

(d) Infrastructure Development Project for EV Charging Infrastructure

4.137 EV charging infrastructure is a part of transport infrastructure in an EV society or smart city. In the case of Lao PDR, EV introduction and promotion will contribute to long-term socioeconomic development. Purchase of EVs for private use may need to be shouldered by individual people and the government. However, without EV charging infrastructure, people cannot shift from conventional vehicles to EVs. As well, the private sector cannot invest in EV charging infrastructures without demand. This is a chicken and egg problem. In order to cut this loop, the government has to invest in EV charging infrastructure. However, considering the available budget of the government and installation cost of charging infrastructure, the government should get financial support from international organizations.

3) Regional Cooperation

4.138 ASEAN is a regional body in which Lao PDR is a member, and which can be tapped for low emission transport including EVs. It can initiate a discussion on low emission transport policies and strategies with member countries, propose the establishment of a database for sharing of information, and set up a network of research and development centers on low emission transport.

4.139 One of the land transport goals in the ASEAN Strategic Transport Plan 2011 - 2015 is to establish a sustainable, energy efficient and environmentally-friendly transport system. The exchange and adoption of experiences, projects and knowledge related to 'Environment Friendly Transport System, Vehicles and Fuels' is one of the actions to support this goal. More specific actions are shown in Table 4.7.1. EV is an environmentally-friendly vehicle and green transport system. Therefore, EV introduction and promotion in Lao PDR supports this direction for ASEAN.

4.140 Although the promotion of an environmentally-friendly transport system is one of the important issues for ASEAN transport, there is no working/sub-working group for this theme under the Senior Transport Officials Meeting (STOM). EV introduction and promotion would be a good opportunity for Lao PDR to propose establishing a new working group or sub-working group under the Land Transport Working Group for


4-64

environmentally-friendly transport system. The Lao government could thus lead EV promotion in AESAN.

4.141 In the 2nd Workshop on Automotive Regulations and Certification under the Cooperation between ASEAN and Japan (April 2013, Cambodia), the information on EV regulations and standards for two-wheel vehicles and technical regulations for electric safety in Japan were shared with participants. In addition, Malaysia also shared their experiences on developing EV standards. There are already precedents for developing regional cooperation for EV promotion in Lao PDR. The Lao government just needs to take action.

Table 4.7.1 Actions and Milestones to Establish a Sustainable, Energy Efficient and Environmentally-friendly Transport System.

Actions 2011 2012 2013 2014 2015 Beyond

Exchange of experiences, projects & knowledge related to ‘Environmentally-Friendly Transport System, Vehicles and Fuels’.

Adoption and implementation of pilot projects based on the successful experiences and projects related to ‘Environmentally-Friendly Transport System, Vehicles and Fuels’.

Conduct studies on 'Promotion of Green Public Transportation System' to improve and establish energy efficient green public transport (bus rapid transport/LRT) in the capital cities of AMSs, as per requirement by 2013.

Implement the suggestions/projects by the above study on 'Promotion of Green Public Transportation System'.

Source: ASEAN Strategic Transport Plan 2011 - 2015

4.142 Cooperation through the academe is another way to extend regional cooperation. In Asia, the Eastern Asia Society for Transportation Studies (EASTS) is one of the prominent academic societies for transport. The contact person of Lao-EASTS is an officer of DOT, so it would be convenient for DOT to establish a study group for EV. However, the society is not very active nowadays, so major revitalization is necessary.

4.143 It is recommended that a study group be established first within Lao-EASTS to start EV related activities. Outside of the society, an external study group shall also be set up to discuss broad issues. The members could be from automobile dealers, universities and relevant government agencies.

4.144 After establishing the study group, the domestic charter could seek a possibility of applying for a new international research group (IRG) to EASTS. Once the study group is accepted as IRG, it can apply for an international cooperative research activity grant from EASTS. It could also initiate talks with ERIA regarding the possibility of conducting cooperative research on EV in the context of energy or environmental issue in ASEAN region, with neighboring countries.



4-65


Figure 4.7.1 Conceptual Flow of EV Study Group Set-up


Chapter 5 Model Projects

5-1

5 MODEL PROJECTS

5.1 General

5.1 Design and implementation of model projects is an effective way to facilitate understanding of EVs among stakeholders, evaluate merits and demerits of EVs and gather necessary data and information for establishing concrete institutional framework and management system of EVs in the country. The implementation of model projects also plays an important role on information and education campaigns.

5.2 Model projects (or pilot projects, social demonstrations) have been conducted in many countries in cooperation with public, private and academic sectors. The results of model projects have contributed to promote people's awareness on EVs, to identify requirement conditions such as infrastructure, institutional system, etc. for better usage of EVs, to create new industries, etc.

5.3 Lao PDR is still at the beginning of EV introduction. The objectives of model project implementation are as follows:

5.4 Implementation of model projects has the following objectives;

(i) To examine and promote social acceptance: It is very difficult to understand and appreciate properly what EVs are unless people experience actual EVs.

(ii) To obtain inputs to establish an institutional framework: The experiences of other countries can serve as a model in establishing an institutional framework. However, those institutional frameworks need to be modified to suit Lao PDR condition through model projects;

(iii) To examine economic and financial feasibility of EV introduction: Results of economic and financial analyses need to reflect actual conditions, and;

(iv) To facilitate human resource development: Before proceeding to full-scale stage, human resources should be developed and trained to facilitate EV introduction and promotion.

5.5 Considering available EVs in the market and the current situation of Lao PDR, five EV introduction programs and one EV support program are proposed.

The Preliminary Works for the Technical Cooperation on Low-Emission Transport System FINAL REPORT Chapter 5 Model Projects

5-2

5.2 E-trike Support Program

1) Background and Objectives

5.6 The road-based public transport in Lao PDR is composed of public buses (intra-city, inter-city and inter-province), songthaew, tuktuk, jumbo (sky-lab), sam lo, taxi and motorcycle taxi, and others. In general, current public transport services are of poor quality in terms of network, coordination among the public transport services, driving manner, fare setting, public transport infrastructures, etc.

5.7 While several e-microbus and e-minibus services are under operation in Vientiane Capital, Luang Prabang and Kayson Phomvihane, these were introduced without defining the roles and functions in the entire public transport service, and these have been facing difficulties on the operation and maintenance. As found out in this Study, smaller sizes of EVs can have economic, financial and environmental advantages compared to equivalent sizes of ICEs (see Box 5.3.1), and it is intended for further verification of the benefits of introducing e-public transport services through this model project.

5.8 Although different types and sizes of EVs are available in the market, the most suitable EVs for public transport service in Lao PDR are e-trikes considering the technology's maturity and the resource capacity of Lao PDR. It is assumed that sam-lo, jumbo and tuktuk are replaceable by e-trikes (see Table 5.2.1).

Table 5.2.1 Alternative EVs asfor Replacement of Existing Public Transport Vehicles

Capacity Current Vehicles Corresponding Alternative E-trikes

3 -5 pax

Jumbo

Sam Lo

Small E-trike

8 pax

Tuktuk

Songthaew Noi

Large E-trike


5.9 In this program, main focus is placed on replacement of Jumbo, Sam Lo and Tuktuk due to the following reasons;

(i) Financial benefit of shifting from conventional Jumbo to equivalent type of e-trike is significant. Although the initial cost of e-trike is high, its operating cost is too low that lifecycle cost becomes low compared to conventional Jumbo;

(ii) With a support to Jumbo driver for initial investment, they can increase their take-home pay;

(iii) With much improved e-trike taxi services, their market can be expanded and mobility and accessibility of people are expected to increase;



5-3

(iv) With an improved and appealing image, e-trike taxis can attract tourists in cities as well, and;

(v) Energy savings and environmental improvements are also to be noted.

5.10 Objectives of the program are as follows:

(i) To verify the economic and financial impacts of e-public transport service that can be used to establish a business model for the e-public transport service;

(ii) To identify required support infrastructure for e-public transport operation;

(iii) To assess needs of e-public transport service in order to improve e-public transport service, and;

5.11 To establish adequate technical and institutional support systems to scale-up e-public transport services.

2) Project Areas

5.12 The identified project areas are Vientiane Capital and Luang Prabang from the following reasons;

(i) Vientiane Capital: This is the capital of Lao PDR that has been facing many urban transport problems such as increase in the number of vehicles, traffic pollutions, and lack of road networks. The above-mentioned vehicles, (i.e., jumbos and tuktuks) are still important transport modes for people, especially those who cannot afford their own transport mode. However, jumbos and tuktuks are also contributors to traffic pollution, noise, occupy roads spaces for waiting passengers, and others. It would bring a significant benefit to replace those vehicles with e-trikes. At the same time, Vientiane Capital is a centre of information, dispatching to the other parts of the nation as well as to the other countries. The model project in Vientiane Capital can trigger promotion of e-trikes to the entire country.

(ii) Luang Prabang: Luang Prabang is the world heritage city that is a main attraction site of tourists in Lao PDR. Tuktuks are used by residents and tourists as their travel mode, but those vehicles have also contributed to the deterioration of air quality levels in the city due to their higher gas emissions and noise pollution levels. E-trikes are quieter transport modes that can contribute to a more tranquil atmosphere in the city, which in turn can attract more tourists. Since Luang Prabang City has been cited as an environmental city. Therefore, the shift from existing tuktuks to e-trikes matches with the city's policy.

3) Project Contents

5.13 E-trikes (or e-tuktuks) have been introduced and operated not only in Asia (e.g. Thailand, Philippines, India) but also in Europe (e.g. Switzerland, German, Italy, Netherlands). Those e-trikes are used by commuters, tourists, etc. to travel in small towns and municipalities.

5.14 In Lao PDR, some people contend that tuktuks/jumbos are unsafe. However, like other vehicles, the safety of tuktuks/jumbos depends on how it is used or driven. Three-wheelers have their own advantages as it is more suitable for operation on small alleys and tourism areas, lower vehicle operating cost (VOC), etc. In order to realize benefits from its features, it is recommended to shift conventional jumbos to small e-trikes.


5-4

5.15 This project covers introducing e-trikes, installing charging stations, and establishing a mechanism for operation and maintenance of e-trikes and charging stations.

(i) Introducing e-trikes: E-trikes made by Japanese manufacturers will be introduced to serve as public transport mode in Lao PDR. There are two ways to introduce e-trikes to Lao PDR: one is led by the government, and another is by the private sector (see Figure 5.2.1). In the former case, the government will lease the introduced e-trikes to a private company, and they will maintain and manage e-trikes. In both cases, the operation will be done by exiting jumbo/tuktuk drivers, outsourcing from the private company. Operating by the private company would cause conflict with the existing service operators of jumbo, tuktuk and taxi. Moreover, that mechanism cannot reduce the number of existing jumbos/tuktuks, which have been causing many problems.

In Case 1, the candidate agency from the Lao government side is MPWT and/or DPWT, which has been leading introduction and promotion of EVs in Lao PDR. In both cases, one of the candidate private companies in Lao PDR is Lao Green Co., which is currently operating the EV taxi service in Luang Prabang.

Leasing to jumbo and tuktuk drivers can be arranged through paratransit associations. One of the advantages in leasing e-trikes through the associations is that many drivers can experience firsthand e-trikes, and can therefore compare between conventional tuktuk/jumbo and e-trikes. It is also good for the Lao company, because they can monitor and manage their e-trikes in coordination with the associations. The company will not need to coordinate with drivers directly.


Figure 5.2.1 E-trike Introduction Mechanism

(i) Installing charging stations: Similarly, charging stations can be installed by the government or the private sector. In both cases, it is advisable that operation is outsourced to a private company. There are two types of charging stations: one is a normal power outlet, and another one is a battery swapping station.

ODA Japanese E-trike Manufacturer

Lao Government

Lao Company

Lao Company

Jumbo/Tuktuk Driver

Jumbo/Tuktuk Driver

Jumbo/Tuktuk

Lao Company

Jumbo/Tuktuk Jumbo/Tuktuk

Lao Company

Manufacturer

Jumbo/Tuktuk

Lao Company

Jumbo/Tuktuk Jumbo/Tuktuk

Provision of e-trikes

Lease of e-trikes

Lease of e-trikes

E-trike lease fee/ Operation record

E-trikes sale/ Outsourcing e-

trike pilot project

E-trikes purchase/ Operation record

Outsourcing e-trike

operation

Operation record

Case1: Leading by the government Case2: Leading by private sector



5-5

Table 5.2.2 Comparison of Normal Charger and Swapping System

Power Outlet

Swapping Stations

Advantages No requirement of special facilities Easy and cheap to provide Easy to manage

No need to wait for charging batteries Batteries are not overcharged

Disadvantages Takes time to charge (1-2 hours minimum) Difficult to monitor the charging conditions

Expensive to install charging stations Required larger spaces


Possible locations of charging stations in the project area are shown below.


Figure 5.2.2 Candidate Locations of Charging Stations in Vientiane Capital

National University of Laos

23

4

50 2 4 6km

Wattay AirportPatuxai

That Luang

Thanaleng Border


5-6


Figure 5.2.3 Candidate Locations of Charging Stations in Luang Prabang

4) Required Actions from the Government

5.16 In order to conduct a model project effectively and efficiently, the following actions are required from the Lao government:

(i) To permit importation of e-trikes: As for now, importation of tuktuks to Lao PDR prohibited because these transport modes generate higher pollution levels and are considered as unsafe vehicles. E-trikes are also three-wheeled vehicles, but no harmful emissions, and are structured as safe vehicles.

(ii) To provide preferential treatments, especially tax reduction/exemptions on introduced e-trikes: Unless e-trikes are introduced through ODA financing, e-trikes are still expensive to buy, especially considering its affordability to tuktuk/jumbo drivers. A preferential tax treatment is important in promotion of e-trikes by the private sector.

(iii) To establish or identify the key department/division: In case procurement of e-trikes is through an ODA project, the government will own those vehicles. Therefore, it is necessary to establish or identify the specific government department/division that will own the e-trikes as government property, lease the vehicles to transport service operators, or manage the e-trikes, and;

(iv) To establish a Steering Committee on the project to monitor and support the project: In order to promote e-trikes as part of national policy, a strong commitment of the government is indispensable.

5) Estimated Project Cost

5.17 The project cost will be modified significantly depending on the applied charging method, i.e. charging system or swapping system. The project cost with normal chargers is about USD220,000 while the project with swapping system costs more than USD500,000.

0 0.5 1 1.5km

1North Bus Terminal

3

2

South Bus Terminal

Royal Palace



5-7

Table 5.2.3 Estimated Cost of E-trike Project in Vientiane Capital

Items

Charging System Swapping System

Quantity Unit Cost

(USD) Cost

(USD) Quantity

Unit Cost (USD)

Cost (USD)

Initial Cost

Facilities

E-trikes 25 unit 5,500 137,500 25 unit 5,500 137,500

Battery - unit 3,500 - 50 unit 3,500 175,000

Charger 50 unit 200 10,000 25 unit 200 5,000

Swapping stations - unit 30,000 - 5 unit 30,000 150,000

Sub-total 147,500 467,500

Operation Cost

Personnel expense (Driver) 25 pers. 1,800 45,000 25 pers. 1,800 45,000

Electric tariff1) 77.5 MWh 100 7,750 77.5 MWh 100 7,750

Maintenance cost2) 1 set 4,425 1 set 14,025

Sub-total 57,175 66,775

Management cost3) 20,468 53,428

Total 225,143 587,703

Source: JICA Study Team 1) 25units x 310days x 100km x 0.1kwh/km x 0.1USD/kWh 2) 3% of initial cost 3) 10% of initial and operation cost

Table 5.2.4 Estimated Cost of E-trike Project in Luang Prabang

Items

Charging System Swapping System

Quantity Unit Cost

(USD) Cost

(USD) Quantity

Unit Cost (USD)

Cost (USD)

Initial Cost

Facilities

E-trikes 25 unit 5,500 137,500 25 unit 5,500 137,500

Battery - unit 3,500 - 50 unit 3,500 175,000

Charger 40 unit 200 8,000 25 unit 200 5,000

Swapping stations - unit 30,000 - 3 unit 30,000 90,000

Sub-total 145,500 407,500

Operation Cost

Personnel expense (Driver) 25 pers. 1,800 45,000 25 pers. 1,800 45,000

Electric tariff 77.5 MWh 100 7,750 77.5 MWh 100 7,750

Maintenance cost 1 set 4,365 1 set 12,225

Sub-total 57,115 64,975

Management cost 20,262 47,248

Total 222,877 519,723

Source: JICA Study Team 1) 25units x 310days x 100km x 0.1kwh/km x 0.1USD/kWh 2) 3% of initial cost 3) 10% of initial and operation cost

6) Implementation Plan

5.18 The implementation plan of this program is as follows:

(a) Step 1: Establishment of Project Implementation Unit

5.19 There are various relevant agencies to implement a model project. Therefore, a project implementation unit (PIU) should involve all the stakeholders to conduct the project effectively and efficiently. It is advisable that the DPWT of the cities will be the leading agency for the PIU, and MPWT will function as an advisory agency.

(b) Step 2: Preparation of Detailed Implementation Plan

5.20 The detailed implementation plan should include the allocation of e-trikes and charging stations, role-sharing of relevant agencies, monitoring plan, etc.


5-8

(c) Step 3: Procurement and Installation of E-trikes and Charging Facilities

5.21 E-trikes and charging facilities will be procured from Japan. E-trikes will be leased to the jumbo/tuktuk drivers through the mechanism mentioned earlier. The charging facilities will be installed following the detailed implementation plan.

(d) Step 4: Operation and Monitoring of E-trikes

5.22 During the field demonstrations, the drivers will submit the operation conditions to PIU, which includes operation distance and time, operation route, the number of passengers, the number and the duration of charging, the drivers’ and passengers’ assessment on e-trikes, etc.

(e) Step 5: Evaluation of Model Project and Establishment of Business Model

5.23 Based on the monitoring results, an appropriate business model will be established to expand the program size and its coverage.


Chapter 6 Conclusion and Recommendations

6-1

6. CONCLUSION AND RECOMMENDATIONS

6.1 Low-emission vehicles including electric vehicles (EVs) have the potential to be the catalyst that can drive national policy on Environmentally Sustainable Transport (EST). Lao PDR has plentiful sources of cheap energy generated by hydro energy. Therefore, EVs in Lao PDR emit lower CO2 than those in other countries, which contribute to the improvement of air quality. It is advisable for Lao PDR to promote EVs strongly as a national policy to reduce the pollution emitted by transport vehicles.

6.2 Lao PDR relies fully on fuel fossil for transport vehicles. It is estimated that the import value is USD 590 million in 2011 and is estimated to reach USD 1.6 billion in 2030. If all vehicles shift to EVs by 2030, Lao PDR can save USD 940 million from fuel savings alone. This can contribute to foreign currency savings and to a more stable energy supply. Electric consumption from EVs is only 1.3% of the amount of power generated in 2020. EVs especially e-motorcycles have already started distribution. The vehicle operating cost of small EVs in comparable lifecycle is 20% lower than that of conventional vehicles. People who cannot afford a private car can benefit from those small EVs. EV technology has been improving steadily. In particular, the battery improvement has reduced EV costs. Longer cruising range provides the possibility to use EVs for other types of vehicles, such as, cars and buses. Thus, EV can produce significant environmental, economic and social benefits. The impacts of these EVs need to be understood properly among the stakeholders.

6.3 There are also many suitable spaces for EVs in Lao PDR. The major cities are located in generally flat terrain, and are of small- to medium-sized areas that can supplement the performance of EV batteries. It is expected that tourism areas in the country including Luang Prabang can benefit significantly from the use of EVs. On the other hand, road infrastructure development has been delayed, and road conditions and network are still inadequate. These transport infrastructures, which are below standards, impacts the stability and driving comfort offered by EVs. Road infrastructure will be developed steadily in the future. However, it is more effective to develop road infrastructure together with EV infrastructure (mainly charging stations) for EV deployment. Delays in road development can be considered as a good opportunity to infuse development of EV infrastructure.

6.4 While there is a great potential for full-scale deployment of EVs in Lao PDR, there are also many issues that need to be resolved. E-motorcycles and small types of EVs were already introduced and distributed gradually. However, there are no institutional systems in place that can properly manage EVs. EVs are not classified as motor vehicles under the current law, so that EV cannot be registered and insured. The current laws and regulations are not suitable for EVs from the viewpoint of both the government and EV users. In addition, the institutional system to ensure safety and security of EVs and their users are absent. If EVs are deployed under the current circumstances, EST vision which should be achieved by EV promotion is spoiled. The effect of EV promotion is also reduced. In order to promote EVs effectively and sustainably in the long-term, the following roadmap and actions are proposed:

(i) Establishing EV Policy: The policy and institutional system for EVs are related not only to MPWT, but also MEM, MOF, MOIC, MOE, MPI and other ministries. In order

The Preliminary Works for the Technical Cooperation on Low-Emission Transport System FINAL REPORT Chapter 6 Conclusion and Recommendations

6-2

to deploy EVs in the entire country, the role of local government, private sector who will be the project promoter in actual situations and the users are significant. EVs can be promoted as a collective action of the entire society. In order to clarify the role-sharing of various stakeholders and promote EVs under appropriate institutional system, it is necessary to establish a comprehensive policy for low-emission vehicles, including EVs. It is advisable to organize an EV committee, which is an inter-ministries organization, to solve those issues comprehensively.

(ii) Defining EVs as Vehicles and Formulating Safety Standards: EV should be defined as motor vehicles in the ministry order of MPWT. Likewise, the safety standards for EVs will be prepared based on those standards applied in other countries. Due to this, EV can be imported, registered and used as motor vehicles. A less troubled user environment can be also realized with the participation of responsible private firms and consumer protection. In addition, EV management will be also easy.

(iii) Introducing Preference Tax System for EVs: Considering the socio-economic and environmental impacts of EV, EVs have to be given the tax preference treatment. These are the reasons behind the subsidies given to EV purchases in developed countries. It is essential to provide direct support to EVs in the early stages of deployment. The draft of vehicle taxation system which can lower the lifecycle cost of EVs compared to equivalent ICE vehicles is in this Study. There is a possibility to decrease the EV cost dramatically in accordance with improvements in EV and battery technologies in the near future. It is possible to collect taxes more properly by reviewing vehicle taxation system including tax preferential treatment on EVs after 3 to 5 years.

(iv) Developing EV Infrastructure: It is essential to develop appropriate infrastructure for EV promotion. In particular, the supporting infrastructure for battery charging needs to be developed. Tourism sites and urban areas will be prioritized to allocate charging stations in consideration with the purpose of introducing EVs. It is also effective to develop EV infrastructure together with electrification of public transport vehicles or construction of parking spaces. It is also suggested that charging stations at public parking spaces shall be provided by free of charge as an EV promotional activity.

(v) Developing Human Resources for EVs: The development system for EV human resource will be established with focus on the National University of Laos in the long term. In order to use the introduced EVs effectively, the establishment of EV maintenance system is considered an urgent issue. It is important to utilize the technologies and know-how that has been accumulated in the private sector in Lao PDR and in other countries. Since it is essential to establish cooperation among industry players, government and academia in the development of human resources, this opportunity can be used to develop human resource not only for EV maintenance, but also for operation and management of EV public transport system, preparation of EV related regulations, etc.

(vi) Introducing E-trike as PPP Project: Since the use of conventional jumbo and tuktuk has become a serious problem in terms of environmental and safety


Chapter 6 Conclusion and Recommendations

6-3

standards, it is recommended to promote e-trike as PPP project. Acquisition of e-trikes will be subsidized by the government, and tuktuk associations will have the responsibility to collect lease payments and the O&M of e-trikes. In addition, since vehicle operating costs of e-trikes over a comparable lifecycle is cheaper than that of conventional tuktuk, shifting to e-trikes can contribute to increase in income of tuktuk drivers. It is considered more practical to start from a pilot project.

(vii) Coordinating with Other Countries for EV Promotion: It is difficult to introduce and promote EVs with limited resources in Lao PDR. Therefore, it is advisable to utilize the support of international organizations for human resource development and for the implementation of pilot projects. In addition, it is possible to promote EV activities through ASEAN or academic society. While the Philippines and Thailand have promoted e-trikes and Vietnam introduced e-motorcycles, no country has introduced and promoted EVs as a national policy. It is good opportunity for Lao PDR to lead introduction and promotion of EVs in ASEAN.

Appendix

Appendix3A

The Preliminary Works for the Technical Cooperation on Low-Emission Transport System FINAL REPORT: APPENDIX

3A-1

APPENDIX 3A: Vehicle Regulations in Japan

1) Road Transport Vehicle Act

1. This Act (Law No, 185 of 1951) has been stipulated for the purpose of effecting official confirmation regarding the ownership of road transport vehicles, assuring the safety of construction and devices thereof, and preventing environmental pollution. Moreover, this Act aims to contribute to the healthy development of vehicle maintenance and repair businesses. To achieve its intended purposes, the Road Transport Vehicles Act has prescribed the requirements with which the construction and devices of vehicles should comply.

2. Furthermore, this Act has provided systems necessary for vehicle inspection and registration. In order to maintain the performance, including the safety of the construction and devices of road vehicles, the Act makes it a statutory obligation for vehicle users to perform the check and maintenance of their vehicles. In addition, the Act prescribes the contents of the maintenance and repair business. For the smooth enforcement of the Act, related cabinet orders, ordinances, and circular notices have been issued (see Table 3A-1).

(a) Registration of vehicles: Road transport vehicles are classified into three categories: motor vehicles (ordinary-sized vehicles, small vehicles, mini vehicles, large special vehicles, small special vehicles), motorcycles, and light vehicles (which are moved by means of human or animal power). Those vehicles subject to registration are ordinary-sized vehicles, small vehicles (except two-wheeled vehicles), and large special vehicles. The aforesaid vehicles are not allowed on roads unless they satisfy the following requirements:

(i) Registered;

(ii) With a sealed motor vehicle registration number plate;

(iii) With a valid motor vehicle inspection certificate and an inspection sticker; and

(iv) Covered by a motor vehicle liability compensation insurance.

The registered items are name and type of vehicle, chassis number, type of engine, name or designation, and address of the owner, principal place of use, date of registration, and motor vehicle registration number.

Two-wheeled small vehicles and mini vehicles are not allowed on roads unless their motor vehicle numbers have been designated.

(b) Safety regulations for vehicles: Vehicle safety-related requirements are prescribed in the Safety Regulation for Road Transport Vehicles set by the MLIT. These are composed of four aspects: accident avoidance measures, injury reduction measures, fire prevention measures, and others. Accident avoidance measures include visibility characteristics, transmission of information, driving characteristics, and keeping of performance. Injury reduction measures include occupant protection, vehicle body, and pedestrian protection.

(c) Check and maintenance of vehicles: Unless a proper preventive maintenance is conducted, vehicle safety will deteriorate and environmental pollution will increase. Therefore, the government prescribes the minimum required items, which vehicle users should check at regular intervals as their minimum responsibility. There are two kinds of maintenance check. One is daily maintenance check, and the other is periodic.

Daily maintenance check is a service in which users themselves check and service their vehicles, as required, at proper times based on running distances and running conditions. On


3A-2

the other hand, business users/ drivers of vehicles are required to check their vehicles on a daily basis before operating them. The procedures have been prescribed in the Motor Vehicle Checking Standard. Check items include brakes, tires, battery, engine, lighting system and direction indicator lamps, window washer and wiper, and so on.

Periodic maintenance check is carried out by vehicle users once every year in the case of passenger vehicles for private use; every six months in the case of trucks for private use; and every month in the case of vehicles for business use. The procedures are also prescribed in the Motor Vehicle Checking Standard. Specific check points cover the running system, suspension system, power train system, electric system and engine, as well as the steering system and brake system which are directly connected with motor vehicle safety.

Table 3A-1 Requirement of Inspection, Registration, Notification and Compulsory Insurance by

Vehicle Type

Vehicle Type Typical Vehicle Inspection Registration Notification Compulsory

Insurance

Motor

Vehicle

Ordinary-sized

vehicles

Buses/Large trucks/Large passenger

vehicles ✔ ✔ ✔

Small vehicles Small trucks/Small passenger

vehicles ✔ ✔ ✔

Three-wheeled trucks ✔ ✔ ✔

Large two-wheeled vehicles ✔ ✔ ✔

Mini vehicles Mini trucks/Mini passenger vehicles ✔ ✔ ✔

Two-wheeled vehicles/Scooters ✔ ✔

Large special

vehicles

Road rollers/ Bulldozers ✔ ✔ ✔

Small special

vehicles

Other than large special vehicles ✔

Agricultural tractors ✔

Motorcycles First category Mopeds ✔

Second category Two-wheeled vehicles ✔


(d) Inspection of vehicles: A motor vehicle is not allowed to be operated unless it has passed the motor vehicle inspection conducted by the MLIT and has obtained a valid motor vehicle inspection certificate. The motor vehicle inspection covers ordinary-sized motor vehicles, small motor vehicles (in the case of two-wheeled motor vehicles, those with an engine displacement exceeding 250 cc), three- and four-wheeled mini motor vehicles, and large special motor vehicles. The types of inspections are categorized into five (see Table 3A-2). All vehicles have to undergo initial inspection and renewal inspection. The intervals of renewal inspection depend on the category of vehicles (see Table 3A-3).


3A-3

Table 3A-2 Types of Vehicle Inspections

Type of Inspection Contents

Initial inspection Inspection which a new vehicle must undergo when it is newly operated.

As for those type-designated vehicles, the presentation of the vehicle is omitted when a Completion Inspection Certificate issued by the relevant vehicle manufacturer, etc. is submitted.

When a used passenger motor vehicle is serviced and inspected at a designated maintenance and repair business operator, the presentation of the motor vehicle is omitted if a Safety Regulation Conformity Certificate is submitted.

Renewal inspection Inspection which a motor vehicle must undergo when it is to be operated continually after the term of validity of the motor vehicle inspection certificate has expired.

Extraordinary inspection Inspection which is to be conducted when motor vehicles of a certain range or mini motor vehicles exempted from inspection have encountered accidents at an excessively high frequency and the MLIT deems that there is a possibility that the construction or performance of the motor vehicles concerned do not comply with the safety regulations for road vehicles.

Modification inspection Inspection which a motor vehicle must receive when there have been changes made in its length, height, width, maximum payload, etc.

Preliminary inspection Inspection which motor vehicles must undergo when they have not yet received registration or vehicle numbers and they want to get a certification of conformity with regard to the safety regulations for road transport vehicles.


Table 3A-3 Intervals of Renewal Inspections

Category of Vehicles Inspection Intervals

Vehicles for business use (e.g., buses and taxi cabs)

Trucks (e.g., trucks and tank lorries)

Vehicles for private use which have been specified by ordinance of MLIT

(i) Vehicles for private use with a passenger capacity of 11 persons or more

(ii) Vehicles exclusively used for carrying infants

(iii) Rental motor vehicles

At intervals of 1 year

2 years for the first time in the case of motor vehicles used for transport of goods with a gross vehicle weight of less than 8 tons and rental cars used for carriage of passengers

Passenger motor vehicles for private use

Small two-wheeled motor vehicles

3 years for new vehicles which undergo inspection for the first time

At intervals of 2 years for subsequent inspections

Large special motor vehicles At intervals of 2 years

Mini motor

vehicles

Passenger motor vehicles 3 years for new-vehicles which undergo inspection for the first time

At intervals of 2 years for subsequent inspections

Trucks, etc. At intervals of 2 years


(e) Maintenance and repair business of motor vehicles: The Road Transport Vehicles Act stipulates the following provisions concerning the motor vehicle maintenance business so that maintenance and repair business operators may have the required knowledge and be able to perform appropriate maintenance and repair works that meet customers’ demand.

(i) Vehicle disassembling repair business: Operating the disassembling repairs business requires that it must obtain a certification by the Director-General of the District Transport Bureau in accordance with the kind of motor vehicle disassembling repair business and each individual business site where such disassembling repairs are carried out (so-called certified service shop). The requirements for the certified service shops include having indoor workplaces with the specified dimensions (motor vehicle service workplace, parts service workplace, and check workplace), motor vehicle pool, and equipment for maintenance checks; engaging two or more employees (including a service supervisor) in disassembling repair services, with one-fourth or more of the employees being qualified


3A-4

motor vehicle mechanics; and designating a service supervisor from among first-class or second-class qualified motor vehicle mechanics.

(ii) Designated vehicle maintenance and repair business: Certified vehicle disassembling repair service shops can be selected as designated service shops. The criteria for this designation are that the repair service shop should have excellent service techniques and a management organization for performing adequate repair service for the entire motor vehicles, should have reliable motor vehicle inspection equipment, and is capable of appointing mechanics as a motor vehicle inspector. When a designated service shop conducts the necessary inspection, maintenance and repairs for a motor vehicle, it must issue to the user a Safety Regulation Conformity Certificate, etc. When this certificate is submitted for the renewal inspection, the renewed vehicle inspection certificate shall be issued without a need to present the motor vehicle concerned to the Transport Branch Office.

(f) Vehicle type certification system: This is a system wherein the government assures that every vehicle complies with the technical standards concerning safety, environment, etc. before it is sold. It is composed of three types of certification systems, namely, Vehicle Type Designation System, Vehicle Type Notification System, and Preferential Handling Procedure for Imported Vehicles. Vehicle manufacturers must submit an application to the MLIT before they produce or sell new types of vehicles. The vehicles concerned are examined to determine whether they conform to various applicable regulations, including the Safety Regulation for Road Transport Vehicles, before they are approved.

(i) Vehicle Type Designation System: This is a system to designate, upon application, the type of vehicles that are mass-produced and have identical construction, devices, and performance. After the examination is completed and the vehicle is type-designated, presentation of the vehicle can be omitted during the initial inspection conducted at the Transport Branch Office, etc., provided that the completion inspection certificate issued by the vehicle manufacturer, etc. is submitted. The feature of this system is the simplification of the vehicle registration procedures by omitting the process of presenting the individual motor vehicle concerned to the MLIT and allowing the motor vehicle manufacturers concerned to conduct the initial inspection of the vehicle on behalf of the MLIT who originally should perform such inspection.

(ii) Vehicle Type Notification System: This is used mainly for large trucks and buses, which usually have a wide variety of specifications. In this system, prior to the initial inspection being conducted at the Transport Branch Office, etc. (for individual motor vehicles), examination is carried out for common construction and devices as a type using the basic motor vehicle (or a sample vehicle) to confirm the conformity of such construction and devices to safety regulations. The result of said preliminary examination is used in the initial inspection for individual motor vehicle, rationalizing the process of initial inspection. The Type Notification System differs greatly from the Type Designation System in the sense that no examination is required for the Type Notification System with regard to the uniformity of motor vehicles (quality control system), the completion inspection system, and so on. Therefore, under this system, it is necessary to present each individual motor vehicle without fail at the time of the initial inspection so as to determine its conformity to safety regulations. Furthermore, during the initial inspection, it is a statutory obligation to submit documents, etc. proving the conformity of the motor vehicle concerned to relevant regulations on exhaust emission and noise level. Thus, it is advisable to apply for the Type Approval of Device for the exhaust emission control devices and motor vehicle noise


3A-5

control devices pursuant to Paragraph 2 of Article 75 of the Road Transport Vehicles Act prior to the application for type notification for this will expedite the process of initial inspection.

(iii)Preferential Handling Procedure for Imported Vehicles: This system was provided for the promotion of motor vehicle imports. The system is applied to types of imported motor vehicles that are sold in small quantities (2,000 units per year per type, or 3,000 units if the type will eventually shift to type designation) in the Japanese market. Examinations are carried out solely using the documents by the Automobile Type Approval Test Division of the National Traffic Safety and Environment Laboratory in conformity with the safety regulations and by the Type Approval and Recall Division of the Road Transport Bureau of MLIT on the appropriateness of the operational system for quality control.

2) Environmental Pollution Control on Motor Vehicles

3. The MOE set environmental quality standards for each of the air pollutants (SO2, O, SPM, NO2, and photochemical oxidant, etc.) and noise level in accordance with the Basic Environment Control Law. Moreover, in accordance with the Air Pollution Control Law, the permissible limit is stipulated for each of the emissions (CO, HC, NOx, and PM) from motor vehicles being operated under certain prescribed conditions. Also, permissible limits for each of the motor vehicle noise levels (proximity stationary noise level, steady running noise level, and acceleration running noise level) are set based on the Noise Reduction Law (see Figure 3A-1).


Figure 3A-1 Basic Legal System for Motor Vehicle Environmental Pollution Control

4. The MLIT implements the motor vehicle emission control standards and motor vehicle noise control standards by means of the Safety Regulations for Road Transport Vehicles so that the permissible limits stipulated under the provisions of the Air Pollution Control Law and the Noise Regulation Law (Safety Regulations Nos. 30 and 31) may be assured.

3) Traffic-Related Laws and Regulations

5. Traffic-related laws and regulations consist of the Road Traffic Act, Road Transportation Act, and Truck Transportation Business Act. The Road Traffic Act aims to secure the safety and smooth travel of all road users, both pedestrians and vehicle users. This Act includes traffic rules for pedestrians (where to walk, how to cross roads, etc.), bicycles (where to run, requirement of bicycles to run, etc.), vehicles (how to drive safely, etc.), driving licenses, and traffic penalties.

4) Recycling System for Vehicles

6. To reduce waste and establish a recycling-oriented society where resources are effectively

*Setting of environmental quality standards for air pollution and noise level

Ministry of the Environment

Ministry of Land, Infrastructure, Transport and

Tourism

Setting of permissible limits for motor vehicle emission

Consideration for assurance of permissible limits

Consideration for assurance of permissible limits

Setting of permissible limits for motor vehicle noise level

Basic Environmental Control Law

Air Pollution Control Law Noise Regulation Law

Road Transport Vehicle Act


3A-6

utilized, the End-of-Life Vehicle Recycling Law defines the roles of automobile manufacturers and importers, businesses involved in recycling, and motor vehicle users to facilitate the recycling of motor vehicles (see Figure 3A-2). Owners of motor vehicles will need to pay a fee for recycling their vehicles. All four-wheeled vehicles (including large vehicles and commercial vehicles such as trucks and buses) are principally subjected to the Law. The recycling fee varies from vehicle to vehicle, according to its manufacturer or model (see Table 3A-4). The fee is determined based on the necessary costs of recycling the vehicle. In principle, the recycling fee needs to be paid to the Japan Automobile Recycling Center (JARC) only once per vehicle. In case the vehicle owner chooses to sell a vehicle as a used car, for which he/she has paid the recycling fee, he/she will receive the paid amount from the next owner of the vehicle, in addition to the vehicle's sale value received.

Source: Japan Automobile Recycling Center (JARC)

Figure 3A-2 Vehicle Recycling Process

Table 3A-4 Recycling Fee by Vehicle Type

Vehicle Type Recycling Fee (JPY)

Medium-sized car 10,000–18,000

Small and compact car 7,000–16,000

Truck 10,000–12,000

Large bus 40,000–65,000

Source: METI

Appendix3B

The Preliminary Works for the Technical Cooperation on Low-emission Transport System FINAL REPORT: APPENDIX

3B-1

APPENDIX 3B Guidelines for Converted Electric Vehicles (Translation of the Publication by EV Conversion Division of the Association for the Promotion of Electric Vehicles; April 27, 2011)

1. INTRODUCTION

Converted electric vehicles and other automobiles to be driven on roads must have the structure and equipment conforming to the technical requirements specified in the legislation related to the Road Transport Vehicle Act1. A useful reference on technical requirements is a document entitled “Points to Keep in Mind for Electric Vehicle Conversion (EV conversion)” issued by the Kanto District Transport Bureau, Ministry of Land, Infrastructure, Transport and Tourism on September 29, 2010. However, the document does not fully cover all applicable requirements because converted electric vehicles greatly vary with regard to base vehicle structure, details of the conversion, and the parts used.

To ensure vehicle safety and reliability, it is necessary to assume that conversion is carried out as a business involving the selling of vehicles to an unspecified large number of users. Based on this point of view, the Conversion Division of the Association for the Promotion of Electric Vehicles has established the Guidelines for Converted Electric Vehicles (which is presented in this document). It covers extensive technical requirements, ranging from those that must be satisfied, to voluntary standards which should be satisfied. These Guidelines also stipulate precautions to take as needed when applying the requirements specified in the legislation related to the Road Transport Vehicle Act to converted electric vehicles to supplement the Points to Keep in Mind for Electric Vehicle Conversion described above.

The Conversion Division will continue to strive in updating the reference based on the actual status with regard to converted electric vehicles, such as the technologies employed and how such vehicles are used. These Guidelines will undergo review and revision as needed to respond to the actual status.

1For details of the related legislation, refer to the following websites: Safety Standards for Road Transport Vehicles (Ordinance No. 67 of the Ministry of Transport enacted on July 28,

1951) and Notification of Details of Safety Standards for Road Transport Vehicles (Notification No. 619 to the Ministry of Land, Infrastructure, Transport and Tourism enacted on July 15, 2002) http://www.mlit.go.jp/jidosha/kijyun/kokujitou_index.pdf

Regulations regarding Paperwork to Be Examined, established by the National Agency of Vehicle Inspection http://www.navi.go.jp/images/info/pdf/Shinsajimukitei.pdf


3B-2

2. TABLE OF CONTENTS

Chapter1 Scope ................................................................................................................. 3B-4 Chapter2 Definition of Terms ........................................................................................... 3B-4 Chapter3 Technical Requirements for Structures and Devices ................................... 3B-5

I. General Electric Devices .................................................................................................. 3B-5 1. Compliance with requirements specified for electric devices in the Notification of

Details .......................................................................................................................... 3B-5

2. Colors of electric cables ............................................................................................... 3B-5

3. Protection against electric shock in case of collision ................................................... 3B-5

4. High-voltage shutoff system ......................................................................................... 3B-6

5. Electromagnetic compatibility (EMC) ........................................................................... 3B-6

6. Monitoring of insulation resistance .............................................................................. 3B-6

II. Drive Batteries ................................................................................................................... 3B-6 1. Drive battery safety ...................................................................................................... 3B-6

2. Method of drive battery installation .............................................................................. 3B-6

3. Inspection of drive battery electrolyte .......................................................................... 3B-7

4. Drive battery life indicator ............................................................................................ 3B-7

III. Motors and Drive-trains .................................................................................................... 3B-7 1. Strength of connection between motor and drive-train ................................................ 3B-7

2. Strength of drive-train................................................................................................... 3B-7

3. Motor fixing method ...................................................................................................... 3B-7

4. Waterproof measures for high-voltage motor controller .............................................. 3B-8

5. Wires to the motor ........................................................................................................ 3B-8

6. Water resistance of in-wheel motors............................................................................ 3B-8

7. Vehicle running performance ....................................................................................... 3B-8

8. Method for confirming maximum output, rated output, and maximum torque ............. 3B-8

IV. Speed Controllers and Accelerators ............................................................................... 3B-9 1. Failsafe functions and other functions for speed controllers and the like ................... 3B-9

2. Throttle safety .............................................................................................................. 3B-9

3. Installation of contactors .............................................................................................. 3B-9

V. DC/DC Converters and In-vehicle Battery Chargers ................................................... 3B-10 1. DC/DC converters ...................................................................................................... 3B-10

2. In-vehicle battery chargers ......................................................................................... 3B-10

VI. Brakes .......................................................................................................................... 3B-10 1. Alternative devices, such as servo brake systems (changing the negative-pressure

source and the air source) ......................................................................................... 3B-10

2. Installation of electric regeneration brakes ................................................................ 3B-10

VII.Prevention of Sudden Starting due to Incorrect Operation ....................................... 3B-10 VIII.Other Devices ................................................................................................................. 3B-12


3B-3

1. Alternatives to power steering pumps ........................................................................ 3B-12

2. Alternatives to defrosters ........................................................................................... 3B-12

3. Vehicle proximity warning devices ............................................................................. 3B-12

Chapter4 Attached Sheets for Notification of Conversion ......................................... 3B-12 Chapter5 Responsibilities of Vehicle Conversion Shops ........................................... 3B-13


3B-4

3. CONTENTS

Chapter1 Scope

These Guidelines were established for electric vehicles converted from relatively small 4-wheel vehicles equipped with manual transmission and that had been previously driven on roads (had once been assigned license plates). These Guidelines may be referred to for electric vehicles converted from other vehicles as well.

Provisions using “shall” indicate requirements to be satisfied and provisions using “should” indicate recommendations in these Guidelines.

Chapter2 Definition of Terms

Definitions of terms used in these Guidelines are specified below and in legislation related to the Road Transport Vehicle Act, such as Attachment No. 110, Technical Standards for Protection of Passengers from High Voltages in Electric and Electric Hybrid Vehicles to the Notification of Details of Safety Standards for Road Transport Vehicles (Notification No. 619 to the MLIT enacted on July 15, 2002) (hereafter called the Notification of Details.)

(1) Vehicles made on or after yyyy refer to vehicles shipped by automobile makers (automobile

manufacturers) on or after yyyy. Generally, the year of the initial registration or initial

inspection stated on each vehicle’s inspection certificate applies.

(2) EMC refers to electromagnetic compatibility, or the ability of an electric device to function

properly without causing any electromagnetic interference and without failing due to

electromagnetic waves.

(3) ECE Rule No. refers to the number of one of the rules established for safety of automobiles

under the 1958 Agreement (Agreement concerning the Adoption of Uniform Technical

Prescriptions for Wheeled Vehicles, Equipment and Parts Which Can Be Fitted and/or Be

Used on Wheeled Vehicles and the Conditions for Reciprocal Recognition of Approvals

Granted on the Basis of These Prescriptions).

(4) WP29 refers to the World Forum for Harmonization of Vehicle Regulations, which was

established within the United Nation Economic Commission for Europe for activities

including the establishing of internationally harmonized standards for automobile safety and

environment and managing the 1958 Agreement and the 1998 Agreement (Agreement

concerning the Establishing of Global Technical Regulations for Wheeled Vehicles,

Equipment and Parts Which Can Be Fitted and/or be Used on Wheeled Vehicles).

(5) An accelerator refers to a potentiometer operated from an accelerator pedal via a wire or

other means.

(6) An accelerator position meter refers to a potentiometer directly connected to an accelerator

pedal.

(7) A speed controller refers to a device that controls the rotation of a motor.

(8) A contactor refers to a device (relay) that controls a large current by using a small current to

protect a contact frequently switched under high current and other severe conditions.


3B-5

Chapter3 Technical Requirements for Structures and Devices

I. General Electric Devices

1. Compliance with requirements specified for electric devices in the Notification of Details

(1) Electric devices shall comply with requirements specified in Article 99.2 of the Notification of Details.

(2) Electric devices shall comply with requirements specified Article 99.4 of the Notification of Details.

Explanation: Compliance with Articles 99.2 and 99.4 of the Notification of Details is essential for vehicles

converted from those made in or after July 2012. Article 99.2 specifies the requirements for protection against electric shock caused by

high-voltage circuits (including protection against direct and indirect contact), drive battery requirements (including the installation of protective devices against overcurrent and the method for installing open type drive batteries that generate hydrogen gas), the requirements for the indication of standby and operable states, and other requirements.

Article 99.4 specifies requirements stating that a drive battery pack shall be installed in a specified position (at least 420 mm from the front edge of vehicle, at least 65 mm from the rear edge of vehicle, and at least 130 mm from the outermost side of vehicle) and that it shall be installed reliably so as to withstand vibration, impact, and other stresses.

2. Colors of electric cables

(1) High-voltage cables, excluding those inside enclosures, shall be identified with orange external coating.

Explanation: This requirement was established in response to the requirement specified in Revision 01 series to ECE Rule No. 100 (Attachment No. 110 to the Notification of Details will soon be revised to reflect the revision of these Standards in Japan).

(2) DC electric cables shall have red coating on the positive end and black coating on the negative end. High-voltage cables with orange coating may be marked in red and black at the ends of the orange coating.

3. Protection against electric shock in case of collision

Electric devices should have a mechanism that shuts off high-voltage circuits using inertia relays or the like in case the vehicle is involved in a collision.

4. High-voltage shut-off system

(1) Vehicles shall be equipped with a service plug that shuts off high voltage without the use of any tool in order to protect workers from electric shock during maintenance work.

(2) If the installation of a service plug is impossible, the vehicle shall be equipped with a circuit breaker that shuts off high voltages without the use of any tool. The circuit breaker shall be structured so that the drive battery enclosure cannot be opened when the circuit breaker is ON and the circuit breaker cannot be turned ON when the drive battery enclosure is open.


3B-6

5. Electromagnetic compatibility (EMC)

Electric devices, particularly, speed controllers, should be verified by their manufacturers regarding the electromagnetic compatibility in the environment where vehicles are used.

Explanation: Article 99.1 of the Notification of Details specifies the mandatory requirements that electric waves emitted from electric devices shall not disturb functions of radio equipment. In addition, electric devices should have immunity to electromagnetic waves to function properly. The requirement for electromagnetic compatibility is specified here and ECE Rule No. 10 will soon be added to the Notification of Details in order to specify concrete EMC testing methods.

6. Monitoring of insulation resistance

Electric devices should be equipped with detectors to monitor the insulation resistance between the live components and the electrical chassis.

II. Drive Batteries

1. Drive battery safety

(1) Drive batteries shall have a system to shut off the power supply when they are fully charged, in order to prevent overcharging.

(2) Drive batteries shall have appropriate anti-heat radiation measures.

Explanation: There is an international movement toward further safety measures for drive batteries. For example, UN/ECE/WP29 is considering requirements for assurance of safety of lithium ion batteries. These Guidelines need to be reviewed in response to the changing situations.

2. Method of drive battery installation

The drive battery pack shall be installed as specified in below:

(1) The drive battery pack shall be installed in such a way that the weight balance of the converted vehicle shall not exceed the weight balance of the base vehicle.

(2) The drive battery pack shall satisfy the installation strength specified in Attachment No. 111 to the Notification of Details.

Explanation: Attachment No. 111 to the Notification of Details specifies the following requirements: The drive battery shall not rupture under acceleration in a direction in parallel with the

vehicle center line of ±196 m/s2(in the case of small cars). The drive battery shall not rupture under acceleration in a direction perpendicular to the

vehicle center line of ±78.4 m/s2(in the case of small cars).

3. Inspection of drive battery electrolyte

The enclosure, barrier or other casing of the drive battery shall be structured so as to facilitate maintenance in order that the electrolyte level and specific gravity can be checked at the intervals recommended by the manufacturers of the drive battery.


3B-7

4. Drive battery life indicator

The driver’s seat shall be equipped with an indicator to allow a driver to estimate the remaining life of the drive battery or remaining travel distance.

III. Motors and Drive-trains

1. Strength of connection between motor and drive-train

(1) The motor-transmission connection shall be via a metal plate of sufficient strength and made to a sufficient accuracy.

(2) The motor shall be installed in such a way that motor rotations will not cause abnormal vibrations or damage the drive-train, including the transmission.

Explanation: The requirements specified in the safety standards state that the motor-transmission connection shall be rigid enough to withstand the running of the vehicle. Points to which particular attention should be paid with regard to converted electric vehicles are stated here as a supplement to that requirement.

2. Strength of drive-train

(1) The maximum motor torque shall be within a range that ensures the strength of the drive-train. For example, when a converted vehicle uses the unmodified drive-train (including the transmission) of the base vehicle and the maximum motor torque does not exceed the maximum engine torque of the base vehicle, the motor shall be considered to comply with this requirement.

(2) If the maximum motor torque can be easily changed, for example, by setting a controller, to a value exceeding the motor installation strength or the drive-train strength, such simple changes shall be prevented by taking appropriate measures, for example, by sealing the motor.

Explanation: The requirements specified in the safety standards state that the drive-train shall be rigid. Points to which particular attention should be paid for converted electric vehicles are stated here as supplementary requirements.

3. Motor fixing method

The motor shall be installed in a way to ensure a strength equivalent to the strength of existing engine mount. When a converted vehicle uses the engine mount of a base vehicle without any modification and the weight and maximum torque of its motor does not exceed the weight and maximum torque of the engine of the base vehicle, the motor shall be considered to comply with this requirement.

Explanation: The requirements specified in the safety standards state that the motor shall be installed in a rigid way. A point to which particular attention should be paid with regard to converted electric vehicles is stated here as a supplementary requirement.

4. Waterproof measures for high-voltage motor controller

(1) In cases where the motor is not waterproof, measures shall be taken to equip it so that


3B-8

motor is prevented from getting wet while the vehicle is running in the rain or when it is being washed.

(2) Parts, wires, and other components of the motor circuits shall be waterproof.

(3) Stringent waterproofing measures shall be taken during accelerator installation, for example, installing it inside the passenger compartment or putting it in a waterproof box installed in a position inside the engine room where it is unlikely to be splashed by water.

5. Wires to the motor

(1) To prevent wires and terminals from burning, electric cables suitable for the amount of current shall be used. In particular, wires used for circuits that connects the drive battery to the motor shall be able withstand the maximum driving current.

(2) Wires and terminals shall be strong enough to withstand the operating environment of the vehicle.

6. Water resistance of in-wheel motors

In-wheel motors shall cause no electric leakage, failures or other problems in the normal operating environment.

Explanation: The requirements specified by Article 88.1 of the Notification of Details state that the motor shall fully withstand the running of the vehicle. A point to which particular attention should be paid for converted electric vehicles is stated here as a supplementary requirement.

7. Vehicle running performance

Converted vehicles shall satisfy the following conditions depending on their classification:

Ordinary vehicles: GVW (Gross vehicle weight)≲135×kW(Maximum output)−1500

Small vehicles and light motor vehicles: GVW (Gross vehicle weight) ≲ 122×kW(Maximum output)−600

8. Method for confirming maximum output, rated output and maximum torque

The maximum output, rated output and maximum torque values may be derived from performance curves or specifications provided by motor manufacturers or other parties or from nameplates or other labels attached to motors.

IV. Speed Controllers and Accelerators

1. Failsafe functions and other functions for speed controllers and the like

(1) To ensure stable performance, appropriate heat radiation measures to prevent damage caused by heat shall be adopted for the speed controller and other similar devices (hereafter called “the speed controller or the like”).

(2) If any abnormality occurrences regarding the speed controller or the like, such as an abnormal temperature rise, the driver sitting in the driving seat shall be alerted.

(3) The speed controller or the like should be designed so as to not allow unintended accelerations and to not hinder the driver’s intended deceleration in cases of abnormality, disconnection or short circuit affecting the accelerator signal input line, or in cases where


3B-9

the accelerator or throttle position meter is disconnected, short circuited or gets stuck.

Explanation:

These standards require devices to work properly in cases of abnormality. For example, speed controllers are required to detect the occurrence of abnormality and block the base (i.e., shut off the power supply and the regeneration) and allow free running, and mechanical braking systems are required to maintain their function in cases of abnormality.

We will consider establishing requirements for brake override systems in response to changing situations.

2. Throttle safety

(1) If the accelerator is used for motor rotation control, it shall have double return springs in order that its operation will be cancelled when a driver is not operating the accelerator pedal.

(2) The accelerator shall be smoothly actuated by operation of the accelerator pedal, and the return springs of the accelerator pedal and accelerator shall have sufficient return strength.

(3) If an accelerator position sensor directly connected to the accelerator pedal is used for motor rotation control, it shall have double return springs in order that its operation will be cancelled when a driver is not operating the accelerator pedal.

Explanation: The safety standards require the installation of double accelerator return springs. Points to which particular attention should be paid for converted electric vehicles are stated in (1) and (3) as supplementary requirements.

3. Installation of contactors

(1) A contactor shall be installed between the drive battery and the speed controller, and it shall fully withstand frequent switching under severe conditions.

(2) The contactor shall have a rating higher than the maximum current of the speed controller and also higher than ratings of high-voltage circuit protective devices, such as fuses and circuit breakers.

V. DC/DC Converters and In-vehicle Battery Chargers

1. DC/DC converters

(1) Appropriate measures shall be taken to prevent a vehicle from running when lights or other auxiliary equipment is inoperable and to prevent such equipment from becoming inoperable when the vehicle becomes unable to run due to a voltage drop of the drive battery or for another reason. One example is equipping the vehicle with auxiliary equipment batteries powered from a DC/DC converter. The auxiliary equipment batteries may also be powered by solar cells.

(2) A vehicle with no auxiliary equipment batteries shall have a DC/DC converter with regard to which the output current can withstand the maximum power consumption of the auxiliary equipment being used.


3B-10

2. In-vehicle battery chargers

(1) The in-vehicle battery charger shall be designed to stop power supply when the drive battery is fully charged.

(2) The in-vehicle battery shall not shorten the travel distance or adversely affect the service life of the drive battery.

(3) The in-vehicle battery shall comply with specifications required by drive battery manufacturers and others.

VI. Brakes

1. Alternative devices, such as servo brake systems (changing the negative-pressure source and the air source)

(1) If an electric vehicle is converted from a base vehicle that is equipped with a servo brake system using engine negative pressure, the electric vehicle shall be equipped with an electric negative-pressure pump or the like to ensure braking assistance equivalent to the original brakes of the base vehicle.

(2) An alert system shall be mounted on the driver’s seat to indicate any failure of the electric negative-pressure pump or other assistance device (including the loss of negative pressure).

2. Installation of electric regeneration brakes

(1) An electric regeneration brake should be mounted as an alternative to engine braking.

(2) The electric regeneration brake should be operable even if the drive battery is fully charged.

Explanation: If the vehicle has no electric regeneration brake, the person in charge of converting the vehicle shall be responsible for ensuring the safety of the vehicle.

VII. Prevention of Sudden Starting due to Incorrect Operation

A vehicle shall have a system that shows the driver the standby or operable state according to the requirement in I 1.(1). Measures shall be taken to prevent sudden starting and other accidents due to incorrect operation in accordance with the following requirements.

(1) With regard to operations for the switching of a vehicle into an operable state, there should be measures to ensure safety when a vehicle starts moving.

Explanation: Today, manual transmission vehicles have a mechanism (clutch start system) that allows the engine to start only when the clutch pedal is pressed down. Automatic transmission vehicles have a key interlock function that allows the ignition key to be pulled out only when the shift lever is in Park and a shift lock function that allows the shift lever to be moved from Park only when the brake pedal is pressed down. Converted electric vehicles shall have appropriate measures created in reference to these functions. One possible example is to equip electric vehicles converted from manual transmission vehicles with a system that prevents ignition from turning on when the accelerator pedal is pressed or allows the shift lever from being moved from the Park range for creeping only when the brake pedal is pressed.


3B-11

(2) The state of running direction control unit should be able to be identified by a driver.

Explanation: This requirement is based on the requirements specified in Revision 01 series to ECE Rule No. 100 (Attachment No. 110 to the Notification of Details will soon be revised in Japan to reflect this revision). This requirement specifies that there be an indication on the instrument panel, independently of the gearbox indication specified in the Notification of Details under Article 10 of the existing safety standards.

(3) When the running direction control unit is in the reverse position, this state shall be notified to a driver by using a buzzer or other means. If such a function is not provided for the base vehicle, it should be added to the vehicle.

(4) The reverse speed shall be adequately restricted.

(5) A vehicle with no gearbox should be designed to allow the shift lever to be moved from Drive to Reverse and vice versa only when the accelerator pedal is not pressed

(6) When the vehicle has a creep mechanism, creeping shall be controlled properly.

Explanation: Properly controlled creeping contributes to convenience and safety at the time of hill starting or when parking in a garage. It has another advantage that when the brake pedal pressing force is reduced and the shift lever position differs from that intended by the driver (for example, when the driver thinks the shift lever is in Neutral but it is actually in Drive), the driver can recognize the misunderstanding without pressing the accelerator pedal. However, further consideration is required as to whether this function is required.

(7) The requirement in I1.(1) specifies that a vehicle should be equipped with a device that indicates to a driver that the vehicle is in a standby or operable state. This “indication” shall be a visual indication that is sufficient to enable a driver to be aware that the vehicle is in said state. In addition, if a vehicle is still in an operable state when a driver leaves it, an alert signal (such as an optical or audio signal) should be given to the driver.

Explanation: The latter part of this requirement is specified in ECE Rule No. 100.

(8) An alert should be issued when the ignition key is pulled out without the parking brake having been operated first.

(9) A device that indicates that charging is in progress should be mounted on the driver’s seat side.

(10) A vehicle shall be structured to be kept inoperable during charging from a fixed power supply.

Explanation: This requirement is based on the requirement specified in Revision 01 series to ECE Rule No. 100 (Attachment No. 110 to the Notification of Details will soon be revised in Japan to reflect this revision).

VIII. Other Devices

1. Alternatives to power steering pumps

(1) When an electric vehicle is converted from a base vehicle equipped with electric power steering, the control force of the converted electric vehicle shall be equivalent to that of


3B-12

the base vehicle.

(2) When an electric vehicle is converted from a base vehicle equipped with hydraulic power steering, the elimination of the power steering function is unavoidable. However, the converted electric vehicle should have a control force equivalent to that of the base vehicle, for example, by the installation of an electrically actuated hydraulic pump.

2. Alternatives to defrosters

The defroster of a converted electric vehicle shall have a performance equivalent to that of the base vehicle.

3. Vehicle proximity warning devices

Converted electric vehicles should be equipped with a vehicle proximity warning device as specified in the Guidelines for Measures for Hybrid and Other Quiet Vehicles, the attachment to the Notification of the Guidelines for Measures for Hybrid and Other Quiet Vehicles (Announcement No. 255of Engineering and Safety Department, Road Transport Bureau, MLIT, issued on January 29, 2010).

Chapter4 Attached Sheets for Notification of Conversion

It is necessary to notify district transport bureau branches (regional offices of the Light Motor Vehicle Inspection Organization for light motor vehicles, or main branch offices of the National Agency of Vehicle Inspection for other types of vehicles) in advance of the conversion of a vehicle. For notification, the following documents shall be submitted:

List of electric devices )

A sheet describing considerations with regard to compliance with technical standards related to protection against electric shock

A calculation sheet for the strength of the drive battery pack mounting

A sheet describing considerations with regard to compliance with EV conversion structure standards and a check sheet of measures against electric shock taken for electrically live components

Diagrams of high-voltage circuits

Data that identifies the motor model and data that identifies the maximum output (rotation speed), the rated output (rotation speed), and the maximum torque (rotation speed) of the vehicle to be converted (Examples are performance curves and specifications provided by motor manufacturers or other parties, and nameplates and other labels attached to motors.)

Calculation sheet for motor mounting strength for a vehicle whose motor weight or maximum torque exceeds the engine weight or maximum torque or for a vehicle which does not directly use the engine mount of the base vehicle

Drawings showing dimensions of connecting flanges and other parts for the connection between the motor and the transmission, calculation sheet for connection strength, and other documents

Chapter5 Responsibilities of Vehicle Conversion Shops

(1) Vehicle conversion shops shall prepare the following documents and provide them to vehicle users to ensure the proper maintenance, management, and use of converted


3B-13

electric vehicles.

Documents describing details of the conversion

Lists of devices and parts added

Inspection and maintenance manuals (describing the maintenance of parts, drive battery replacement procedures, etc.)

Circuit diagrams

Documents giving precautions regarding the driving of a converted electric vehicle

(2) When selling converted electric vehicles, vehicle conversion shops shall fully explain to users about the use, maintenance, and management of the converted electric vehicles.

(3) Vehicle conversion shops shall provide users with full information about the drive battery, motor, and other parts added for conversion with clear instructions with regard to required inspection cycles, items, and methods, based on information provided by the manufacturers or vendors of the parts.

(4) Vehicle conversion shops shall provide users with full information about charging equipment and charging methods by referring to the Guidebook for Installing Charging Equipment for Electric Vehicles and Plug-in Hybrid Vehicles (METI and MLIT, December 2010).

Supplementary provision

These Guidelines shall come into force on May1, 2011.

Appendix4A


4A-1

APPENDIX 4A: Preliminary Analysis on Vehicle Tax and Road Transport Finance

1. In Lao PDR, all new road construction–including major repairs and rehabilitation–are financed from the general budget, which is raised mainly from general taxation. On the other hand, the cost of road maintenance is mostly funded from a special Road Maintenance Fund (RMF) created in 2002 from a special levy on fuel, toll on crossing bridges, and penalties for truck overloading. Understandably, the bulk of the RMF is from fuel tax, which is currently set at LAK420/liter of diesel and gasoline. Table 4A-1 below shows the amounts collected from fuel tax, as well as the implied volume in liters.

Table 4A-1 Road Maintenance Fund from Fuel

Year Amount (LAK billion) Volume (m liters) No. of Vehicles Ave. Consumption

2007 98.21 280.6 641,081 437.7

2008 127.02 362.9 768,606 472.1

2009 174.25 497.8 940,844 529.1

2010 211.65 604.7 1,008,788 599.4

2011 263.98 730.0 1,141,858 639.3

2012 319.90 761.6 1,288,700 591.0

Source: MPWT

Note: Rate was adjusted from Kip350 to Kip420 in Oct 2011

2. It is reported that the RMF is being used to maintain 16,179 km of roads (data as of 2012), which is nearly 50% of the country’s total road network of 31,210 km (data as of 2004). About 23% of the road network is classified as national roads, 21% as provincial roads, and the balance of 56% as district, rural, urban, and special roads. This means that the RMF is insufficient to preserve the total road assets. Additional funds are secured from the general budget, which for 2012-13 is estimated at LAK236.4 billion for 21,844 km of roads. On average, therefore, the maintenance cost per kilometer is USD1,925/km. This may, or may not be, adequate. That is something the road authority (Department of Roads) has to determine.

3. Usually, a review of the level of support needed for road maintenance and construction is the precursor to proposed changes in the taxes affecting motor vehicles. The current proposal, however, is totally unrelated to the issue of sufficiency of funding for roads.

4. This part starts with the basic principles of road transport finance, and how the current proposal fits into this framework. Figure 4A-1 illustrates the basic framework for financing road maintenance, arising from X1 (due to natural causes as weather, deterioration, etc.) + X2 (due to wear and tear from users). The capital cost of a road is traditionally financed from general government revenues; but in some countries, is sourced from earmarked funds and/or users’ tolls.


4A-2


Figure 4A-1 Basic Principles of Road Transport Finance

5. When a country builds its road infrastructure, it can do so by financing the road projects on a "pay-as-you-go" basis; that is, paid out of on-going cash flow or annual budget. This would limit the scale of investment in roads. Since the infrastructure lasts for many years, it is only logical to borrow from official development assistance (ODA) sources or by issuing government bonds raised in the capital markets. Bonds must be secured with an expected future cash flow–which can be raised from general taxes or specific taxes on vehicles and related items. Common sources are import and sales taxes on road vehicles, road user fees such as fuel taxes and tolls on highways. Other sources are general revenue. This issue is related to who bears the burden: users or the general public. Ideally, transport users should pay for construction and maintenance. In such a case, all expenditures for roads (construction and maintenance) are paid for from all kinds of taxes on vehicles and road users, including fuel.

6. Another issue concerns the full costs of transportation. There are monetary costs, which are financed with money, as considered above, but there are also non-monetary costs (sometimes called externalities costs), which are paid for by people's time, by clean air, by peace and quiet, etc. To cover the latter or its mitigation, the most common instrument is a carbon tax.

7. In the above figure, there is an annual cost of road maintenance. A portion, X1, is caused by natural causes such as weather effects on road pavements, flooding and erosion. These are difficult to predict or estimate and they vary from one location to another. On the other hand, X2 is more predictable as it is caused by wear and tear due to road traffic. The heavier the vehicle is, the more damage it causes to the roads. This relationship is more geometric than linear, and mitigated by providing more wheels to distribute the load to the road pavement. To cover X1 and X2, the government has to collect taxes in the form of Y1 (from the general budget) and Y2 (from a dedicated special purpose fund).

Annual Cost of

Road Maintenance

Cost due to

weather, etc.

Cost due to

road traffic or

vehicle use

Import Tax on vehicles & other

goods

Annual Fees/ Charges on

Vehicles

Other forms of taxation,

e.g., Excise Tax on Fuel

X1

X2

Y1

Y2

Annual

Road

User

Charges

Budget

from

General

Taxation

Add-on Levy on Fuel/Liter

(e.g.Carbon Tax)

Appendix4B


4B-1

APPENDIX 4B Datasheet on Selected Vehicles for Analysis

Typical Vehicle Model Parameters Present MOF Proposal 2-wheel Motorcycle 1. HONDA Wave 100

Engine (cc): 97

Tax (USD)

Import 141

Tax (USD)

Trading 291 GVW (kg): 92 Excise 99 VAT 29 No. of Seats: 1 VAT 71 Excise* 116 Mileage (km/l): 49 RUC* 7 Asset* 44 CO2 (g/km) 46 Total 317 Environment** 29 CIF Price (USD) 1,175 * annual for 10 years

** annual for 5 years after 5 years use RUC* 7

Middle Price (USD) 352 Total 516 Scooter 2. HONDA Click

Engine (cc): 108

Tax (USD)

Import 240

Tax (USD)

Trading 324 GVW (kg): 99 Excise 168 VAT 32 No. of Seats: 1 VAT 121 Excise* 130 Mileage (km/l): 51 RUC* 8 Asset* 49 CO2 (g/km) 45 Total 537 Environment** 32 CIF Price (USD) 2,000 * annual for 10 years


Middle Price (USD) 600 Total 575 3-wheel 3. Tuktuk

Engine (cc): 650

Tax

Import 171

Tax

Trading 1,950 GVW (kg): 500 Excise 120 VAT 195 No. of Seats: 10 VAT 81 Excise* 780 Mileage (km/l): 10 RUC* 18 Asset* 293 CO2 (g/km) 227 Total 389 Environment** 195 CIF Price (USD) 890 * annual for 10 years


Middle Price (USD) 427 Total 3,431 Car Small Car

(Less than 1,100 cc, and GVW ≤ 1,550 kgs)

4. Toyota Yaris

Engine (cc): 1,498

Tax

Import 2,800

Tax

Trading 7,490 GVW (kg): 1,525 Excise 6,370 VAT 749 No. of Seats: 4 VAT 1,762 Excise* 4,494 Mileage (km/l): 13 RUC* 62 Asset* 2,696 CO2 (g/km) 104 Total 10,994 Environment** 17,227 CIF Price (USD) 14,464 * annual for 12 years


Middle Price (USD) 7,000 Total 32,719 5. Hyundai I 10.1

Engine (cc): 1,086

Tax

Import 434

Tax

Trading 5,430 GVW (kg): 860 Excise 988 VAT 543 No. of Seats: 4 VAT 321 Excise* 3,258 Mileage (km/l): 12 RUC* 24 Asset* 1,955 CO2 (g/km) 99 Total 1,768 Environment** 12,489 CIF Price (USD) 7,000 * annual for 12 years


Middle Price (USD) 1,086 Total 23,699 Medium Car (Less than 2,000CC and GVW <1,950kgs)

6. Honda Civic 1.8ivtec

Engine (cc): 1,798

Tax

Import 3,168

Tax



Middle Price (USD) 7,920 Total 39,259 7. Hyundai Elantra

Engine (cc): 1,591

Tax

Import 636

Tax

Trading 7,955 GVW (kg): 1,228 Excise 1,671 VAT 796 No. of Seats: 5 VAT 500 Excise* 4,773 Mileage (km/l): 13 RUC* 62 Asset* 2,864 CO2 (g/km) 145 Total 2,869 Environment** 18,297 CIF Price (USD) 11,000 * annual for 12 years


Middle Price (USD) 1,591 Total 34,746 HeavyCar (≥2,000cc 𝑎𝑛𝑑 GVW ≥ 2,000kgs)

8. Toyota Camry 2.5V

Engine (cc): 2,494

Tax

Import 4,000

Tax

Trading 12,470 GVW (kg): 2,100 Excise 10,500 VAT 1,247 No. of Seats: 5 VAT 2,736 Excise* 7,482 Mileage (km/l): 11 RUC* 62 Asset* 4,489 CO2 (g/km) 263 Total 17,298 Environment** 28,681 CIF Price (USD) 28,595 * annual for 12 years


Middle Price (USD) 10,000 Total 54,432 9. Toyota Lexus GS350

Engine (cc): 3,500

Tax

Import 6,204

Tax



Middle Price (USD) 15,510 Total 76,362


4B-2

Typical Vehicle Model Parameters Present MOF Proposal Utility Vehicle (UV)

Pick-up 10. Toyota Vigo 2WD

Engine (cc): 2,494

Tax

Import 2,268

Tax



Middle Price (USD) 7,560 Total 54,432 11. Ford Ranger XL

Engine (cc): 3,700

Tax

Import 3,455

Tax



Middle Price (USD) 11,518 Total 80,722 Van 12. Toyota HiAce

Engine (cc): 2,982

Tax

Import 2,088

Tax



Middle Price (USD) 10,440 Total 65,070 13. Hyundai Starex H-1

Engine (cc): 2,497

Tax

Import 1,296

Tax



Middle Price (USD) 6,480 Total 54,497 SUV 14. Toyota Fortuner 1KD

Engine (cc): 2,982

Tax

Import 4,896

Tax



Middle Price (USD) 12,240 Total 65,070 15. Kia Mohave 3.8L LX

Engine (cc): 3,778

Tax

Import 2,212

Tax



Middle Price (USD) 5,529 Total 82,423 16. Toyota Prado VX

Engine (cc): 3,956

Tax

Import 6,768

Tax



Middle Price (USD) 16,920 Total 86,303 16. Land Cruiser LC200 MT

Engine (cc): 4,461

Tax

Import 9,792

Tax





4B-3

Typical Vehicle Model Parameters Present MOF Proposal Truck Small Truck

(GVW 5t>) 18. Kia K2700

Engine (cc): 2,607

Tax

Import 708

Tax

Trading 2,607 GVW (kg): 3,300 Excise 307 VAT 261 No. of Seats: 3 VAT 416 Excise* 1,773 Mileage (km/l): 11 RUC* 177 Asset* 665 CO2 (g/km) 288 Total 1,608 Environment** 991 CIF Price (USD) 7,900 * annual for 17 years


Middle Price (USD) 2,360 Total 6,473 19. Mitsubishi Canter

Engine (cc): 2,998

Tax

Import 4,447

Tax

Trading 2,998 GVW (kg): 4,395 Excise 1,927 VAT 300 No. of Seats: 3 VAT 2,428 Excise* 2,039 Mileage (km/l): 11 RUC* 177 Asset* 764 CO2 (g/km) 223 Total 8,979 Environment** 1,139 CIF Price (USD) 30,881 * annual for 17 years


Middle Price (USD) 14,823 Total 7,417 20. Isuzu Elf

Engine (cc): 2,999

Tax

Import 6,317

Tax



Middle Price (USD) 21,056 Total 7,419 Medium Truck (GVW 5 - 8t)

21. Hino NT450 Atlas

Engine (cc): 2,998

Tax

Import 6,006

Tax



Middle Price (USD) 20,021 Total 7,417 22. Hino Ranger

Engine (cc): 5,123

Tax

Import 10,025

Tax

Trading 5,123 GVW (kg): 7,970 Excise 4,344 VAT 512 No. of Seats: 2 VAT 5,475 Excise* 3,484 Mileage (km/l): RUC* 221 Asset* 1,306 CO2 (g/km) 354 Total 20,065 Environment** 1,947 CIF Price (USD) 69,619 * annual for 17 years


Middle Price (USD) 33,417 Total 12,593 23. Isuzu Forward

Engine (cc): 7,955

Tax

Import 10,257

Tax



Middle Price (USD) 34,190 Total 19,388 Large Truck (GVW <8t)

24. Isuzu Giga

Engine (cc): 9,839

Tax

Import 19,238

Tax

Trading 9,839 GVW (kg): 24,950 Excise 11,543 VAT 984 No. of Seats: 2 VAT 14,701 Excise* 6,691 Mileage (km/l): RUC* 221 Asset* 2,509 CO2 (g/km) 647 Total 45,704 Environment** 3,739 CIF Price (USD) 200,400 * annual for 17 years


Middle Price (USD) 96,192 Total 23,982 Bus Small Bus

(< 29 Seats) 25. Hyundai County

Engine (cc): 3,907

Tax

Import 2,160

Tax

Trading 3,907 GVW (kg): 6,360 Excise 2,592 VAT 391 No. of Seats: 19 VAT 1,765 Excise* 2,657 Mileage (km/l): RUC* 177 Asset* 996 CO2 (g/km) 647 Total 6,694 Environment** 1,485 CIF Price (USD) 21,000 * annual for 17 years


Middle Price (USD) 10,800 Total 9,612 Medium Bus (30 - 49 Seats)

26. Mitsubishi Rosa

Engine (cc): 2,998

Tax

Import 6,171

Tax



Middle Price (USD) 30,855 Total 7,417 27. Hino Melpha

Engine (cc): 6,403

Tax

Import 16,253

Tax


** annual for 12 years after 5 years use

RUC* 177 Middle Price (USD) 81,264 Total 15,640


4B-4

Typical Vehicle Model Parameters Present MOF Proposal

28. Hino Poncho

Engine (cc): 5,123

Tax

Import 15,299

Tax

Trading 5,123

GVW (kg): 7,590 Excise 18,359 VAT 512

No. of Seats: 36 VAT 12,609 Excise* 3,484

Mileage (km/l): 6 RUC* 199 Asset* 1,306

CO2 (g/km) 409 Total 46,467 Environment** 1,947

CIF Price (USD) 159,369 * annual for 17 years ** annual for 12 years after 5 years use

RUC* 199


Large Bus (< 50 Seats)

29. Mitsubishi Aero Queen

Engine (cc): 12,808

Tax

Import 40,844

Tax

Trading 12,808

GVW (kg): 15,755 Excise 49,013 VAT 1,281





RUC* 199


30. Mitsubishi Aero Star

Engine (cc): 7,545

Tax

Import 20,382

Tax

Trading 7,545

GVW (kg): 14,415 Excise 24,458 VAT 755





RUC* 199


1) Price of Tuktuk will be about 1.5 times due to high emission. 2) Proposed tax rate is based on the displacement. So there is no special treatment on Korean vehicles like current system. In current system, the standard prices of Korean vehicles are lower than others. RUC = road user charge