Automotive Dealer head: New tax will drive away electric-vehicle buyers

VISHAM Babwah, CEO of P&V Marketing and president of the TT Automotive Dealers Association, said TT has recently taken a backward step.

By reintroducing taxes on imported vehicles and limiting concessions for the capacity of electric vehicles (EVs), Babwah said, TT’s government is killing the industry for vehicles using clean energy.

Meanwhile, countries like Barbados are making progress in reducing greenhouse gases and carbon emissions through introducing and promoting electric vehicles,

In the 2020-2021 budget in October, Finance Minister, Colm Imbert announced that from the end of that month tax concessions on imported vehicles would be removed. Imbert said with close to a million vehicles on TT’s roads already, the country still spends about $2.5 billion a year (US$400 million) on importing an average of 25,000 cars.

Speaking at the Caricom Virtual Electric Road show on Friday, Babwah said TT’s EV and hybrid car dealers started on their own, developing the industry in TT. But dealers are constantly being shot down by government because they are not major franchise dealers. He said removing concessions for imported vehicles would drive away customers.

“We are doing our part, but we are not getting any support from the government. Currently, they took a backward step...electric and hybrid vehicles will be more expensive than non-hybrid vehicles”

In a subsequent conversation with Newsday, Babwah said an EV could cost about 20 per cent more than an internal combustion vehicle, but people who buy them would see the value, especially at the pump, where they would not use any gas at all.

He added that maintenance of the EV would cost about $1,000 a year, which would be much cheaper than maintaining internal combustion vehicles, which have over 2,000 parts which need maintenance and at some point would need to be replaced. Babwah added that in a short time combustion vehicles may become a thing of the past.

However, with the taxes on vehicles imposed in the latest budget, the initial cost of the electric car may be out of the reach of the average citizen.

“The average public servant makes about $7,000. Most would qualify for an $80,000 loan, but EVs cost somewhere around $100,000-$120,000.”

Paylab.com, a local salary-calculating website, indicates that salaries in TT generally range from just under $5,000 to $16,500.

At the road show, Babwah highlighted an announcement in the UK that it intended to cease the export of internal combustion vehicles by 2030.

Dr Gary Jackson, executive director of the Caribbean Centre for Renewable Energy and Energy Efficiency – an institution of Caricom headquartered in Barbados – warned this could result in the region's becoming a “dumping ground” for internal combustion cars.

“Governments need to recognise the transition from internal combustion to electric. We have to remember that we live in a global village and internal combustion engines...are becoming obsolete as countries are moving away from internal combustion.

"You will have a market for those vehicles, but what is going to be important for our region is, we are going to be one of those receivers of this market. These vehicles will get cheaper. People will want to import them if they become cheaper.

"That could mean there will be a stockpile for us, and maybe a dump site. And we have to be mindful of that.”

Panellists at the road show. including Babwah, Jackson and Joanna Edgehill, managing director of Caribbean EV supplier Megapower, all agreed a partnership between all facets of society was needed for the region to be prepared for the transition from gas to electric cars.

Edgehill said, “What we have in Barbados is solid partnerships and a solid, unified approach. We have a government that is speaking to electric transport; we have an electric utility that is speaking to electric transport; we have private-sector agencies, and so on.

"And if you don’t have that, like in the case of TT, then EV uptake is going to be difficult. Support has to come from government for electric-vehicle uptake to become possible across the region.”