The Current State of Electric Cars in the Taiwanese Market
Charging issues, range anxiety, and pricing concerns have made Taiwanese consumers skeptical about electric vehicles. Further government policies and incentives are needed to increase the market share of electric cars.
“The most significant challenge for Taiwanese people to transition from fossil fuel cars to electric vehicles is the charging issue,” said Hsin-Cheng Yeh, former Deputy Director of the Environmental Protection Administration and Professor at the Institute of Sustainable Management and Environmental Education, National Taiwan Normal University. This points towards charging problems hindering the introduction of electric vehicles in the Taiwanese market.
“The most significant challenge for Taiwanese people to transition from fossil fuel cars to electric vehicles is the charging issue.”
In 2022, the National Development Council and other government offices released the “Taiwan 2050 Net Zero Emissions Pathway and Strategy Overview.” Within the part about the transportation sector (which is part of the industrial transformation plan), there is a project whose goal is to achieve a 100% electric car and electric motorcycle market share by 2040. This indicates the Taiwanese government is committed to promoting electric vehicles.
In 2022, of the 429,731 new cars sold in Taiwan, 16,120 were pure electric vehicles, accounting for 3.75% of the total. This was a historical high and the first time electric vehicle sales surpassed the 10,000-unit mark. From the perspective of the Diffusion of Innovation model, the Taiwanese market is entering a critical early adopter phase, and wider adoption of electric vehicles will be influenced by early adopters’ feedback.
To achieve the goal of net-zero carbon emissions by 2050, the Taiwanese government has introduced several subsidies. They include reducing the vehicle acquisition and registration tax from 30% to 15%, introducing environmental incentives, and launching a car trade-in incentive program (when people recycle a vehicle manufactured before the end of 2007, they can receive NT$2000; if they trade the old vehicle in for a new electric car, they can receive a subsidy of $NT12,000). Additionally, the government extended the exemption of the vehicle acquisition and registration tax on electric cars, originally set to end in 2021, to 2025. This tax exemption applies to electric cars with a taxable value of less than NT$1.4 million.
However, whether these government subsidies and tax reduction policies would attract more consumers can be examined through the lens of the Norwegian market. According to research by the Canadian energy company, Exro Technologies, charging infrastructure, range anxiety, pricing, and variety of choices are the most important factors when consumers decide whether they could go electric. Taiwan is still in the early adoption stage. Taiwanese consumers are concerned about these issues.
1. Charging Infrastructure
According to the Ministry of Transportation, as of the first quarter of 2023, there were 6,028 slow charging stations and 1,724 fast charging stations in Taiwan. This has already met the target number of public charging stations for electric vehicles set for October 2024. Additionally, the Ministry has allocated NT$970 million to the Infrastructure Development Program to subsidize local governments and their affiliated transportation agencies to build more charging stations. According to the European Union’s recommendation, there should be one charging station for every ten electric vehicles. With the number of public charging stations, Taiwan can achieve this target.
2. Range Anxiety
Although Taiwan has ample charging stations, they are unevenly distributed. Over half of them are concentrated in metropolitan areas such as Taipei, Taichung, and New Taipei City. This uneven distribution affects the willingness of residents living outside metropolitan areas to purchase electric vehicles.
3. Pricing
Electric cars in Taiwan are eligible for a 50% reduction in the vehicle acquisition and registration tax, and they are also exempt from this tax until 2025. Take the best-selling electric car in Taiwan, the Tesla Model 3, as an example. Its base price is NT$1.75 million. This is the price after the tax reduction. In comparison, the base price for a similar spec vehicle, the Mercedes Benz C-Class, is NT$2.19 million. Electric cars are priced competitively.
4. Variety of Choices
As of 2022, 16 brands including those that offer more affordable cars such as Toyota, Kia, and Hyundai are selling electric cars in the Taiwanese market. The lowest-priced electric car of imported models is the Nissan Leaf. Priced at over NT$1.25 million, it is still not entirely accessible to most consumers.
Based on what can be seen in the Taiwanese market, it is evident that the government is willing to improve the adoption of electric vehicles. However, limited subsidies, high pricing of available models, and existing charging issues hinder consumers’ willingness to purchase electric vehicles.
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