'Chinamaxxing': Asia’s megacities should follow China’s lead in electrifying urban transport

Urbanization and births will add a billion more people between now and 2050. Jakarta and Dhaka, with 42 million and 37 million people respectively, have overtaken Tokyo at 33 million as the world’s biggest metropolises. Delhi, Shanghai, Guangzhou, Manila, Kolkata, Seoul, Karachi, and Bangkok aren’t far behind.

Keeping that many people on the move is a challenge at the best of times. When the price of road fuel doubles, it becomes a nightmare.

The good news is that one country has been through this cycle already: China. It offers a guide for how to cut oil import bills and transport costs for citizens, reduce pollution from noise and exhaust smoke, and make urban life less unpleasant. Asia’s megacities can follow the ‘Chinamaxxing’ trend that’s taken over social media lately.

From the perspective of a rich country, it’s easy to think the electrification of transport is all about passenger cars. In emerging Asia, however, the real gains are to be made in scooters, motorbikes, trucks and buses.

Two-wheelers are most ripe for EV disruption. Parts of Asia are already moving towards hard restrictions on petrol-run bikes and scooters. Most Chinese cities have had such restrictions for a decade or more, making them motorbike-free zones. Nearly 60% of sales are already fully electric.

Falling battery costs are now changing the game across the region. In India, a base model Ola S1 electric scooter costs about ₹90,000, compared to ₹78,000 for a petrol-powered Honda Activa. That’s close enough to make the electric bike a serious proposition, especially considering savings on maintenance and fuel. With small batteries that can typically be swapped and charged at home, such bikes don’t need costly infrastructure either.

They also offer a quick route to making the urban environment more pleasant. Conventional mobikes and scooters disproportionately contribute to particulate pollution, and just one can make as much noise as 30 electric bikes. Visit EV-dominated major Chinese cities these days and it is striking how quiet they can be.

Unfortunately, the sector elsewhere has been held back by baffling policy reversals. Indonesia, the third-largest two-wheeler market, announced the cancellation of its EV subsidies last year. India, the biggest, recently cut GST on conventional bikes from 28% to 18%. That’s still higher than the 5% tax levied on EV bikes, but the latter’s reduced discount has made electric models less price competitive. Policies encouraging a wholesale switch should be expanded and held in place.

Trucks will be a harder fix, but there are opportunities there too. Asian megacities, including those in China, already restrict deliveries to night time to prevent vehicles cramming up the road—but that creates its own problems, because noisy diesel engines ruin everybody’s sleep. Smaller trucks are already cost-competitive once you factor in fuel expenses, but operators still lack an incentive to switch.

Cities should complement their night-delivery rules with charges for non-electric deliveries, similar to those employed in Europe’s low-emission zones. The revenue can be used to provide low-cost loans for drivers to switch to cleaner vehicles.

Buses form the last part of the picture. In China, two-thirds of the fleet and 97% of city bus sales are now electric. Typically, these services are state-run, so governments are well placed to act. Though they are a small share of road traffic and fuel consumption, using fleet renewals to stimulate local supply chains will help build capability in manufacturing other heavy-duty vehicles, such as trucks.

We can’t ignore the EV car fleet, but that’s going to be the toughest nut to crack for emerging megacities. It will require comprehensive EV-charging networks and costly subsidies, given the sheer scale of the potential market. It will also funnel money to affluent citizens least in need of it. Metro systems, being built across Asia at a furious pace, are likewise a relatively big-ticket way to tackle fuel, pollution and traffic problems.

Governments should certainly remove any subsidies that still incentivize petrol and diesel usage. But making the transition to electric cars and mass-transit railway systems is a challenge that will take billions of dollars and many years to solve.

For governments struggling with the fiscal headaches spawned by the Iran war, Chinamaxxing two-wheeler, truck and bus fleets will be far quicker, and cheaper.

Fix that problem, and you’ll also make the cities of the future more pleasant places to live. ©Bloomberg

The author is a Bloomberg Opinion columnist covering climate change and energy.