Electric Vehicle prices up

Source: http://www.dailymirror.lk/96385/vehicle-prices-up-from-monday

The unit rate for vehicles through the budget proposal and the new valuation system that introduced recently would increase the prices of vehicles by Rs. 200,000 up to Rs. 2.5 million, the Vehicle Importers Association of Lanka (VIAL) said today.

A new valuation system was introduced recently taking full option manufacturers price as the tax base.

Finance Minister Ravi Karunanayake said presenting the budget, to further strengthen this process of collecting the payable taxes said that the unit rate of excise duty for the vehicles on the basis of cubic centimeters and duties on the percentage basis on certain vehicles would be revised.

VIAL Chairman Indika Sampath Merenchige said with those introductions, the tax on electric vehicles had also been increased from 5 % to 50 % and therefore duty would increase on electric vehicles such as ‘Leaf’ by around Rs. 2.5 million.

“The import tax on 1000cc vehicles has been increased from 50 % to 70 % and therefore vehicles such as ‘Wagon R’ would increase by around Rs 400,000 and Maruti prices would increase by Rs. 250,000, he said.

“The tax on hybrid vehicles has been increased to 10 per cent and thereafter Aqua vehicle would increase around Rs. 500,000 to 600,000 while Prius would increase by around Rs.700,000”, he said.

Mr. Merenchige said the tax rate on vans had been increased from 85% to 150% and price on vans would increase of by around Rs.2.5 million.

He said the new prices would come into effect on Monday (23).

Meanwhile, 2016 budget has reduced excise duty to 2.5 percent for the vehicles which are run entirely on Solar, Hydrogen or Helium.

A vehicle import fee to obtain a Vehicle Entitlement Certificate for each vehicle was also introduced and therefore Rs. 2,000 per motor cycle and three wheeler, Rs.15,000 for a motor car and Rs.10,000 per vehicle for all other vehicles would have to pay as fee.(DS)

Vehicle imports to drop by about 90 percent after govt regulations

Sri Lanka's vehicle imports will drop by at least 90 percent after the government changes the way it calculates the value of certain motor vehicles, officials said on Friday.

The Indian Ocean island nation is trying to discourage unnecessary imports in a move to prevent dollar outflows and further weakening of the rupee currency.

Pressure on the currency has intensified after the central bank effectively floated it on Sept. 4. It has fallen 4.6 percent since then.

The finance ministry in a special gazette notification on Sept. 22 changed the basis by which customs will calculate the value of vehicles to one that is determined by the price provided by the manufacturer.

Previously, valuations were made based on the higher of two figures: the price determined by the director general of customs based on prices furnished by the manufacturersor the actual transaction value of the vehicle.

"Vehicle imports will drop by about 90 percent, that may be the intention of the people who created this," Kokila Deekiriwewa Co-President of the Vehicle Importers Association of Lanka told Reuters.

"Now, customs arbitrarily decides the valuation of vehicles on top of the rupee depreciation and other government regulations to discourage vehicle imports. So this will increase vehicle prices drastically."

On Oct 2, the finance minister also imposed a 100 percent margin on letters of credit (LC) for motor vehicles.

The cost of importing vehicles in the first seven months almost doubled to $744.4 million, central bank data showed.

The balance of payments during the first seven months of 2015 is estimated to have been in a deficit of $1.21 billion, compared with a surplus of $2.02 billion in the same period last year. (Reporting by Ranga Sirilal; Editing by Kim Coghill)

Source : http://in.mobile.reuters.com/article/idINL3N12923720151009

Off-peak tariffs to charge EV's

Sri Lanka’s state-owned electricity service providers are now offering domestic time of use (TOU) electricity tariff for cheaper charging of electric vehicles. “During the off-peak hours only Rs.13 is charged per unit, which is a fair amount for the electric vehicle charging purposes,” a Public Utilities Commission of Sri Lanka (PUCSL) statement said. The off-peak hours run from 10:30 p.m.-5:30 a.m. Tariffs during daytime hours of 5:30 a.m.-6:30 p.m. will be Rs.25 per unit and Rs.54 per unit will be charged during peak hours between 6:30 p.m.-10:30 p.m. 

The new tariff scheme is an alternative tariff system for domestic users who consume a three-phase, 30 A or above power supply. 

“Those who wish to upgrade their customer category from the existing domestic category to TOU tariff should apply it from the regional area engineer’s office of their service providers (Ceylon Electricity Board (CEB), Lanka Electricity Company Private Ltd (LECO)). Such customers should pay for the new meter which is required to support the TOU tariff,” PUCSL said. The PUCSL said that those opting for the new system would contribute in lowering peak time consumption and increasing off-peak consumption. 

This would help balance the loads in the coal power plants Sri Lanka increasingly depends on. Stopping and restarting coal-fired plants between peak and off-peak times is time consuming and causes energy wastage. -


Source: http://www.dailymirror.lk/88255/off-peak-tariffs-to-charge-electric-cars

There is a case to increase electric car duties to a more logical 50 percent...

Tariffs above 150 percent should be rationalized to a range between 100 to 150 percent as the market has shifted to hybrids. “Even the luxury cars are hybrids. There is a case to increase electric car duties to a more logical 50 percent,”

Source : http://www.lankabusinessonline.com/expert-view-bigger-problems-underlie-sri-lankas-vehicle-import-bill-says-murtaza/

A rash of credit-fueled vehicle imports is affecting Sri Lanka’s balance of payments at the moment.

But the bigger problem is not addressing fundamental monetary and fiscal policy issues, says Murtaza Jafferjee, the chief executive at Colombo-based JB Securities.

“The primary factor fueling the demand for vehicles is credit. When the larger banks started offering leases at interest rates ranging from nine to ten percent, demand skyrocketed,” he said.

Brand new car registrations rose to 4,990 units in August, up 533 percent from the same month last year. Total vehicle registrations were 50,555 in August, although off an all-time high of 62,221 in July.

Sri Lanka’s central bank spent 800 million dollars during July and August propping up the rupee, before allowing a four percent depreciation last week. Analysts now have to extricate the reasons that led to this unhealthy situation.

“When you take the historical experience of car prices holding their value over time in nominal terms I believe most people view their car as a real asset as they view gold jewellery,” he said.

“It will hold its value and also offers the added advantage of usage occasionally.”

It seems buyers and vehicle dealers play a timing game expecting the treasury to increase taxes. Dealers profit from inventory holding gains and consumers “front load their purchases” in the belief that it will be more expensive if they wait.

Financial institutions who want collateral-based lending options are happy to lend in such a situation.

Three measures are typically taken to discourage vehicle imports, Jafferjee said. High excise duties on vehicles, lowering the loan to value ratio (LTV) and imposing a stamp duty on vehicle financing transactions.

The Indian Ocean island has high excise duties on vehicles, although it has reduced from levels in the past. For hybrids, excise duty is 70 percent for vehicles under 1,000 cc, 80 percent for vehicles under 2,000 cc, and 115 percent for vehicles under 3,000 cc engine capacity.

Small petrol cars have 135 percent duties, and medium-sized petrol cars have 150 percent duties.

“This government has clearly stated in their manifesto that they want an asset owning middle class so there is no logic in depriving a person who saves and buys a vehicle,” he said.

“Issues such as congestion in cities should be addressed through congestion charges rather than duties for it penalises a person in the country side.”

Tariffs above 150 percent should be rationalised to a range between 100 to 150 percent as the market has shifted to hybrids. “Even the luxury cars are hybrids. There is a case to increase electric car duties to a more logical 50 percent,” he said.

A lower loan to value ratio, from the 85-90 percent that firms were giving out loans, could reduce demand, although small car buyers don’t appear to use their full borrowing quota. The central bank on Monday announced reduction of the loan to value ratio to 70 percent.

“Fair enforcement will be a challenge, for vehicles unlike gold are not homogenous. The value is subjective so how is the regulator going to assess whether firms are playing by the rules. Firms can game the rule by declaring a higher value for the underlying collateral,” he said.

Higher stamp duties can also drive up the cost of financing.

Although different countries and communities in the world have different values around importation and use of vehicles, and Sri Lankans are at the high end of the importation spectrum, Jafferjee considers the fundamental problem to be elsewhere.

“Contrary to popular belief, balance of payment crises that this country faces from time to time are not due to vehicle imports but due to a combination of monetary policy and fiscal policy,” he said.

By not allowing a free floating exchange rate and not revising interest rates, Sri Lanka’s central bank promoted an artificial policy of loose credit which, among other repercussions, triggered vehicle imports.

On the irresponsible use of fiscal policies, higher public servant salaries despite huge inefficiencies in the public sector, not collecting enough taxes and under recovery of petroleum taxes drives regular budget deficits that drain savings from productive investments.

“The solution to the BOP crisis is to address fundamental issues rather than meddle with vehicle taxes,” Jafferjee said.

New tariff to facilitate Electric Vehicles in Sri Lanka

In order to encourage the use of Electric Vehicles, on the 8th of July 2015, CEB had submitted a new tariff proposal for domestic consumers for the approval of the Public Utilities Commission of Sri Lanka. The CEB proposal, which is an optional tariff available to any domestic consumer currently having a three phase 30A or above supply, was approved by the PUCSL on 10th September 2015.

The new tariff is a “Time of Use” tariff where individual consumptions during three time blocks, namely “Off Peak” (2230 to 0530 of the following day), “Day”(0530 to 1830) and “Peak” (1830 to 2230) are separately metered and charged. Unlike the prevailing block tariff structure for domestic consumers, under this new Time of Use tariff, there is only a single tariff within each time block. In order to facilitate Electric Vehicle Charging, a low off peak tariff of Rs 13 per unit (kWh) has been offered for seven hours starting from 10.30pm. A higher tariff of Rs 54 has been charged for the four peak hours from 6.30pm and a tariff of Rs 25 a unit has been charged for the remaining thirteen hours of the day. The option has been offered initially only to those consumers having a three phase supply and the additional cost of the new Time of Use meter has to be borne by the consumer.

CEB also wishes to invite the attention of all consumers to ensure that the socket outlet that they use to draw power to Electrical Vehicle Charger complies with the latest IEE Wiring Regulations and the conductor size and the MCB in the final circuit is capable of continuously delivering the sizable currents likely to be drawn during vehicle charging. If in doubt, consumers are advised to get their installations tested by a Chartered Engineer to verify compliance. It is to be noted that incorrect practices are rampant where conductors having continuous ratings below 15A are being used in conjunction with a larger size MCB (16A) to wire 15A outlets. Consumers are cautioned that whenever the conductor rating, after de-rated to local conditions, is below the MCB rating, the conductor is not protected by the over current device (MCB) and may even lead to fire.

The official tariff announcement can be downloaded by clicking the link on the web page.

Source : http://www.ceb.lk/sub/news/news01.aspx?acquiesce=87