OCBC Bank and NUS collaborate on a nationwide electric vehicle adoption study
OCBC Bank and the National University of Singapore (NUS) announced the start of the nation’s largest dedicated study to understand the most effective nudges to adopt electric vehicles (EV) by Singaporeans. A total of 32,000 OCBC Bank customers will contribute to the study, which is expected to span three months. They will be selected on the basis of having a high likelihood of replacing their cars in the coming years.
Through the study, OCBC Bank and NUS aim to uncover nudges that best push consumers to make the switch to EVs, such as concerns over cost of EV ownership in the long-run or climate-damaging carbon emission levels of petrol and diesel vehicles. The persuasiveness of the different factors will be gauged by studying anonymised data from the 32,000 customers, including transit spending, fuel purchases on OCBC cards and EV transition rate.
Leading the NUS research team is Associate Professor Alberto Salvo from the Department of Economics at the NUS Faculty of Arts and Social Sciences. Prof Salvo is also Associate Director at the NUS Global Asia Institute (GAI). The team also comprises GAI environmental and behavioural economists, along with an expert on the US and Chinese EV markets from Cornell University.
The findings from the study will help businesses and organisations accelerate consumers’ adoption of EVs and other green practices, and also to support Singapore’s current push to electrify its vehicle population by phasing out petrol and diesel vehicles by 2040. Currently, EVs represent less than one per cent of Singapore's total car population according to Singapore’s Land Transport Authority.
OCBC Bank has seen the take-up rate of its enhanced electric vehicle loan or the OCBC ‘Eco-Care’ car loan more than double since its launch in March 2021. With the surge of demand and interest in EVs, the bank expects the overall OCBC ‘Eco-Care’ car loan business to achieve growth of more than 250% by the end of the year. The study of the findings will allow OCBC bank to further refine and tailor its green products to make them more attractive to customers.
Mr Sunny Quek, Head of Consumer Financial Services Singapore, OCBC Bank, said, “Supporting our customers in the transition to a low-carbon world is an area of focus for OCBC and this has been formalised in our corporate strategy. To that end, we have made a concerted effort to launch sustainable products and services, including green investment products and our OCBC ‘Eco-Care’ home, renovation and car loans – and the take-up rates have been encouraging thus far. However, given the urgency of the climate crisis, more needs to be done to speed up adoption rates. That is why we embarked on this study with NUS. Only by understanding what makes consumers tick, and which factors really tip the scale for them in favour of electric vehicles, can we effectively encourage our customers to go green.”
Associate Professor Salvo said, “The EV market is very fluid, information frictions are substantial and there is little carbon literacy. We believe that relationships built on trust, such as a person’s relationship with their bank, as in the case of OCBC’s customers, have a key role to play in educating current petrol car owners on just how attractive EVs can be, both for themselves and for the betterment of society. Our partnership is ultimately about helping Singapore meet its carbon mitigation pledges.”
After the study is concluded and the results analysed, a research paper will be released. This is expected to be in Q2 2023. This study is the latest initiative from OCBC Bank to build up Singapore’s EV ecosystem. Previously, the bank announced a strategic partnership with Charge+, an operator and provider of EV charging solutions, to give a boost to Charge+’s plans of installing 10,000 EV charging points islandwide by 2030. The bank also has the largest EV charging hub in Singapore’s Central Business District with 10 charging points, again in collaboration with Charge+. For more on OCBC Bank’s sustainability-related initiatives, please refer to the appendix.
Appendix - More About OCBC Bank’s Sustainability Efforts
The OCBC ‘Eco-Care’ car loan is one of the many steps in OCBC Bank’s climate action approach, which is focused on taking strategic action to reduce or store CO2. Making up some 80 per cent of the greenhouse gases, CO2 is causing extreme natural disasters and temperature shifts around the globe.
Last year, the bank launched the solar panel loan to make the financing of solar panel installation more accessible to home-owners in landed properties. As part of the nation’s Long-Term Low Emissions Development Strategy, quadrupling solar energy production by 2025 is one of the key pillars and OCBC Bank’s consumer loan for residential solar panels is aimed at facilitating the country to reach its target.
The bank has already begun its journey of transitioning to a sustainable world. In 2019, OCBC Bank became the first Southeast Asian bank to stop financing new coal-fired plants.
It also supported the planting of trees to store CO2. The OCBC Arboretum, a landmark project at the Singapore Botanic Gardens, conserves and studies 200 species of 2,000 dipterocarp trees that can store as much as 80 million kg of CO2 over their lifetimes.
On the business front, OCBC Bank has stepped up to do even more, having pledged to grow its sustainable finance portfolio to S$50 billion by 2025 – after achieving its previous goals of S$25 billion by 2025 and S$10 billion by 2022, ahead of time. The Bank has funded projects in the region that harness the wind and capture the sun’s rays to generate clean energy. These projects range from wind and solar farms to electric cars, hybrid buses and solar panel installations.
In December 2020, OCBC Bank adopted the Equator Principles, an internationally-recognised risk management framework adopted by financial institutions worldwide which will guide how the Bank determines, assesses and manages environmental and social risks in projects. OCBC Bank’s voluntary adoption of the Equator Principles is an extension of its Responsible Financing framework which the Bank has put in place since 2017.