Tax credits, subsidies can help EV adoption in Oman

Muscat, Jan 12 - Financial incentives in the form of tax exemptions, registration fee waivers and other subsidies could help fuel the uptake and promotion of Electric Vehicles (EV) in the Sultanate, according to the findings of a key study commissioned recently by the Authority for Electricity Regulation Oman (AER).
The report on international best practices for electrical vehicles adoption in the Sultanate was published by the Authority last month. Compiled by US-based Energy and Environmental Economics, Inc (E3) with its subcontractor Baringa Partners, the report highlights key developments in the market for electric vehicles that have an impact on the future design of the electricity sector regulatory frameworks.
Significantly, the report identifies an array of fiscal and non-fiscal incentives that Oman’s authorities could consider for implementation in order to stimulate the growth of an Electric Vehicles market in the Sultanate.
“Oman could lower the upfront cost of PEVs by providing upfront subsidies, tax credits, tax exemptions or registration fee exemptions on vehicles and/or charging equipment,” the report noted.
“Upfront cost of EVs,” it explained, “is currently an adoption barrier in all jurisdictions studied. Even when total cost of ownership for PEVs is lower than for ICE vehicles, many consumers do not factor the lower fuelling savings into their assessment and instead focus on the upfront vehicle cost differential. Depending on when Oman begins promotion of EVs, the level of incentive needed may be small or zero,” it stated.
Likewise, the AER-commissioned study also proposes financial incentives for automotive distributors to help drive EV sales in the Sultanate. “Dealerships are currently disincentivised to sell EVs because they require less maintenance than ICE vehicles and therefore provide less return business. Providing financial incentives is intended to create additional incentive for individual dealers to sell EVs,” it points out.
Electric Vehicle uptake and penetration can also been sustained via the introduction of a number of “non-pecuniary” benefits, according to the report. It recommends, for example, free public and airport parking for EVs, high-occupancy lane access, waivers on toll roads, and priority parking spaces with charging stations for EVs at government buildings.
“Retail locations may be enticed to provide priority parking and charging in order to draw PEV drivers into their store or restaurant,” the report noted.
Importantly, the report moots concrete adoption goals for Electric Vehicles. “Oman could set a goal for the number of EVs or zero-emission vehicles (ZEVs: fuel cell vehicles plus EVs) sold or on the road by a given year; Oman could set EV fleet conversion targets or mandates for government fleets,” it stated.
“These kinds of goals signal policy commitment by the government,” the report stressed. “They can be used as an anchor for further policy change and implementation and can send an investment signal to the private sector that EV adoption will be encouraged in Oman and is expected to increase.”
“Government fleets can be valuable first movers for fleet conversion as they are often public-facing, drive a significant number of miles (improving their economic case) and can share lessons learned with other government agencies and private fleets,” it further noted.
Additionally, the insightful study envisions a major role for electricity distribution companies, as well as specialised EV service providers (EVSP), in rolling out public charging infrastructure particularly along key traffic corridors. It also recommends the allocation of licenses on a priority basis to private investors eager to set up dedicated charging stations along key carriageways. Filling stations are encouraged to add EV charging stations to their facilities as well.