Myanmar currently has about 100,000 to 200,000 vehicles produced before 2006, which requires at least US $4 billion based on a minimum of US $20,000 per electric vehicle.

According to a notice issued by Myanmar's Ministry of Commerce in May, Myanmar is promoting a "replacement of electric vehicles (EV) for old vehicles" program: vehiclesover 20 years old, vehicles that cannot be safely maintained, and vehicles less than 20 years old but whose owners voluntarily apply for replacement canapply for imported electric vehicles for replacement according to relevant procedures after scrapping and cancellation.

On May 28, the Ministry of Commerce issued a notice on the cancellation of old used vehicles and the import of electric vehicles. The official reason is straightforward: a large number of old cars consume high fuel and have low maintenance value, which not only increasesfuel expenditure, but also posestraffic safety risksdue to the deterioration of vehicle technical conditions, while high emissions are also exacerbatingenvironmental pollution. Byscrapping old cars and introducing electric ones, the government hopes to promote both vehicle renewal and energy transformation.

According to the currently announced process, eligible car owners must first go through scrapping procedures with the road transportation management department and obtainthe "Scrapped Vehicle Approval Form (Form D)". After obtaining this document, you can apply to import electric vehicles by replacing old cars.

The import process is not completely liberalized. Import applications for electric vehicles still need to be reviewed and approved by the "National Steering Committee for the Development of Electric Vehicles and Related Industries", and the foreign exchange required for imports will be coordinated by the Central Bank of Myanmar in accordance with relevant mechanisms and sold at a "reasonable exchange rate". In other words, although this policy opens a new channel for individuals to import electric vehicles, approval and foreign exchange are still two key thresholds.

Local car dealers revealed that the policy coverage is not limited to vehicles over 20 years old. If the vehicle has been determined to be unable to travel safely on the road, even if the vehicle has not reached 20 years old, it will have the opportunity to enter the replacement system; at the same time, if the owner of a vehicle that is less than 20 years old actively applies for scrapping and replaces it with an imported electric vehicle in his own name, he can also apply in accordance with relevant mechanisms.

However, the Ministry of Commerce of Myanmar also emphasized that Myanmar's previous basic policies on scrapping and cancellation of old vehicles have not changed. This means that the new measures are more about addingthe import channel for "EV replacement"to the existing scrapping system, rather than comprehensively rewriting the management rules for old used cars.

The potential scale of the plan is not small. According to local estimates, there are currently about100,000 to 200,000 cars produced before 2006 in Myanmar. If all these vehicles are converted to electric vehicles through trade-in, evenat least US$4 billion will be neededat least US$20,000per electric vehicle. Some industry insiders therefore question the practical difficulties in large-scale implementation in Myanmar's current foreign exchange environment.

This also determines that the policy is more likely to "gradually increase the volume" in the short term, rather than hundreds of thousands of electric vehicles entering the market at the same time. After all, for Myanmar, the supply of vehicles is not the only problem.Foreign exchange acquisition, import approval, charging network and consumer purchasing power all determine the actual scale of the policy.

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Myanmar's policy direction of "old cars for trams" has become relatively clear: reducing the number of elderly fuel vehicles and using electric vehicles to complete fleet renewal may indeed open up new markets for neighboring countries, but the biggest variable at the moment is not the source of vehicles, but foreign exchange. Even if only a part of 100,000 to 200,000 potential old cars will be replaced, there is still a considerable demand for electric vehicles. However, the financial pressure of US$4 billion determines that it is difficult for the market to increase volume in one go. In the near future, it is more appropriate to focus on the actual approved import scale, the central bank's foreign exchange arrangements and specific vehicle access, and then decide on the pace of stocking to avoid prematurely treating policy space as real orders.

Source: Guangdong Good Car

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