The EV early adoption program has been prolonged until 2025.
Singapore citizens are eligible for a rebate up to $15,000 !

SINGAPORE - An initiative encouraging the early adoption of electric vehicles (EVs) has been extended till 2025, but with a lower maximum rebate in 2024.

At the same time, the rebate for some cars with cleaner emissions under a separate scheme will be lowered in 2024.

Under the EV Early Adoption Incentive scheme – which will be extended by two years till Dec 31, 2025 – owners who register new fully electric cars and taxis will continue receiving rebates of up to 45 per cent off additional registration fees, the main tax imposed upon registering a vehicle.

But the maximum rebate will be capped at $15,000, instead of the current $20,000, from January to December 2024.

The Land Transport Authority (LTA) said in a statement on Thursday that the move would encourage the switch to EVs, while ensuring that the scheme stays progressive.

Announced in 2020, the EV Early Adoption Incentive scheme kicked off in January 2021 and was due to end in December 2023.

Meanwhile, the maximum rebate of $25,000 under the National Environment Agency’s (NEA) Vehicular Emissions Scheme (VES), which covers cars with zero exhaust pipe emissions such as EVs in Band A1, will stay unchanged from January to December 2024.

But vehicles under Band A2 – including high-powered EVs, most hybrids and smaller, more efficient internal combustion engine cars – will get $5,000 in rebates in 2024, instead of the current $15,000.

Taxis under Band A2 will have their VES rebate cut to $7,500 from $22,500, while the top-tier rebate of $37,500 – applicable to EV taxis – remains unchanged.

In the same media statement, NEA said the revised VES rebates would encourage the adoption of cleaner energy cars, with an emphasis on electric and other zero exhaust pipe emissions cars.

LTA and NEA said that with the revised rebates effective from Jan 1 to Dec 31, 2024, buyers will see combined cost savings of up to $40,000 on additional registration fees. This is down from the present maximum savings of $45,000.

For a BMW i4 M50 – an EV in Band A2 – the combination of the two rebate changes would translate to an extra $15,000 in vehicular taxes. By contrast, a buyer of a cheaper and less powerful EV model such as the BYD Atto 3, which is in Band A1, would not have to pay additional registration fees after the rebates.

LTA and NEA said most mass-market electric car models would get the same level of rebates as they do today.

The agencies added that as the industry develops further, they would review the rebates for both schemes that will apply from Jan 1, 2025, and make these public in 2024.

Mr Neo Nam Heng, chairman of diversified motor group Prime, told The Straits Times that taxi operators like his are concerned that new hybrid vehicles would cost more at a time when fuel prices are also rising.

Dr Amy Khor, Senior Minister of State for Transport, said in a Facebook post that the schemes would narrow the cost difference between cleaner energy cars – including EVs and hybrids – and those with internal combustion engines.

Of the 2,541 new cars registered in August, 68.7 per cent – or 1,745 units – were EVs and hybrids.

LTA said that since 2021, the purchase of more than 8,000 EVs and taxis has drawn rebates from VES or the EV Early Adoption Incentive scheme, or both.

Associate Professor Alberto Salvo of the department of economics at the National University of Singapore said that apart from incentives to encourage petrol car owners to switch to EVs, the expansion of the charging network was also a major draw for consumers.

On the Government scaling back incentives for high-powered EVs and hybrids, he said: “While preferable to powerful petrol cars, they still are polluting, and they take up precious road space.”

Mr Kidd Yam, BMW Group Asia’s director of corporate affairs, said Thursday’s announcement would help the company better plan the introduction of new models.

Ms Sabrina Sng, managing director in charge of EV brand Polestar and sports car maker Lotus at multi-franchise motor group Wearnes Automotive, feels it is reasonable to expect the EV Early Adoption Incentive scheme to continue in some form, given that EV adoption is still low.

Many hybrid models are set to be affected by the move, which will lower the VES rebate by $10,000.

This would likely make them less attractive to consumers in 2024, especially as non-hybrid and thus more pollutive models are typically cheaper.

Komoco Motors, which represents Hyundai, said the reduced rebate, coupled with high certificate of entitlement (COE) premiums, would drive buyers away from opting for cleaner options such as hybrid cars and some EV models, which will become more expensive.

Some industry observers have said the uncertainty around rebates in the lead-up to Thursday’s announcement had been a key factor behind rising COE prices.

In recent weeks, dealers have been urging buyers to commit to their purchases before the present rebates from the VES and EV Early Adoption Incentive scheme were due to expire.

The observers expect dealers to continue using this pitch as the rebates will drop in 2024.

This trend, said Ms Sng, will continue until the end of 2023. “It is the COE price movements that are the most visible and powerful driver of sentiment in the market,” she added.

From January, Singapore will adopt the Worldwide Harmonised Light Vehicles Test Procedure (WLTP) as the sole testing standard for new private cars and taxis sold here. WLTP is a stricter test that provides more realistic emissions results through a better representation of real-world driving performance.

Light commercial vehicles adopted the WLTP on April 1, coinciding with smaller tax rebates under the Commercial Vehicle Emissions Scheme that kicked in on the same day.

In the three months leading to the switchover, commercial vehicle COE premiums reached record highs as traders rushed to register vehicles. This was to secure higher rebates and avoid reapplying for approval under WLTP.

Electric vehicles are revolutionizing the way we drive, offering clean, efficient, and reliable transportation.
Check out the catalog of electric machines on our website!