Electric Vehicle Rebates in Singapore

Exciting news for prospective electric vehicle (EV) buyers! In 2025, the financial incentives for purchasing electric cars will remain robust, with buyers able to access rebates of up to $40,000. This initiative is part of the Singapore government's ongoing strategy to enhance the adoption of electric vehicles, as announced by the Land Transport Authority (LTA) and the National Environment Agency (NEA) on September 20.

Details of the Rebate Program

The LTA will extend the current 45% rebate off the Additional Registration Fee (ARF) for electric cars and taxis until December 31, 2025. This rebate caps at $15,000 under the Electric Vehicle Early Adoption Incentive (EEAI) scheme, designed to make EV ownership more appealing to a broader market. Additionally, the ARF for electric vehicles and taxis will remain at a zero-dollar floor, ensuring that mass-market electric vehicle buyers can continue to maximize their savings.

Understanding the Additional Registration Fee

For those unfamiliar, the ARF is a tax applied upon vehicle registration that is contingent on the vehicle's open market value. This means that the more valuable the vehicle, the higher the ARF.

Maximum Rebates Under the VES

Moreover, the NEA will sustain the maximum rebate amounts of $25,000 for electric cars and $37,500 for taxis classified under the agency's Vehicular Emissions Scheme (VES). These amounts apply to vehicles with zero tailpipe emissions that qualify under Band A1 of the scheme, which encompasses the majority of all available electric car models.

Rebate Reductions for Band A2 Vehicles

However, not all vehicles will reap the same benefits. Cars that fall under Band A2—including high-powered electric vehicles, many hybrids, and smaller, more efficient internal combustion engine vehicles—will see a reduced rebate in 2025, dropping from $5,000 to $2,500. Taxis in this category will also experience a similar reduction, with their rebates falling to $3,750 from $7,500.

Overall Rebate Levels Maintained

Despite these changes, the LTA and NEA report that most electric car models will see rebate levels maintained from the previous year. For example, the BYD Atto 3, with an open market value of $34,000, will continue to have a zero ARF after rebates. Conversely, buyers of more expensive, battery-powered vehicles like the Mercedes-Benz EQE300 sport utility vehicle, which falls under Band A2, will face paying more. For instance, at an open market value of $77,689, the ARF will rise to $112,723 in 2025—up $2,500 from 2024.

Impact on Electric Vehicle Sales

The government claims that these two rebate schemes are effective in bridging the cost gap between traditional internal combustion engine vehicles and greener alternatives, significantly boosting electric and hybrid vehicle sales. Notably, the percentage of new car registrations that consist of cleaner-energy vehicles reached a remarkable 80% from January to August of this year, with about a third being fully electric.

Increased Adoption of Electric Vehicles

Since the introduction of these initiatives, approximately 20,000 electric cars and taxis have benefited from either the EEAI or VES rebates, marking a substantial increase from over 8,000 just between 2021 and September 2023.

Extension of Electric Vehicle Rebates

Originally set to expire in December 2023, the EEAI has been extended for two additional years until the end of 2025. This decision is part of Singapore's broader commitment to transition to cleaner energy, ultimately aiming for all vehicles on the road to be cleaner-energy models by 2040.

Future of Diesel Cars in Singapore

From January 1, 2025, no new diesel cars or taxis will be allowed to register in Singapore. By 2030, it will become mandatory for all new car registrations to comprise cleaner-energy models.

Industry Reaction to Rebates

Ms. Sabrina Sng, managing director at Wearnes Automotive, a distributor for the Swedish EV brand Polestar, commented on the news, stating that keeping the same rebate levels for electric vehicles will maintain competitive pricing, a crucial factor for potential buyers. She interprets the reduction in Band A2 rebates as a strategic move to steer consumers toward fully electric vehicles rather than hybrids.

Current Landscape of Electric Vehicles in Singapore

As of August 31, there are currently 20,497 electric cars navigating Singapore’s roads, accounting for about 3.13% of the total 654,325 registered vehicles. With these continued incentives, the future landscape of car ownership in Singapore is set to become significantly greener!