Incentives of owning an Electric Vehicle in Singapore
With the government actively rolling out several schemes to encourage the drivers to make the switch to electric cars, there has been much talk about Electric Vehicles (EVs) in the Little Red Dot. In particular, the 2021 news about setting aside S$30 million over the next five years for EV-related initiatives, has garnered a wide interest in green driving and sustainability.
Additionally, plans to implement 60,000 charging points at public car parks and private properties by 2030 have been announced, and if the words ‘Tesla’ and ‘electromobility’ sound foreign to you, it’s time to stay woke and in-trend with the latest buzz about electric cars.
If you are looking to jump ship and explore getting an electric vehicle, here are the current tax incentives and schemes that are extremely helpful to know for EV drivers and owners-to-be.
Early adoption incentive
Let’s start with the EV Early Adoption Incentive (EEA) – effective from 1 January 2021 to 31 December 2023, this initiative aims to tackle the exorbitant initial costs of EVs, by offering a 45% rebate on the Additional Registration Fee (ARF), capped at $20,000 per vehicle. With this, it is predicted to lower the upfront pricing of an electric car by about 11%. I know, it is a mouthful, so take your time to absorb the details. Note: This incentive also applies to taxis and car rental companies.
Enhanced Vehicular Emissions Scheme
The Enhanced Vehicular Emissions Scheme (VES) now has increased rebates and higher surcharges, with effect from 1 January 2021 to 31 December 2022. It is based on a vehicle’s carbon dioxide (CO2 ) emission, and emissions of four pollutants – hydrocarbons (HC), carbon monoxide (CO), nitrogen oxides (NOx), and particulate matter (PM).
The pollutant with the highest emission value will dictate your vehicle’s band and its corresponding rebate or surcharge. This is regardless of the car’s emissions of the other four pollutants. And if you were to register an electric or plug-in hybrid vehicle or taxi, an emission factor of 0.4g CO2/Wh will be applied to its electrical energy consumption to rate its CO2 emission.
Road tax reduction
For the past few years, the road tax for EVs has always been on the pricier side, as compared to internal combustion engine (ICE) vehicles. Typically, EV owners are expected to pay anywhere from a few tens of dollars to a few hundred dollars more a year.
The revised structure, with the adjusted five power rating categories, will see a reduction in road tax for electric vehicles. To determine the power rating: The power output of the car’s electric motor (as specified by the manufacturer), calculated in kW.
With this updated framework, electric cars in the market will still run up an annual usage cost, though it’s still a small percentage lower than ICE cars. Good news for petrol-electric hybrid car owners: The road tax reduction is approximated at a 29% decrease, and as these hybrid cars are still mostly petrol-fuelled vehicles, they will not require the additional $700/year flat component cost as part of the car charges for now.
‘The early bird catches the worm’
There is a reason as to why this idiom is so relevant, even till this day and age – because, existing EV owners, rejoice! If you have registered your car prior to 1 January 2021, you can expect special transitional arrangements and an across-the-board reduction in road tax too.
What’s more, you too, do not have to pay the additional flat component fee for the three-year period from 1 January 2021 to 31 December 2023. The full $700/year payment will only be applicable from 1 January 2024.
As we progress to a cleaner and greener Singapore, what we are most looking forward to is the future of the charging ecosystem. Currently, there are an estimated 1,800 charging points around the city, and by 2030, we can anticipate EV-designated lots in open-air, multi-storey, and underground car parks. Perhaps, it’s time to switch to green?