Singapore extends EV incentives, cuts hybrid car subsidies

From January to August this year, 80% of newly registered vehicles in Singapore were clean-energy models. (Photo: iStock)

As electric vehicles (EVs) gain traction, Singapore has revised its incentive schemes to further accelerate adoption. The Electric Vehicle Early Adoption Incentive (EEAI) and the Vehicular Emissions Scheme (VES) will be extended, but rebates for hybrid cars will be removed. At the same time, surcharges on traditional fuel-powered vehicles will rise, narrowing the cost gap with EVs. 

Hybrid subsidies removed, surcharges raised for polluting cars

The EEAI, originally set to expire at the end of 2025, will be extended until December 2026. However, the maximum Additional Registration Fee (ARF) rebate for EVs will be halved from SGD$15,000 (about USD$11,700) to SGD$7,500 (about US$5,850).

The VES will run until the end of 2027, with hybrids no longer eligible for rebates. Meanwhile, surcharges on higher-emission vehicles will increase over the next two years. For the most polluting category, ARF surcharges will rise to S$35,000 (about US$27,300) by 2026, up from S$25,000 today.

Since the EEAI and VES are stackable, car buyers can apply for both. But with the revised terms, the maximum combined rebate for EVs will fall from S$40,000 to S$30,000 (about US$31,200 to US$23,400).

Singapore plans to phase out all fuel-powered vehicles by 2040. (Photo: Unsplash)

EV uptake surges as Singapore targets 2040 combustion car phase-out

In a joint statement, the Land Transport Authority (LTA) and the National Environment Agency (NEA) said Certificate of Entitlement (COE) prices are likely to rise in the short term. Under Singapore’s quota system, car owners must bid for a COE, with prices fluctuating according to supply and demand.

Walter Theseira, associate professor of economics at the Singapore University of Social Sciences, said Chinese EVs have proven competitive in the market, making it unsurprising that the government is trimming subsidies.

Transport accounts for 15% of Singapore’s emissions. The government has pledged to reach net zero by 2050 and announced in 2020 that all newly registered cars and taxis must run on cleaner energy, with a full switch targeted by 2040. 

From January to August this year, 80% of new car and taxi registrations were cleaner-energy models, with EVs making up half of that share.

Source:LTA, Straits Times(1), (2)