Budget 2021 Emerging stronger

Cost of owning electric vehicles to be lowered to boost early adoption

More measures will be rolled out to narrow the cost of owning an electric vehicle (EV) compared with petrol and diesel vehicles to encourage drivers to make the switch.

Deputy Prime Minister Heng Swee Keat said yesterday that the minimum Additional Registration Fee (ARF) for electric cars will be lowered to zero from January next year to December 2023.

Currently, all car buyers have to pay at least $5,000 in ARF, regardless of the tax rebate a car is entitled to. Based on current prices, the change would see tax rebates fully cover the ARF of the Renault Zoe and MG ZS electric cars.

Mr Heng said lowering the ARF floor will enable mass-market electric car buyers to maximise tax rebates from the Electric Vehicle Early Adoption Incentive.

Road taxes for electric cars will also be revised such that a mass-market electric car will have a road tax comparable with that of an internal combustion engine equivalent, Mr Heng added.

More details will be announced when MPs debate the budgets of various ministries from next week.

These moves are the latest in a series of measures by the Government to speed up the phasing out of vehicles running purely on fuels here.

As part of the inter-ministerial Singapore Green Plan 2030 announced last Wednesday, the Government said it would revise Singapore's multi-layered vehicle tax structure to "make it easier to buy and own" EVs.

EV incentives were enhanced just last month, when bigger rebates under the Vehicular Emissions Scheme as well as the Electric Vehicle Early Adoption Incentive kicked in. Together, they give an electric car buyer as much as $45,000 in tax breaks.

The road tax formula was also revised to make it less onerous for electric car owners.

In terms of infrastructure, the Government will more than double the targeted number of public EV charging points, from 28,000 to 60,000 by 2030.

Mr Heng said yesterday that $30 million will be set aside over the next five years for initiatives related to EVs, such as measures to increase the number of charging points at private properties.

The various measures will help reshape Singapore's transport footprint towards cleaner transport, he added.

Mr Raymond Tang, managing director of Yong Lee Seng Motor, welcomed the measures. But he hopes more can be done to promote the financial and environmental benefits of EVs.

"Customers do not know how it is better than conventional vehicles and they are also worried about whether they can find enough charging points," he said.

"It is hard for dealers to bring in EVs if there is no demand."

A version of this article appeared in the print edition of The Straits Times on February 17, 2021, with the headline 'Cost of owning electric vehicles to be lowered to boost early adoption'. Subscribe