LTA reviewing COE categories for cars
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The Land Transport Authority will gather views from the public and motor industry for its review of the COE system, said Acting Minister for Transport Jeffrey Siow.
ST PHOTO: LIM YAOHUI
- LTA is reviewing the COE system to improve car categorisation, aiming to reach a conclusion by the end of the year.
- Category A COE prices recently exceeded Category B, challenging its mass market purpose.
- Motorists are advised to bid prudently, as no immediate changes are taking effect.
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SINGAPORE – The Land Transport Authority (LTA) is reviewing the certificate of entitlement (COE) system to improve the categorisation of cars.
Acting Minister for Transport Jeffrey Siow announced this on March 4 during the debate on his ministry’s budget, in response to MPs who called for a relook of the system.
Mr Edward Chia (Holland-Bukit Timah GRC) and Mr Ang Wei Neng (West Coast-Jurong West GRC) flagged how at the second tender exercise in February,
Mr Siow said LTA will gather views from motorists, dealers, car manufacturers and academics.
Work will begin immediately, and the aim is to complete the review by the end of the year, he said in response to Ms Tin Pei Ling (Marine Parade-Braddell Heights GRC).
Mr Siow noted that premiums for both categories are likely to “converge for some time”, given that the COE supply for Category A peaked in 2025 while that for Category B will continue to increase in 2026.
On Feb 20, the Category A premium ended at $106,501 – $1,500 higher than that of Category B, which closed at $105,001.
At the latest tender that closed on March 4
Mr Ang said the convergence could have been driven by market developments, citing how it has become increasingly easier for EVs to be tuned to meet the Category A criteria, and how there are more high-end internal combustion engine vehicles that feature lower engine capacities, which also qualifies them for that category.
Having largely similar prices between the two would run contrary to the original intent of maintaining distinct categories in the passenger car segment, he said, stressing that the purpose of a Category A COE is to reserve a portion of Singapore’s vehicle quota for mass-market cars, ensuring greater accessibility and affordability.
Mr Chia made a similar point, noting that manufacturers were tailoring their vehicles’ specifications to fit within Category A requirements.
Category A is for cars up to 1,600cc and 130bhp, and EVs with a maximum power output of 110kW.
Mr Chia proposed discounts for vehicles with lower open market values and surcharges for more expensive cars to improve accessibility for lower- and middle-income families.
Open market value is the cost of a car when it arrives in Singapore, without factoring in COE and taxes or charges.
He also suggested doing away with Category A and B COEs and combining them into one single pool.
Responding, Mr Siow said LTA will look at the suggestions. He added that there is “probably still some merit to having some distinction” between a mass-market car category and a higher-end one.
The review will have to determine a form of categorisation that is a “little bit more stable in the longer term”, he said.
Adding that his ministry tries its hardest to address concerns, Mr Siow told the House: “I know this matters to you. It also matters to us.”
In a social media post, LTA said “it is timely to review how the system can better reflect current trends”. The authority added that there are no immediate changes to the COE system, and motorists should continue to be prudent in bidding for COEs.
Mr Liang Eng Hwa (Bukit Panjang) raised the issue of worsening traffic congestion during the debate and made several suggestions, including smarter traffic light management through the use of AI, and improving the flow of logistics vehicles, for instance by having off-peak delivery windows in dense commercial districts.
He also noted that an average of 69,000 Malaysian-registered motorcycles entered Singapore daily in 2025, causing congestion along expressways like the BKE and PIE during peak periods.
In response, Mr Siow said the Government expects the volume of foreign motorcyclists to decrease with the higher Vehicle Entry Permit fee of $7 a day, up from $4, and the opening of the cross-border Rapid Transit System Link from 2027.
He added that LTA is exploring the use of AI to manage traffic. The authority is developing a new system that will apply AI predictive capabilities to improve traffic management.
On logistics, he said his ministry and the Ministry of Trade and Industry “have been coming together to try to develop a logistics strategy that is more coherent”. An update will be given when ready, he added.
