In March this year, Singapore’s Land Transport Authority (LTA) announced that it would revise the Vehicle Quota System (VQS) that classifies vehicles into five COE (Certificate of Entitlement). Under the adjusted system, which is effective from the first COE bidding exercise in May this year, electric vehicles (EVs) with an output of up to 110 kW (147 hp) will now qualify for a Category A COE.
This is an increase from the previous maximum power output threshold of 97 kW (130 hp), whereby EVs that exceeded this limit were classified under the more expensive Category B COE. From May onwards, only EVs with a power output of more than 110 kW will come under Category B.
Examples of EVs sold in Singapore that have moved from Category B to Category A because of this adjustment include the Kia Niro Electric Short Range (100 kW), MG ZS EV (105 kW), Nissan Leaf (110 kW), Hyundai Kona Electric Short Range (100 kW) and Hyundai Ioniq EV (100 kW). According to The Business Times, the number of EVs that fall within Category A has increased from 10 to 20.
Meanwhile, EVs that remain in Category B due to their power outputs being beyond 110 kW include the Tesla Model 3, Polestar 2, MG5 Electric, Mercedes-Benz EQA and EQC, Volvo XC40 Recharge Pure Electric, Porsche Taycan as well as the BMW iX, iX3 and i4, among others.
It should be noted that this change will only effect EVs, as non-electric cars with an internal combustion engine will still follow the previous requirements for Category A COE. This includes an engine capacity of up to 1,600 cc and a maximum power output up to 97 kW (130 hp), with the Honda Civic being an example of a Category A COE car. Any car with an engine capacity beyond 1,600 cc or a maximum power output exceeding 97 kW (130 hp) will continue to fall into Category B.
The decision to modify the system is to allow for more mass-market EVs to come under Category A COE in Singapore and promote the adoption of EVs by making them (somewhat) cheaper to own. In 2017, 314 EVs were registered in Singapore, which increased to 560 units in 2018 when the Vehicular Emissions Scheme (VES) was introduced.
The following year, EV registrations in Singapore doubled to 1,120 units and rose higher still to 2,942 units in 2021, signalling increased demand for EVs. However, the revised Category A COE for EVs has also seen COE premiums increase from before, affecting all buyers looking for a vehicle in said category, regardless if its fully electric or not.
Following the latest tender exercise which closed last Friday (May 6, 2022), the COE premium for Category A stood at SGD70,901 (RM223,208), which is 3.2% higher from SGD68,699 (RM216,313) from the second bidding in April. Meanwhile, the COE premium for Category B was at SGD92,090 (RM289,914), 2.3% higher than SGD90,002 (RM283,390) during the previous round of bidding.
The increase in COE premiums is despite the larger quota of 11,951 from May 2022 to July 2022 (it was previously 10,452 from February 2022 to April 2022), with The Straits Times reporting that the general consensus among car dealers is that the demand was driven by the entrance of the lower powered EVs into the category.