[SINGAPORE] Two schemes to encourage the adoption of electric vehicles (EVs) in Singapore have been extended, and revised to provide lower rebates.
The Vehicular Emissions Scheme (VES), which is meant to nudge drivers to opt for cars with lower emissions, will be extended for two years from Jan 1, 2026 to Dec 31, 2027. The scheme’s criteria will be tightened, with petrol hybrid cars no longer getting any rebates.
Cars with high exhaust emissions and fall in the most polluting banding under VES will incur a surcharge of S$35,000 in 2026, up from S$25,000 currently. In 2027, the surcharge will be raised to S$45,000.
Separately, the Electric Vehicle Adoption Incentive (EEAI) will be extended for a year, and discontinued in 2027, said the Land Transport Authority (LTA) and the National Environment Agency (NEA) on Monday (Sep 8). Both incentive schemes were due to expire on Dec 31, 2025.
The rebate provided under this scheme will be halved from S$15,000 to S$7,500.
This means that from Jan 1, 2026, the maximum combined rebate for EV buyers from both schemes will be S$30,000, down from the current S$40,000. This will drop to S$20,000 in 2027, after the early adoption incentive ends.
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Motor dealers expect buyers to rush to beat the deadline for the current incentives following the announcement, with some expecting premiums for certificates of entitlement (COEs) to set record highs before the end of 2025.
In their joint statement, LTA and NEA said: “We expect a short-term increase in COE prices. Potential car buyers are strongly encouraged to be prudent in bidding for COEs.”
The authorities said the adoption of cleaner energy vehicles, which covers EVs and hybrids, has been rising. Such vehicles accounted for 80 per cent of new car registrations made between January and August, and EVs make up half of that figure.
The revisions are driven by the increased adoption of EVs and the narrowing gap between the upfront cost of electric cars and petrol-engine cars, the agencies added.
“The overall benefits will continue to be tapered as Singapore gets closer to 100 per cent cleaner energy vehicles by 2040, in support of our national target to achieve net-zero emissions by 2050,” it said.
This marks the second revision to EEAI since it was introduced in 2021 with up to S$20,000 in tax rebate for EVs. The amount was reduced to S$15,000 for the 2024 to 2025 period, and it will be cut to S$7,500 in 2026 before it is removed.
The VES began in 2018 to encourage buyers to choose lower emission cars. In its current iteration, which expires on Dec 31, 2025, rebates for vehicles range from up to S$25,000 for EVs and S$2,500 for hybrids, while the surcharge for high emission vehicles go up to S$25,000.
Both VES and EEAI rebates are given when a new car is registered, offsetting the price for the consumer.
Associate Professor Walter Theseira from the Singapore University of Social Sciences said the reduction in EV subsidies is expected as they were given initially to help offset the higher upfront cost associated with the technology.
It also makes sense to cut back now, said Prof Theseira, given the sales success of Chinese EV brands. So far in 2025, Chinese EV brand BYD is registering more cars than any other brand in Singapore.
He added: “It is clear that EV subsidies are not needed in full force when you have Chinese carmakers being able to sell vehicles at more competitive prices and with better features than cars with combustion engines.”
As for the increasingly punitive surcharges slapped on combustion engine cars, Prof Theseira said the VES has been based on gradually increasing the pressure on combustion engine cars to make them less attractive. THE STRAITS TIMES
