Singapore announces extension of EV incentives until December 31, 2025 – rebates cut for hybrid cars

Singapore has announced it will extend incentives meant to promote the adoption of clean energy vehicles until December 31, 2025. The move serves to support the country’s goal of phasing out sales of pure internal combustion engine (ICE) cars by 2040.

In a joint release by the Land Transport Authority (LTA) and the National Environment Agency (NEA), it was confirmed that the EV Early Adoption Incentive (EEAI), which was first introduced in 2021, will be maintained.

Owners who register electric cars and taxis in 2025 will continue to receive a rebate of 45% off the additional registration fee (ARF), albeit capped at SGD15,000 instead of SGD20,000. On a related note, the SGD0 ARF floor for electric cars and taxis will also be extended until December 31, 2025.

The ARF is the main tax imposed upon registration of a vehicle in Singapore and is calculated based on a percentage (the ARF rate) of a vehicle’s open market value (OMV), which is the approximate cost of a vehicle before taxes.

The Vehicular Emissions Scheme (VES), which imposes rebates or surcharges on vehicles sold in Singapore based on the emissions they emit corresponding to different bands, has also been revised, with non-EV cars being affected as a result.

The rebate for vehicles in the A2 banding, which mainly applies to hybrid cars, will be halved from SGD5,000 to SGD2,500 starting from January 1, 2025. However, the current VES band A1 that applies to most EVs will be maintained at SGD25,000.

“With the revised VES rebates in effect and the continuation of the EEAI, buyers will continue to enjoy combined cost savings of up to SGD40,000 off the ARF for electric cars in the said period. Most electric car models will enjoy the same level of rebates as today,” read the joint release.

It was also revealed that since 2021, about 20,000 EVs have benefitted from the VES rebates and/or EEAI. “Both the EEAI and the VES work in tandem to reduce the cost gap between cleaner energy cars (including electric and hybrid cars) and ICE cars, and have helped to boost adoption of cleaner energy cars. Cleaner energy car registration has increased to around 80% of all new car registrations between January 2024 and August 2024,” the LTA and NEA wrote.

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