Singapore has announced it is making a push to promote the adoption of electric vehicles (EV) beginning from next year, as it makes the move towards phasing out the sale of internal combustion engine (ICE) vehicles by 2040.
New measures to make EVs a more attractive proposition were announced by the country’s deputy prime minister Heng Swee Keat in his Budget speech earlier today. This includes expanding the EV charging infrastructure in the republic from 1,600 points presently to 28,000 island-wise by 2030. It will also include an early-adoption incentive scheme for EVs, which will be in place from 2021 to 2023.
“We are placing a significant bet on EVs, and leaning policy in that direction because it is the most promising technology. Our vision is to phase out ICE vehicles and have all vehicles run on cleaner energy by 2040,” he said.
The country already has a Vehicular Emissions Scheme (VES) in place. Introduced in 2018 and valid till December 31 this year, this provides an upfront rebate of up to S$20,000 (RM59,700) for the cleanest, low-emission vehicles.
According to Today, the EV early adoption incentive will provide further rebates on top of this, in which EVs will receive a rebate of up to 45% on the vehicle’s additional registration fee, capped at S$20,000 (RM59,700). Presumably, this will involve the VES being extended in 2021 to offer the maximum rebate.
A Commercial Vehicle Emissions Scheme for light goods vehicles, similar to VES – which is applicable for cars and taxis – will also be introduced, with details of that plan expected to be announced in the next few weeks.
The government is also set to revise the method of calculating road tax for cars from January 2021. For EVs, this will take into account the loss of fuel excise duties, which yields the government a sginificant revenue of around S$1 billion a year.
“Ideally, we would like to implement a usage-based tax on EVs as an alternative to fuel excise duties. But the technology to do this properly on EVs is the next generation ERP (electronic road pricing) system, and distance-based charging using ERP is still several years away,” Heng said.
In the interim, he said a lump-sum tax will be built into the road tax schedule for EVs to partly account for the loss in fuel excise duties. This will be phased in over three years, beginning next January at a rate of S$100 (RM299), then S$200 (RM597) in 2022 and S$350 (RM1,044) from 2023 onwards.
“Total road tax, after the revision in methodology and the new lump-sum tax, will be higher for some EV models. However, EV buyers can expect to enjoy substantial cost savings because of the significant EV early adoption incentive,” he explained.
Malaysia is set to unveil its National Automotive Policy (NAP) 2020 this Friday, February 21. Will we see a similar line of thought towards electrification in our revised policy?
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