The Singapore Budget 2020 is offering incentives to encourage motorists to switch to cleaner cars.
This move is part of the Government’s vision of phasing out internal combustion engine (ICE) vehicles by 2040. It also wants vehicles then to be running on cleaner energy.
Here’s what else you should know.
1) GOV’T WANTS MOTORISTS TO BUY EVs
A new EEAI or EV Early Adoption Incentive will run from 2021 to 2023.
Under EEAI, buyers will get 45% off (capped at $20,000) the ARF (additional registration fee) of new electric vehicles (EVs).
For instance, as of November 2019, the current ARF payable for a Renault Zoe is $39,376. With EEAI, the ARF payable is lowered by $17,719.
This reduces the upfront cost of acquiring an electric car.
But the downside is a reduction in your PARF (Preferential Additional Registration Fee) rebate when you scrap your vehicle.
The PARF rebate is 50% of your ARF (Additional Registration Fee) when your car is between nine and 10 years old.
2) ROAD TAX FOR EVs REVISED
The 6-month road tax formula for electric cars will be revised from January 1, 2021 onwards. Refer to these tables from LTA.
3) EVs WILL INCUR AN ADDITIONAL FEE
Look closely at the above table and you’ll notice that EVs will also incur an Additional Flat Fee annually. This will be $200 in 2021, $400 in 2022 and $700 in 2023.
The Government says that the Additional Flat Fee is needed to help offset the loss in excise duties from fuel sales. Excise duties amount to almost $1 billion annually.
Despite this additional fee, the Government says that the annual usage cost of an EV will be about 9% lower than the ICE equivalent.
4) OWNERS OF HYBRIDS WILL PAY LESS ROAD TAX
The Government says it will align the road tax schedule for petrol-electric hybrids with the new one for EVs.
Actual figures haven’t been announced, but hybrid owners can expect an average reduction in road tax by 29%.
However, it is important to note that hybrids may one day be liable for the Additional Flat Fee. The Gov’t indicated that it only does not plan to impose this “for now”.
5) 28,000 CHARGING POINTS BY 2030
The Gov’t aims to have 28,000 charging points by 2030. That’s ambitious, considering there are only around 1600 points now.
More charging points will mean more motorists will consider owning an EV. If you no longer must think about where you can charge your EV, it may help convince you to buy one.
