Commercial Vehicle Emissions Scheme (CVES): What Is It And How Much Can Businesses Get For Switching To Electric Vehicles?

It’s no secret that the cost of vehicle ownership in Singapore – whether passenger or commercial – is one of the highest in the world. But unlike individuals who have the option to switch to public transportation, businesses require commercial vehicles to engage in their commercial trade or activities. 

One way that businesses can reduce the cost of vehicle ownership is to utilise the commercial vehicle emissions scheme (CVES), which provides a cash grant if they buy an electric vehicle instead of one with an internal combustion engine.

Initially introduced in April 2021 to encourage the adoption of cleaner light commercial vehicles for a period of two years, the scheme has been revised and extended till 31 March 2025. Here’s what you need to know about the latest CVES scheme and how much you can get for switching to an electric vehicle.

Goal Is To Shift Towards Cleaner-Energy Vehicles By 2040

Singapore wants to have a sustainable land transportation system as part of its long-term plan to reach its UN climate goals of net zero emissions by 2050. This includes ceasing the registration of new internal combustion engine (ICE) cars and taxis from 2030 and eventually phasing out the ICE vehicles from our vehicle population by 2040 to reduce our carbon emissions and air pollutants.

This may seem like a tall order given that currently, as of the end of 2022, only 1,894 out of a total of 144,894 commercial vehicles (also known as Goods & other vehicles) are electric.

What Is The Commercial Vehicle Emissions Scheme (CVES)

The Commercial Vehicle Emissions Scheme (CVES), first introduced on 1 April 2021, is an outcome-based rebate scheme that applies to all new and used imported Light Goods Vehicles (LGVs), Goods-cum-Passenger Vehicles (GPVs), and small buses, all with maximum laden weight not exceeding 3,500 kg.

These vehicles are then classified into three Bands – A, B, or C – based on their worst-performing pollutant such as carbon dioxide (CO2), hydrocarbons (HC), carbon monoxide (CO), nitrogen oxides (NOX), and particulate matter (PM) emissions. Depending on the band, vehicles would be given either an incentive if they are the least polluting or be subjected to an additional surcharge if they are the most polluting.   

Since its introduction, the CVES has benefited over 6,700 consumers by awarding them cash incentives that help defray their purchase costs.

Read Also: Cost Guide To Buying A Commercial Vehicle In Singapore

Changes To CVES From 1 April 2023 To 31 March 2025

The CVES, which was to cease after 31 March 2023, has been extended for another two years, with a lower than planned stepdown of incentives till 31 March 2025.

For instance, instead of the previous $30,000 cash incentive for vehicles in Band A (the least pollutive), they will now receive $15,000. Similarly, Band C (the most pollutive), will now incur a penalty of $15,000 instead of the previous $10,000.

Source: NEA

Additionally, from 1 April 2023, Singapore will adopt the Worldwide Harmonised Light Vehicles Test Procedure (WLTP) as its sole test procedure when evaluating new light commercial vehicles. This will affect the models of light commercial vehicles that would fall under the different bands, as it’s a stricter test than previously used. 

Source: NEA

For businesses considering to purchase a light commercial vehicle from 1 April 2023, the following list may serve as a possible reference.

BandVehicle ModelsIncentive/Surcharge (+/-)
A– BYD T3
– Renault Kangoo Ze
– Toyota Proace City Electric
-Toyota Proace Electric
– Citroen Electric Dispatch
– Citron Jumpy SpaceTourer
– Opel E-Vivaro 3
– Mercedes e-Vito
– Nissan Townstar Electric
– DFSK EC35
– Maxus LDV e-Deliver 3
+$15,000
B– Honda N Van Style Fun
– Suzuki Every Join
– Nissan NV200
+$5,000
C– Nissan NV100
– Nissan NV250
– Nissan NV350
– Nissan NV350 Diesel
– Toyota Hiace Petrol
– Toyota Hiace Diesel
– Opel Combo Van
– Volkswagen Caddy TDI
– Volkswagen Caddy TSI
– Mercedes Sprinter 
-$15,000

Despite the revised incentives and surcharge quanta, businesses that switch to cleaner vehicles will enjoy a lower total cost of ownership over their lifespan compared to more pollutive ones.

For example, comparing the different types of models under the three bands, the estimated cost of vehicle ownership for businesses will amount to as follows:

  • The Certificate of Entitlement (COE) for commercial vehicles, Category C – Goods Vehicle & Bus, stands at $85,389 as of the latest bidding in March 2023. Though the cost of registering a commercial vehicle would include the COE price, we have excluded it from our calculations for simplicity’s sake.
  • The figures for the lifecycle cost of vehicles are referenced to Annex C, over a 10-year period.
 Band A – BYD T3  
(Electric)
Band B – Nissan NV200
(Petrol)
Band C – Volkswagen Caddy TDI
(Diesel)
Average Upfront Purchase Cost
(excluding COE)
$53,800$37,500$56,400
Average Upfront Purchase Cost
(After CVES)
$38,000$32,500$71,400
Average Lifecycle Cost Over 10 Years$42,000$81,500$67,000
Total Cost of Ownership Over 10 years
(After CVES)
$80,000$114,000$138,400

Based on the above estimated calculations, businesses will not only enjoy a lower upfront purchase price for an electric vehicle, but they will also make more savings on the running cost over its lifecycle compared to the more pollutive vehicle models.

Financial incentives aside, knowing the government’s push for cleaner-energy vehicles in the near term, it makes sense for businesses to take advantage of the current incentive under the CVES to switch their commercial fleet of vehicles to electric.

Read Also: 5 Fully Electric Commercial Vehicles You Can Buy In Singapore

Building a Sustainable Future

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