EV Early Adopter Incentive (EEAI); VES; PARF and Road Tax: How Much Can You Really Save If You Buy An Electric Car In Singapore Today?

Since the launch of Tesla’s sales portal in Singapore and the government announcing that it will be rolling out the deployment of 60,000 charging points at public car parks and private premises by 2030, the interest in buying an electric car has increased significantly in Singapore.

The general sentiment is that with the government incentivising drivers via grants and schemes to adopt electric cars, buying an electric car is less expensive now. In addition, electric cars are also widely seen to be cheaper to run, since they rely on electricity rather than petrol.

Read Also: Cost Guide To Buying An Electric Car In Singapore

EV Early Adopter Incentive (EEVI) – Up to $20,000

The scheme that will likely attract the most people to buy an electric car is the EV Early Adopter Incentive (EEAI).

As announced by LTA in February 2020, the EEVI provides an ARF rebate of 45% when car buyers purchase a fully electric car from 1 January 2021 to 31 December 2023. This is capped at a maximum rebate of $20,000.

For example, the Tesla Model 3 has an estimated ARF payable of $76,959. A 45% rebate would translate to $34,631. Since this is capped at $20,000, the EEVI ARF rebate for the Tesla Model 3 will be $20,000.

Vehicle Emission Scheme (VES) – Up to $25,000

Under the Vehicle Emission Scheme (VES), cars in Singapore can enjoy an ARF rebate or pay a surcharge depending on how much pollutant their vehicle emits. The is based on how much carbon dioxide (CO₂) a car emits along with 4 other pollutants. These 4 pollutants are Hydrocarbons (HC); Carbon Monoxide (CO); Nitrogen Oxides (NO_X); Particulate Matter (PM). Grading is based on the worst-performing pollutant in your car and that determines your vehicle’s band and its corresponding VES rebate or surcharge.

VES rebate or surcharge can range from as high as a $25,000 rebate for cars that qualifies for the highest band of A1, to a surcharge of up to $20,000 for cars that falls under the lowest band of C2. From 1 July 2021, the vehicle surcharge for C2 will increase to $25,000.

Since most electric cars fall qualify under the highest band of A1, they enjoy the $25,000 ARF rebate. If you add the VES ($25,000) to the EEVI (up to $20,000), you could potentially enjoy up to $45,000 in ARF rebate for buying an electric car.

No Minimum $5,000 ARF For Electric Cars

In Singapore, there is a minimum ARF of $5,000 that is payable for all cars being registered, regardless of the tax rebate a car is entitled to. From January 2022 to December 2023, the minimum ARF of $5,000 will be lowered to $0 for all electric cars.

This will be significant in reducing the cost of more affordable electric car models in Singapore.

Take for example the BYD e6. Currently, it’s listed at $104,88, which includes an ARF of $5,000. With an OMV of $28,000, the ARF that it incurs before rebate is $31,200.

When you subtract the EEVI rebate ($14,040) and the VES rebate ($25,000), the theoretical ARF becomes negative. Currently though, the minimum ARF payable is $5,000.

From January 2022 to December 2023, the minimum ARF for electric cars will be reduced to $0. With all other factors remaining the same, an electric car like the BYD e6 that is currently paying the minimum ARF of $5,000, will have its ARF reduced to $0 and become cheaper to buy.

For cars such as the Tesla Model 3, the reduction in minimum ARF payable won’t make a difference since its ARF is already above $5,000, even after taking into account the EEVI and VES tax rebates.

Road Tax For Electric Cars

If you are buying an electric car, the road tax calculation will be different from internal combustion engine cars.

Road tax will be calculated based on the Power Rating (kW) of the car.

Also, there is also an additional $700/year that will be added to the road tax for fully electric cars, since these cars do not pay fuel excise duties. This will be phased in over the next three years.

For example, with a power rating of 239kW, the Tesla Model 3 will have a road tax of $2,526 + $200 (additional road tax for electric cars in 2021) = $2,726 in 2021. This will increase to $3,226 in 2023.

With a power rating of 90kW, the road tax for the BYD e6 will be $743 + $200 (additional road tax for electric cars in 2021) = $943 in 2021. This will increase to 1,443 in 2023.

In a previous article, we compare the Hyundai Ioniq Electric and the Hyundai Ioniq Hybrid and calculated that the difference in road tax between the two is $788 a year (in 2023), with the electric car model being more expensive. Over a period of 10 years, this amount will add up to be $7,880 in road tax. This is largely due to the additional road tax for electric cars which will be $700 a year from 2023 onwards.

Running Cost For Electric Cars

Electric cars are generally cheaper to run.

Since different brands and models have different fuel efficiency/power usage, it’s not always easy to compare. However, there is one example in Singapore that we can make reference to today – the MG ZS Electric with the MG HS. Both of these are SUV car models under the MG brand. They are not the same car, but this is a realistic comparison.

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According to MG, the MG ZS Electric has an energy consumption of 14.7 kWH/100km. Based on the current electricity tariffs of 22.21 cents/kWH, this means it will cost about $3.26 to drive 100km.

Source

According to MG, fuel consumption for the MG HS is 14.7km/l. This means to drive 100km, you will need about 6.8 litres. Assuming a cost of $2.20 per litre, this means it will cost about $15 to drive 100km, or about $11.74/100km more compared to the electric car.

Assuming a monthly usage of 1,000km, you will be spending about $117.40 more each month in fuel, or about $1,408 more each year. This offsets the additional $700 in road tax that you will be paying each year.

However, it’s worth noting that we are making two assumptions here.

The first is that the fuel consumption and energy usage numbers reported by the manufacturer is what we will be getting. This may not always be the case.

The second assumption is that you have access to your own charging station at home or in the office. If you intend to charge regularly as an external EV charging point such as Shell Recharge, it will cost $0.55 per kWH. Blue SG charges $1 for the first three hours and $2 for subsequent hours with an average supply of 3.7 kW per hour.

So if you are regularly charging at an external charging point, you may not enjoy as much cost savings.

Read Also: 5 Cheapest Electric Cars In Singapore

To conclude, the EEVI and VES rebates of up to $45,000 make it attractive for car buyers today to consider an electric car.

However, in order to optimise for cost savings over the long-term, it’s likely that you will need to have access to your own charging station such as at home or at your office. This means you likely need to be staying in a landed property, or have your own personal car park space in the office to install your charger to charge your car regularly.

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