JOINT NEWS RELEASE BETWEEN NEA AND LTA
Singapore, 12 November  2020  &ndash To further promote the adoption of cleaner vehicles and to discourage purchases of more pollutive models, the current Vehicular Emissions Scheme (VES) for new cars taxis and imported used cars, will be enhanced with increased rebates and higher surcharges. The enhanced scheme will take effect on 1 January 2021, when the current VES expires at the end of this year, and last till 31 December 2022.

2        From 1 January 2021, the rebates for vehicles in both Bands A1 and A2 will be increased by $5,000 for cars, and $7,500 for taxis [1]. This means a car in Band A1 will enjoy a $25,000 rebate instead of $20,000, and a car in Band A2 will enjoy a $15,000 rebate instead of $10,000.

3        With the enhanced VES, coupled with the Electric Vehicle Early Adoption Incentive (EEAI) [2], commencing on 1 Jan 2021, buyers will be able to enjoy combined cost savings of up to $45,000 when they purchase a new fully electric car, and up to $57,500 for a new fully electric taxi (refer to  Annex A  for sample calculations). The higher savings will encourage EV adoption by further narrowing the upfront cost gap between electric cars and their Internal Combustion Engine (ICE) equivalents.

Increased Surcharges to Kick In on 1 July 2021

4        To allow time for the market to adjust, the surcharges for vehicles in both Bands C1 and C2 will be increased only from 1 July 2021, by $5,000 for cars, and $7,500 for taxis. Between 1 July 2021 and 31 December 2022, a car in Band C1 will incur a surcharge of $15,000 instead of $10,000, and a car in Band C2 will incur a surcharge of $25,000 instead of $20,000. There will be no change in the pollutant criteria for each VES band for the duration of the enhanced scheme (refer to  Annex B  for the new VES schedule).

5        The changes to the VES rebate/surcharge structure are shown in the table below.

 

6      The VES, which came into effect on 1 January 2018, is aimed at encouraging buyers to choose car models with lower emissions across five pollutants[3]. This helps reduce carbon emissions[4]  and improve ambient air quality. The scheme has been effective in encouraging the purchase of cleaner car models. Between Q3 2018 and Q1 2020, the number of new cars registered in Certificate of Entitlement (COE) Categories A and B that qualify for rebates under VES Bands A1 and A2 increased by around 60 per cent, while the number of new cars subject to surcharges under VES Bands C1 and C2 has fallen by around 20 per cent.

Future Plans to Promote Cleaner Vehicles

7          NEA and LTA regularly engage the vehicle industry on policies to reduce vehicular emissions and improve ambient air quality. To this end, NEA will be contacting the industry in due course for consultations on the possibility of tightening VES band thresholds in future.

8        Buyers and motor dealers may contact NEA at 1800-CALL NEA (2255-632) for enquiries on the VES. More information on the VES can be found at:  https://www.onemotoring.com.sg/content/onemotoring/home/buying/upfront-vehicle-costs/emissions-charges.html#VES_At_a_glance.