{"id":19904,"date":"2025-12-15T07:03:42","date_gmt":"2025-12-14T23:03:42","guid":{"rendered":"https:\/\/sgbuzz.com\/?p=19904"},"modified":"2025-12-15T07:03:42","modified_gmt":"2025-12-14T23:03:42","slug":"rebate-cuts-wont-hurt-singapores-momentum-as-south-east-asias-top-ev-market-in-2026","status":"publish","type":"post","link":"https:\/\/sgbuzz.com\/?p=19904","title":{"rendered":"Rebate cuts won\u2019t hurt Singapore\u2019s momentum as South-east Asia\u2019s top EV market in 2026"},"content":{"rendered":"
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The Republic\u2019s EV take-up is expected to rise due to a continued price advantage and new benefits for electric heavy vehicles <\/p>\n
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[SINGAPORE] The Republic\u2019s electric vehicle (EV) adoption rate should continue to grow in 2026 despite a cut in incentives for passenger EVs, say industry observers.<\/p>\n
Passenger EV sales will be driven by cost-effective China models and increased competition among such brands, and supported by a growing charging network and higher surcharges on petrol-driven cars.<\/p>\n
In the commercial sector, take-up should also be boosted by new incentives of up to S$40,000 for electric heavy vehicles (EHVs).<\/p>\n
\u201cAs a compact city-state with high fuel costs, expanding charging infrastructure and a growing range of competitive EV models \u2013 particularly from Chinese brands \u2013 Singapore is expected to continue leading EV adoption in South-east Asia in 2026,\u201d said Timothy Wong, a principal for consultancy Roland Berger.<\/p>\n
EVs should continue to form a growing share of new passenger car registrations, added Wong, who leads the firm\u2019s automotive and mobility practice in South-east Asia.<\/p>\n
For the first nine months of 2025, EVs made up 43 per cent of new car registrations in Singapore, up from 33.8 per cent in 2024.<\/p>\n
Observers predict Singapore will be the leading market for passenger EV adoption in South-east Asia in 2025, a trend that should continue in 2026 as well. <\/p>\n
\u201cThe figure for Singapore is the highest in South-east Asia, ahead of Vietnam and Thailand, with (other countries) such as Malaysia, Indonesia and the Philippines much further behind,\u201d said Chua Soon Ghee, senior partner at consulting firm Kearney.<\/p>\n
Industry estimates for EV adoption for this year range from 40 to 50 per cent for Singapore, 30 to 40 per cent for Vietnam, and 25 to 30 per cent for Thailand. <\/p>\n
Chua said that Singapore leads the region as range anxiety is much less of an issue in the island-state, and the Singapore government has adopted a series of coordinated policies to boost EV adoption, including incentives, developing charging infrastructure, and putting in place clear road maps and regulations that promote the take-up of EVs.<\/p>\n
He added that the entry of Chinese players is another major factor, as they have found it easy to enter the market and drive adoption with aggressive pricing. <\/p>\n
China speed <\/h2>\n
\nChina brands such as Nio will continue to enter market in 2026, increasing competition and driving adoption. PHOTO: AFP<\/span><\/figcaption><\/figure>\n<\/p><\/div>\n
This optimistic outlook comes despite a reduction in EV incentives. From Jan 1, 2026, the maximum rebate for EVs will fall to S$30,000, from S$40,000 now.<\/p>\n
This comes from changes to two schemes. The EV Early Adoption Incentive, whose rebate falls to S$7,500, from S$15,000 now.<\/p>\n
And under the Vehicular Emissions Scheme (VES), the top tier rebate will fall to S$22,500, from S$25,000 now.<\/p>\n
VES incentivises cleaner, efficient cars \u2013 with the most efficient category being for full EVs only \u2013 and penalises more pollutive ones.<\/p>\n
Yet even with the lower incentives, demand for EVs will continue to rise, said Chua. This is because a \u201cvalue gap\u201d remains between EVs and traditional internal combustion engine (ICE) vehicles.<\/p>\n
EVs, particularly Chinese models, are estimated to be S$25,000 to S$50,000 cheaper than comparable ICE cars, whether these are fully petrol or petrol-electric hybrids.<\/p>\n
Apart from incentives, this is also due to aggressive pricing and appealing packages with longer warranties and advanced features.<\/p>\n
Industry observers expect China EV brands to continue their aggressive sales strategies because overseas markets are more profitable, as China\u2019s domestic market features intense price competition.<\/p>\n
Price competition among China EV brands in Singapore will likely intensify in 2026 as more brands begin sales. These include major players such as Singapore Exchange-listed Nio, as well as Hongqi, which have announced their 2026 entry plans. <\/p>\n
There were 19 China or China-owned brands among new cars registered in 2025, compared to 14 in 2024. <\/p>\n
National University of Singapore associate professor Jimmy Peng said: \u201cThis influx gives Singaporeans more EV choices and is likely to keep driving prices down, making electric cars even more attractive for buyers.\u201d<\/p>\n
While the fall in incentives might temporarily dampen short-term quarterly growth of EV adoption, take-up will be boosted by an increase in penalties for non-EVs, he added.<\/p>\n
The VES changes do not just affect the top efficiency tier.<\/p>\n
The second-highest tier, in which the more efficient petrol-electric hybrids fall, will no longer enjoy the current S$2,500 incentive; instead, they will neither receive an incentive nor a surcharge.<\/p>\n
The three remaining tiers will cover mainstream cars to larger, more powerful cars that have more emissions, which includes both full ICE cars and some hybrids. The surcharge for these tiers will increase from S$7,500 to S$10,000, up to a maximum surcharge of S$35,000. <\/p>\n
\u201cAs VES penalties for polluting vehicles rise, purchasing and owning high-emission vehicles will become less attractive,\u201d said Prof Peng.<\/p>\n
\u201cCoupled with the phase-out of hybrid rebates, the market share for ICE\/hybrid vehicles is expected to further decline.\u201d<\/p>\n
Heavy charges<\/h2>\n
Rising EV adoption is supported by the continued expansion of Singapore\u2019s charging network. <\/p>\n
The nation aims to have 60,000 charging points by 2030. As at October 2025, there were about 25,000 points, about half of which are public.<\/p>\n
With petrol prices and electricity tariffs both remaining stable in the past two years, EVs remain cheaper to run in terms of energy costs. <\/p>\n
Prof Peng added: \u201cGiven that fast charging for EVs costs less than half the equivalent in petrol cost, positive EV uptake will continue in the future.\u201d<\/p>\n
Meanwhile, new incentives should boost the registrations of EHVs. <\/p>\n
Unlike passenger EVs and light commercial EVs, EHVs do not currently receive subsidies.<\/p>\n
Consultancy AlixPartners noted that EVs accounted for 4.2 per cent of newly registered heavy trucks and buses in Singapore as at Oct 25. This is up from 3.1 per cent at the end of 2024. <\/p>\n
In comparison, light commercial EVs have received incentives since 2021 and make up 57.3 per cent of new light goods vehicle registrations this year, up till October 2025. <\/p>\n
But from Jan 1, 2026, businesses registering an EHV \u2013 such as goods vehicles, goods-cum-passenger vehicles, or buses \u2013 with a maximum laden weight exceeding 3,500 kg will qualify for a S$40,000 incentive per vehicle and S$30,000 per attendant charger. <\/p>\n
At the point of purchase, EHVs can cost two to three times more than equivalent diesel models. This is because they require batteries that have a larger capacity \u2013 more than double that of passenger EVs \u2013 and are thus more expensive. <\/p>\n
But they are more affordable to operate in terms of energy costs, and require less maintenance than their diesel counterparts.<\/p>\n
Zhang Yichao, a partner at AlixPartners, said that EHVs have a \u201cproven advantage\u201d in ownership costs over diesel heavy vehicles. He thus expects the incentives to further accelerate the adoption of EHVs. <\/p>\n
Kim Yoon Young, cluster president for Singapore and Brunei at Schneider Electric, said that the new incentives for EHV chargers are also important. <\/p>\n
\u201cThe additional S$30,000 subsidy specifically for chargers plays a crucial role,\u201d he said. \u201cCharging infrastructure represents a significant cost for electric heavy vehicles, which require faster chargers that are also more expensive.\u201d<\/p>\n
Schneider is an energy solutions company that manufactures EV chargers. A survey it conducted in Singapore found that 57 per cent of heavy vehicle owners intend to electrify their fleets, while 65 per cent of companies that lease such vehicles intend to as well.<\/p>\n
\u201cThis sentiment bodes well for the future of electric heavy vehicle adoption in Singapore,\u201d he added. <\/p>\n
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