Car dealers trim EV prices ahead of new COE rule

Singapore

MAY the Fourth be with you, if you're eyeing a new electric vehicle (EV). That's the date many EVs are expected to become cheaper here, thanks to a change to the certificate of entitlement (COE) system designed to spur electric car adoption by making them more affordable.

Transport Minister S Iswaran announced the COE tweak in Parliament on March 8. The change will see some EVs shuffled from the Quota System's Category B to Category A, which is typically the segment with the lowest premium. This week's COE auction ended with Category A at S$68,501, a fresh high for 2022 but still a good S$26,388 cheaper than the Category B certificate.

The move affects EVs with a maximum power output of up to 110 kilowatts, which will be reclassified as Category A cars when registered with COEs from May onwards.

The classification currently includes cars with engines up to 1.6 litres in capacity and less than 97 kW. EVs tend to be relatively powerful to compensate for weighty batteries, so even mass-market models cross the 97 kW threshold. The COE adjustment is meant to herd them away from Category B, where bidding from luxury car buyers can make things expensive.

Some observers welcomed the move as positive news for the EV landscape. "We're hoping that this will encourage automakers and dealers to bring in more models to the market, because they will now qualify for Category A," Sujay Ravikumar, the Electric Vehicle Association Singapore (EVAS) Secretary told The Business Times. "In parallel, existing models which move to Category A should get a boost in sales as they may be up to S$30,000 cheaper."

Some dealers have already responded to the rule change even though they will only be able to start bidding for COEs in May for any EVs they sell now.

Tan Chong Motor Sales cut the price for the Nissan Leaf from S$179,800 with COE to S$159,800, a price that includes a home charger and installation.

Eurokars EV responded more aggressively, slashing the price of the MG ZS EV from S$163,888 to S$135,888.

In contrast, Hyundai agent Komoco Motors continued to price its electric models according to the Category B premium.

One general manager in the trade described it as "challenging" to set prices nearly 2 months before the new rule takes effect.

The Transport Minister announced the COE change along with other measures to speed EV adoption, such as a plan to install at least three chargers in around 2,000 HDB car parks by 2025.

In time, that could get some drivers to think about making the switch to an EV, but buyers who already stand to save tens of thousands when the new COE system kicks in can look forward to a merry month of May.