Govt reduces incentives for commercial vehicle schemes, announces extension till Mar 31, 2025

BUYERS of commercial vehicles will get smaller tax rebates when switching to electric models from Apr 1, 2023, under a revised Commercial Vehicle Emissions Scheme (CVES).

The incentive for electric commercial vehicles in Band A will be reduced from S$30,000 now to S$15,000, said the authorities on Tuesday (Nov 15) when announcing a two-year extension of the scheme till Mar 31, 2025.

Vehicles in Band B will get a S$5,000 rebate, down from S$10,000 now, while the surcharge for more pollutive models in Band C will be increased to S$15,000 from S$10,000.

The Straits Times had in August reported on the proposed CVES changes, which included reducing the rebate in Band A to S$10,000, replacing the Band B rebate with a neutral band with neither a rebate nor surcharge, and retaining the S$10,000 surcharge in Band C.

In a joint statement with the Land Transport Authority (LTA), the National Environment Agency (NEA) said it has taken note of the industry’s concerns over the higher upfront cost of electric commercial vehicles, and “made adjustments for a more gradual step-down in Band A incentives”.

Only electric models with a carbon dioxide emission of no more than 123g/km will qualify for Band A, down from 150g/km currently.

Threshold levels for carbon dioxide, hydrocarbons and particulate matter will also be lowered, while the level for nitrogen oxides will surprisingly be raised. The threshold for carbon monoxide will remain unchanged.

NEA and LTA said the Early Turnover Scheme (ETS), which incentivises owners of older, more pollutive diesel commercial vehicles and buses to replace them, will also be extended till Mar 31, 2025. The discount to replace an older vehicle will be reduced in most instances under the updated ETS.

“The adjustments to the CVES pollutant thresholds will continue to ensure a balanced variety of vehicle models across bands, while the adjusted CVES and ETS incentives will also maintain momentum towards cleaner vehicles,” said the authorities.

NEA’s changes coincide with the so-called Worldwide Harmonised Light-duty Vehicles Test Procedure, which measures vehicle pollutant levels under more realistic conditions, and will likely result in higher pollutant levels measured. It will kick in here for new commercial vehicles from Apr 1, 2023. THE STRAITS TIMES