Singapore to stop registration of diesel cars and taxis from 2025

Singapore

SINGAPORE will cease new registrations of diesel cars and taxis from 2025, with all new car and taxi registrations to be of cleaner-energy models from 2030, said Minister for Transport Ong Ye Kung on Thursday.

Fleet operators seemed unsurprised by the announcement even though this is five years earlier than the target to have all new vehicles be "cleaner energy" models by 2030.

Diesel vehicles made up about 85 per cent of Singapore's taxi fleet five years ago but they now comprise about 40 per cent of the country's 15,888 taxis.

As of January, there are 18,081 diesel cars on the roads here, making up about 2.8 per cent of Singapore's car population, according to the Land Transport Authority (LTA).

ComfortDelgro Corporation's group chief corporate communications officer Tammy Tan said they have a "large fleet" of hybrids and have been trialling EVs with the intent for mass rollout.

"Close to 60 per cent of our 10,000 strong taxis are currently petrol-electric hybrids and fully electric. The group plans to fully replace the taxi fleet with hybrids by 2023 and to accelerate the addition of fully electric taxis," she said.

Lien Choong Luen, general manager of Gojek Singapore meanwhile said the company is working with fleet partners to explore how to introduce more cleaner energy vehicles into their fleet.

Mr Ong also announced that road taxes for mass-market electric cars will be lowered. It had already been lowered in January but larger mass-market EVs still incur more road tax than internal combustion engine equivalents, said Mr Ong.

This is in addition to the lowering of the additional registration fee floor for all electric cars from S$5,000 to zero.

The road tax adjustments will see the LTA, which takes over the Energy Market Authority as regulator of EV charging standards, merge the current tax bands of 30-90kW and 90-230kW.

Following these adjustments, a Hyundai Kona Electric will see its annual road tax fall from about S$1,400 to S$1,100, while the annual road tax for a Tesla Model 3 will drop from S$2,300 to S$1,500.

"This is definitely positively looked upon especially for the more higher-powered vehicles," said Paul Welsford, the vice-president of the Electric Vehicle Association of Singapore (EVAS), adding that the majority of cars in the market fall within the 90-230kW band.

But a DBS Group Research spokesperson questioned if this is a strong enough pull. "Take for example the Nissan Leaf - the difference is only 12 per cent, whereas for Hyundai Kona the savings are 24 per cent."

Separately, the road tax schedule for bigger EVs (those above 230kW) will remain. Noting that they are "big luxurious cars", Mr Ong said he is not inclined to fix it given that a large part of road tax is a luxury tax.

Meanwhile, the government will be ramping up the number of EV charging points installed, with plans for eight EV-ready towns with chargers at all HDB carparks by 2025.

All new HDB carparks will also be required to have sufficient electrical capacity to support EV slow charging in 15 per cent of their car parking lots, with a minimum number of chargers installed in these lots. This requirement will also be imposed on new private buildings and existing buildings undergoing major redevelopment.

This is part of the Republic's plan to have 60,000 charging points by 2030.

For DBS Group Research, the government's aggressive plan to install charging stations in public car parks and HDBs might prove the greater push compared to tax cuts.

It also noted that Hyundai and SP Group have said they will invest in the expansion of the charging infrastructure and develop a new business model for battery leasing. This should reduce the initial cost burden for EV buyers, they said in an email interview.

For condominiums, the government is introducing an EV Common Charger Grant to catalyse implementation. This is part of the S$30 million allocation announced in the Budget to kickstart the build-up of shared charging infrastructure.

Condominiums will be able to apply for the grant to defray part of the cost of installing a charger, subject to a quantum cap. This will be made available to the first 2,000 chargers installed from July 2021.

On the question of "fast" charging points, Mr Ong said it would be too costly and time-consuming to implement immediately thereby "severely impeding" the adoption of EVs.

For fleet operators who need fast charging to support their business operations, they need to be prepared to invest in building up the infrastructure to support their operations.

But Satya Ramamurthy, partner and head of infrastructure, government and healthcare at KPMG in Singapore, said it is not simply a question of putting up cash.

"Current regulations on EV, namely TR 25 standards published in 2016, will need to be refreshed in response to developments in new fast-charging technologies, which exceeds the current capacity regulated by the TR 25 standard," he said.

As such, any decision taken by car fleets will not only require readiness of EV charging infrastructure, but also changes to relevant regulations.

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