Budget 2025: Government to spur zero-emissions heavy vehicles adoption through new scheme

THE government will provide incentives for the adoption of clean energy variants of heavy vehicles, said Finance Minister Lawrence Wong on Tuesday (Feb 18). 

At his Budget 2025 speech, the minister noted that the adoption of clean heavy vehicles has been slower due to limited model availability, higher upfront costs and less-accessible charging infrastructure.

To encourage the adoption of such vehicles, he said that the government will introduce a new Heavy Vehicle Zero Emissions Scheme and an Electric Heavy Vehicle Charger Grant. The grant will provide co-funding for the charging infrastructure that is needed.

He added that to maintain parity with the usage charges for internal combustion engine (ICE) heavy vehicles, an Additional Flat Component (AFC) of road tax will also be introduced for electric heavy goods vehicles and buses.

The AFC will be set at S$250 a year for electric heavy goods vehicles, and S$190 and S$550 for electric minibuses and large buses, respectively.

It will be phased in over three years starting from January 2026 and will be implemented in full by January 2028, the finance minister said.

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This mirrors earlier moves to introduce an AFC for cars and electric light goods vehicles.

He noted that currently, drivers of ICE vehicles pay fuel excise duties that contribute to revenue and also serve as a form of usage charge.

For more Budget stories, visit businesstimes.com.sg/singapore-budget-2025