Commercial vehicle COE premium up 5.4% at record high of S$92,223

[SINGAPORE] The Certificate of Entitlement (COE) premium for commercial vehicles set a new record as most categories rose in May’s second round of bidding that ended on Wednesday (May 20).

The price for Category C, applicable to commercial vehicles and buses, increased 5.4 per cent to S$92,223, exceeding the previous record of S$91,101 set in March 2023.

Industry observers ascribed the rise to an increased demand for commercial vehicles, especially electric heavy vehicles (EHVs), which has been driven by the introduction of incentives in 2026.

Vynn Tu, general manager for Renault at Wearnes Automotive, said: “With diesel prices remaining elevated and new incentives introduced for EHVs, more companies are accelerating the replacement of their (internal combustion engine fleets) with EVs, leading to a recent surge in demand.”

In a media statement, a spokesperson for the Land Transport Authority (LTA) said: “For Category C in particular, we have seen an increase in (electric heavy goods vehicles) and e-bus registrations since January 2026, which may be due to the increasing take-up of the Heavy Vehicle Zero Tailpipe Emissions Scheme (HVZES).”

The category has been on an upward trend in 2026 – the latest premium hike is its seventh consecutive increase since February’s first round of bidding at S$74,801.

Mainstream cars were the only category to post a decrease. The premium for Category A was down 0.4 per cent or S$561 at S$124,229, marking the segment’s first decrease since February’s first round of bidding.

Category A applies to cars that have engines of up to 1,600 cubic centimetres (cc) in capacity or with up to 97 kilowatts (kW) of power, or for electric vehicles (EVs) with up to 110 kW of power.

The Category B premium was up 2.6 per cent or S$3,265 at S$129,501, a six-month high and a level not seen since last November.

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Category B is for larger, more powerful cars with engines of more than 1,600 cc in capacity or that have more than 97 kW, or for EVs with more than 110 kW.

The motorcycle category, D, posted an increase of 2.5 per cent or S$237 to S$9,689.

Category E, the open category which can be used to register any type of motor vehicle except for motorcycles, was up 1.8 per cent or S$2,300 at S$130,000.

Shocking all over

Demand for commercial vehicle COEs has intensified on two factors: rising diesel prices and government incentives for EHVs.

As reported in The Business Times, registrations of such vehicles for the first two months of the year have increased tenfold, year on year.

New incentives for EHVs under HVZES began in January, with S$40,000 per vehicle and up to S$30,000 per accompanying charger.

Diesel prices have skyrocketed as a result of curtailed crude oil supply because of the Iran conflict. Across major retailers, the price per litre has risen to S$4.32 to S$4.48, from S$2.57 to S$2.66 in February before the conflict began.

Ryan Woon, CEO of EcoSwift, the agent for Sany commercial vehicles: “This high level of premiums was expected – with the beginning of the S$40,000 incentive for EHVs, it was bound to happen.”

“Diesel prices have risen sharply and are now even higher than some premium petrol grades,” said Wearnes’ Tu.

“Naturally, businesses are exploring more cost-efficient alternatives, with many shifting towards EVs across both light and heavy commercial segments.”

One reason for high demand is that commercial fleets typically change multiple vehicles at a time and require delivery on tight timelines, unlike passenger car owners.

“Companies need to keep their businesses running efficiently, so vehicle delivery timelines remain critical,” she added.

“We have also seen Category C COE premiums trend upwards since February, reflecting steady and growing demand from the commercial sector.”

Edging towards records?

For passenger car COEs, some industry observers had expected Category A to increase in sales from the major automotive show called The Car Expo, which took place from May 9 to 11.

Victor Kwan, associate professor at the Singapore University of Social Sciences, said: “I think we saw some sensible bidding in Category A, especially with more orders from The Car Expo going into the system.”

He noted that such high Category A premiums – close to the segment’s all-time high of S$128,105 – could be thinning dealer margins and encouraging them to bid more conservatively.

LTA said that for car categories, “COE prices have remained elevated, likely due to seasonal demand arising from the recent Car Expo”.

Close Category A and B premiums in recent rounds likely contributed to the latter’s increase this time.

Ng Lee Kwang, the managing director of Octagon Motors Group, said that car buyers may have opted for Category B models at The Car Expo, with the increase in demand reflected by the increase in premium for that category.

“The difference between (categories) A and B has been very narrow – less than S$4,000 for the past few rounds, so it makes sense to buy Category B for a smaller difference in price than usual,” he said.

Sng Khai Hing, executive director at Chery distributor Vertex Automobile, said: “With the car categories’ gap much closer than it has historically been, some buyers who might previously have gone straight to Category A cars are now considering Category B as well because the value proposition has shifted.”

But industry observers do not think that premiums will pull back soon.

“I think both car categories will stay high, especially when we move towards the second half of the year when dealers and carmakers have to hit targets for the year, or reduce inventory and improve balance sheets for year-end reporting,” said Prof Kwan.