Mainstream car COE premium blitzes to new S$128,105 record as EVs continue to jolt demand
Intense competition, popular electric vehicle models and a three-week break contribute to a 7.6% jump in the Category A premium
[SINGAPORE] The Certificate of Entitlement (COE) premium for mainstream cars continued its record-breaking run to reach a new high in October’s first round of bidding.
All categories, except the open category, also posted increases.
In a statement to the media on Oct 8 (Wednesday), a Land Transport Authority spokesperson attributed the higher premiums “in part” to the latest bidding round being a three-week exercise, and to the car roadshow that took place in end-September.
“More broadly, the lower costs of EVs (electric vehicles), especially from China, as well as the reduction of incentives for cleaner-energy vehicles, have also added to demand. We advise car buyers to be prudent in bidding for COEs,” the spokesperson added.
Industry observers The Business Times spoke to added that the spike was a continuation of a trend that began in September, where EV demand has increased as buyers rush to secure cars before the reduction of EV incentives in 2026.
The premium for Category A rose by 7.6 per cent or S$9,102 to S$128,105. This marks a new all-time high for the category, which applies to mainstream cars with engines of up to 1,600 cc in capacity or with up to 97 kW of power, and for EVs with up to 110 kW of power.
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Category A has been on a record-breaking run in recent weeks. Records were also set in September; the premium of S$107,889 in last month’s first round and S$119,003 in the second were all-time highs at the time.
Driving the streak is increased demand for EVs – with many popular models falling under Category A – as buyers rush to secure cars before the reduction of EV incentives begins in 2026.
The premium for Category B rose 3 per cent or S$4,110 to S$141,000. The category applies to cars with engines of more than 1,600 cc in capacity or with more than 97 kW of power, and for EVs with more than 110 kW of power.
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Prior to this round of bidding, Category B had not seen premiums above S$140,000 since the second half of 2023, when the current record high of S$150,001 was set.
Category E, the open category which can be used to register any type of motor vehicle except for motorcycles, was the only category with premiums dipping in this round, falling 0.4 per cent or S$493 to S$140,009.
Category C, applicable to commercial vehicles and buses, was up 2.5 per cent or S$1,800 at S$74,301.
Category D, used for motorcycles, increased 6.5 per cent or S$601 to S$9,810.
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Commenting on the rise in Category A, industry observers noted that existing demand for popular EVs in the category has been amplified by the impending reduction of EV incentives in 2026.
The government announced on Sep 8 that the combined maximum incentives for EVs will be lowered to S$30,000 in 2026, from S$40,000 currently. A further reduction to S$20,000 will take effect in 2027.
Walter Theseira, associate professor of economics at the Singapore University of Social Sciences (SUSS), said: “We have a perfect storm of buyers rushing to beat the EV rebate drawdown, confusion about the EV rebate, Chinese EV dealers competing for market share with pressure to produce results, and a plethora of popular premium EV models in the category.”
Almost every major EV brand has a Category A model. For example, the best-selling models from EV market leaders BYD and Tesla – such as the BYD Atto 3, BYD Sealion 7, Tesla Model 3 and Tesla Model Y – are Category A versions.
Category A EV offerings from China or China-owned brands that have sold in significant quantities include the Omoda E5, MGS5, GAC Aion V, Volvo EX30 and XPeng G6.
The stream of models is not slowing down: In recent weeks, more new EV models have joined the category, with BYD introducing the Seal 6 sedan on Oct 1, and premium China brand Zeekr with the X sport utility vehicle on Sep 19.
Prof Theseira said consumer confusion about the rules could also be contributing to the current increase in demand.
“This buying frenzy is probably driven by the buyers feeling that they need to beat the EV drawdown,” he said. “I think there is some misunderstanding on how the EV rebate works, and in particular, a misconception that it will go away completely next year.”
Show time
Dealers could also be exacerbating the situation with misleading advertising or scare tactics, he added.
“As for car dealers, it is understandable that they would prefer to book a sale now, rather than tell customers to come back after December, especially since there is well-known excess capacity with Chinese EV makers who have staked their future on expansion overseas.”
Dealers said the three-week break between bidding rounds and a car show could also have contributed to a short-term increase in demand.
Some bidding rounds have three weeks between them instead of the usual two, as bidding starts only on the first and third Mondays of each month. Such three-week exercises typically mean dealers have collected more orders.
Anthony Teo, managing director of BYD distributor and dealer Vantage Automotive, said the spike was expected with the three-week interval between bidding rounds.
The Car Expo, a major automotive show organised by SPH Media, was held on Sep 27 and 28. While some brands reported slower sales compared to the iteration in May, EV-focused China brands had brisk sales thanks to aggressive promotions. BYD and rival GAC, for example, both offered S$10,000 COE rebates.
“The take-up for our promotions was encouraging,” said Teo, responding to queries from BT on sales at the show.
Despite the electric atmosphere driving EV sales now, observers emphasised that patience may be a wiser move than charging into the market now.
“COE supply will continue increasing over the next few years, so it is unlikely that rushing now will give you a better COE price than waiting,” said Prof Theseira.
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