Higher rebates for purchase of cleaner cars from Jan 1 to Dec 31, 2022

Rebates on the purchase of cleaner cars will be increased by $5,000 from Jan 1 next year to Dec 31, 2022, under the Vehicular Emissions Scheme (VES).

Cleaner taxis will have their rebates increased by $7,500 in the same time period, under the programme aimed at nudging motorists towards more environmentally friendly models of private transport.

Under the carrot-and-stick model, surcharges for more pollutive vehicles will also be increased - by $5,000 for cars and $7,500 for taxis.

This will kick in on July 1 next year instead of the start of the year to allow time for the market to adjust, and will be in effect until Dec 31, 2022, the National Environment Agency (NEA) and Land Transport Authority (LTA) said in a joint statement yesterday.

The increased rebates and surcharges mean buyers of cleaner cars will be awarded with rebates of up to $25,000, up from the previous $20,000, while buyers of the most pollutive cars will be penalised by $25,000, also up from $20,000.

The VES was introduced in 2018 to reduce carbon emissions on Singapore's roads.

It categorises vehicles based on emissions across five pollutants, with each category's rebate or surcharge calibrated accordingly.

NEA and LTA said the scheme has been effective in encouraging the purchase of cleaner car models, with the number of new cars that qualify for the cleanest two bands increasing by 60 per cent between the third quarter of 2018 and the first quarter of this year.

The number of those in the most pollutive two bands have fallen by around 20 per cent in the same time period.

Singapore University of Social Sciences' associate professor of economics Walter Theseira said the VES rebates and surcharges could push motorists towards the adoption of cleaner cars in two ways.

As motor car dealers usually quote a price inclusive of all taxes and certificate of entitlement bidding, a portion of the discounts usually goes to car buyers, while another could go to the dealers.

This means that in addition to consumers getting a discount, the VES changes could also encourage car dealers to import cleaner models.

Cleaner cars include the Hyundai Kona Electric, Renault Zoe and Toyota Prius Plus, while more pollutive cars are those like the Mitsubishi Outlander 2.0 CVT, Mazda CX-5 2.5 AT and Porsche Cayenne E3.