Why You Should Buy an EV in 2024

Tourists may buy T-shirts saying Singapore is a “FINE” city as a joke, but the Singapore government takes it very seriously to maintain Singapore as the fine ‘Garden City’ it is by actively striding towards becoming increasingly eco-friendly.

We’re such a tiny, tiny speck of a red dot on the global map, yet the carbon emissions levels from our population of more than 6 million are simply astounding.

Image

In this article, we’ll consider:

• the costs involved for us drivers to play our part in supporting a more sustainable Singapore by transitioning to an electric vehicle (EV),
• the government rebates that will make the transition easier on the pocket,
• and why early adoption is key.

The Need for Electric Vehicles

Transport is Singapore’s third-largest emissions contributor, and it’s headed for some drastic change.

With the Singapore Green Plan 2030, the government hopes that 90% of Singaporeans will travel via green public transport to and from work. To make that possible, the Land Transport Authority (LTA) is committed to have all public bus fleets run on cleaner energy by 2040.

If having a personal vehicle meets your lifestyle and functional needs better, then it’s going to have to be an electric one.

The Ministry of Transport (MOT) says that driving an electric vehicle more than halves our carbon footprint, showing just how much positive change we could make “together as one” if everyone in Singapore opted for eco-friendlier transportation.

Are Electric Vehicles More Expensive?

So, knowing all this, you want to do your part and swap out your current petrol car for an eco-friendlier EV. But how much money are we talking about? Are EVs unaffordable for most Singaporeans?

There may be some truth to EVs being more expensive than petrol cars, as the Open Market Value (OMV) of most high-power EVs can be quite high. And, just like any other car in Singapore, EVs are also subject to COE, and a whole bunch of other fees, duties and taxes.

Still, there are probably EV models available in Singapore that fit your personal budget. Instead of thinking Tesla all the way, there are more affordable EV options, such as from Chinese carmaker BYD. BYD’s E6, for example, has an OMV of just under $27k.

Popular staples like a Toyota Corolla, Altis, or Prius, or a Hyundai Avante also sport a similar baseline price tag — proving that you don’t necessarily have to pay a huge premium to own an electric vehicle.

While BYD currently accounts for more than 40% of newly registered EVs in Singapore, they are not the only affordable option. Volvo’s EX30 comes in at an OMV under $35k, while Hyundai’s Ioniq and Kona range between $34-38k. (Compare current OMVs at LTA’s OneMotoring)

Other Chinese EV brands like Xpeng and Zeekr are also set to hit the market this year. With more vehicle manufacturers ramping up EV production, we can expect an even wider variety of EV options at different price classes in Singapore soon.

Take Advantage of Government Support for EVs
(New Rebate Caps!)
 

If more car brands are looking to introduce new EV models over the next few years, wouldn’t it make more sense to adopt a wait and see attitude? Why is it a good time to purchase an EV now?

To put it simply into two words all Singaporeans love to hear: SAVE MONEY!

The government has been incentivising drivers to transition to EVs by offering extremely attractive rebates. But it’s unsure how long these rebates are still going to be extended.
 

Image

Part of the Singapore Green Plan 2030 targets:

If petrol cars are going to be completely phased out for good, then it means you have less than 6 years to make the switch if you intend to buy a new car. Sure, you could opt for a hybrid, but the lowering of rebate caps even for hybrid cars is certainly lighting a fire under drivers to transition to full EVs sooner, rather than later.
Buying an EV now still means saving up to $40,000 off in VES and EEAI rebates, and with the minimum ARF waived, you could even pay no ARF at all! (See usual ARF Rate structure here)
Meanwhile, to “wait and see” may mean waiting and seeing the rebates cut even further, or even no longer being extended.

The Real Costs of Buying an EV

Of course, talking about buying a new car is easy, but how much money are we actually talking about? Is it actually affordable to switch to an EV? How do the government rebates help? Let’s look at two examples of EV price tags below. (Note that this is only a simulation.)

Running Costs of an EV

As every driver knows, calculating the costs of car ownership is never just about the initial purchase cost, but also the running costs. So are there long-term upsides to owning an EV over a petrol vehicle?
 

Road Tax

This really depends on your EV model, since road tax is calculated based on your EV’s power rating (PR, in kW). Usually, an EV with a power rating of 90-230kW will pay more road tax than an EV in the PR 30-90kW class.

However, to further incentivise EV adoption, LTA revised the road tax framework in 2022, such that all fully electric vehicles with PR 30-230kW will pay the same amount of road tax — which offers up to 34% savings. For now.

Additional Flat Component (AFC)

The price of petrol that you pay when fueling up includes fuel excise duties. But since EVs don’t require petrol, an alternative tax structure was needed. Ideally, this would be a usage-based tax, but the technology to do this is still several years away.

For now, the government has imposed a “lump-sum tax” built into the road tax. This is the AFC, which is payable as part of road tax at each renewal. The current AFC stands at $700, a steep increase from $200 in 2021.

Car Insurance

EV-specific car insurance is still limited in Singapore, though many insurance providers can offer third-party liability and accident coverage.

Of course, your insurance premium will always depend on factors such as make and model, age, driving experience, No Claim Discount (NCD), whether you use your EV to commute to and from work, and in the course of your work.

Note, also, that most EV car insurance does not cover battery failure, so this is something that you will have to check with your car manufacturer about.

One good thing that DirectAsia car insurance offers is a panel of approved workshops that can not only repair your EV but also offer you a Lifetime Repair Guarantee on the repaired parts.  

Maintenance Costs

Maintaining an EV is usually cheaper and less frequently required, thanks to fewer moving parts and the absence of internal combustion engines (ICE) and complex transmissions.

Here’s an overview of maintenance required for an ICE car vs EV:

Charging

This is the part to pay attention to, and why it makes both sense and cents to switch to EVs.

The cost of electricity per watt vs petrol per litre is simply much lower.

For example: (Note this is just a simulation)

Source: LTA’s Fuel Cost Calculator

That’s a saving of $2,624 each year.

Even if you charge your EV twice a week — and even if you use fast chargers (DC) which cost slightly more than slow chargers (AC) — you’ll still be paying less than it would cost you to fill up a full tank right now.

The introduction of mobile EV charging providers also increases the convenience factor, while EV charging infrastructure is still being beefed up.

Tip: Check out our list of super fast chargers available around Singapore
For real-time availability, check the MyTransport.SG and PlugShare mobile apps.

Did You Know? EVs are Better for Start-Stop Driving  

Driving in a country like Singapore, with our peak-hour traffic jams and 2,500 traffic lights everywhere, means lots of start-stop driving. How do EVs perform in this kind of environment vs ICE cars?

Save More Money with Early Adoption

Here’s one final reason why you should switch to EVs now instead of later:

Rising COE prices.

If you think current COE prices are already insane, analysts are predicting that COE premiums will “go higher for longer,” driven by growing EV demand.

Anthony Teo, Managing Director of Vantage Automotive, which carries BYD, Ford and Peugeot cars, explains to CNA how this demand will kick in. “Once the early adopters have put (electric) cars on the road, more Singaporeans sitting on the fence will start to be interested in them,” he says, likening it to “the longest queue in the hawker centre syndrome.”

He added that as consumers look for more “bang for their buck,” that there will be a “serious migration” from established Japanese brands to Chinese EV brands.

The LTA has also revised the Maximum Power Output threshold for EVs from 97kW to 110kW to allow more EVs to come under Category A. This means that as more drivers transition to EVs, the surge of bidders will cause an even higher Category A COE premium.

In other words, you can wait and see before jumping on the EV bandwagon, but the longer you wait, the more likely it’ll be that increasing EV demand will keep COE prices soaring.

Conclusion

The government is doing all it can to promote the transition away from petrol-powered cars and towards fully electric vehicles, even over hybrid cars. The rebates offered as incentives to make the switch are slowly decreasing with time, a clear indication of rewarding early adopters.

Currently, almost 30% of all new car registrations are EVs. As the EV charging infrastructure across the island becomes more robust, more car owners will feel more supported to make the switch.

What about you? When are you going to make the switch to an electric vehicle? ;)