MKT202: This will keep it on a par with tax for similar car models driven by combustion engines: Marketing Management Assignment, SUSS, Singapore

Question 1

This will keep it on a par with tax for similar car models driven by combustion engines.

From next year, the road taxes for mass-market electric cars will be lowered to be on a par with those similar car models powered by combustion engines, removing yet another hurdle to the adoption of these cleaner vehicles.

Speaking in Parliament yesterday, Transport Minister Ong Ye Kung noted that the road taxes for electric cars had already been lowered in January by as much as 40 percent. But the larger mass-market electric models still incur higher road taxes than their petrol-powered equivalents. To address this, Mr. Ong said that road taxes for e-cars in the 90-230kW power band will be adjusted further downwards.

To do so, the Land Transport Authority (LTA) – which takes over from the Energy Market Authority as a regulator of EV charging standards – will merge the current electric car road tax bands of 30-90kW and 90-230kW, and subject them to the current lower band formula. “That way, we bring down the road taxes of electric cars in the upper band,” Mr. Ong said, noting
that with the change, a Hyundai Kona Electric will see its annual road tax fall from about $1,400 to $1,100, and that of a Tesla Model 3 will drop from $2,300 to $1,500.

“This will make their road taxes comparable with internal combustion engine models with a similar look and feel,” he added, noting that Singapore will provide incentives for electric car buyers until their pre-tax costs are on a par with that for combustion engine cars – which experts reckon will happen by 2025.

While some observers have pointed out that the road tax for luxury EVs is also higher than for their combustion engine models, Mr. Ong said that these are “big luxurious cars… I prefer to leave them alone for now”.

To further sweeten the deal for mass-market buyers, the minister said the $5,000 minimum additional registration fee will be removed from next January. “Many mass-market electric car buyers still cannot benefit from the full rebate because there is a minimum payment of $5,000 for the additional registration fee,” he said, explaining why the “ARF floor” will be removed.

Mr. Ong also announced details of the 60,000 charging points that will be built by 2030. The majority will be normal or slow chargers, as these can be rolled out without extensive and costly changes to the power grid, he said. Some 40,000 chargers will be in public and Housing Board carparks, with the remaining 20,000 on private premises.