SINGAPORE – The reduction in rebates for electric vehicles (EVs) from January 2026 is expected to nudge some buyers to purchase cars before that deadline, which in turn would drive up certificate of entitlement (COE) premiums, said motor dealers.
On Sept 8, the Land Transport Authority (LTA) and National Environment Agency announced that the combined rebates for the EV Early Adoption Incentive (EEAI) and Vehicular Emissions Scheme (VES)
will be reduced from $40,000 now to $30,000 in 2026.
From Jan 1, 2026, petrol hybrid cars will also no longer get the $2,500 rebates under the VES, which is meant to encourage drivers to switch to cleaner-energy vehicles.
Both the EEAI and VES were previously due to expire on Dec 31, 2025. The schemes provide rebates when a new car is registered to help offset the upfront cost.
In a joint statement, the authorities said: “We expect a short-term increase in COE prices. Potential car buyers are strongly encouraged to be prudent in bidding on COEs.”
Motor dealers said an increase in COE premiums in the remaining months of 2025 is expected, as some buyers are likely to rush in to get the higher rebates. This comes on top of the typical year-end push by dealers to hit their annual sales targets.
Some dealers predict that the COE premium for smaller cars in particular will come under even more pressure. The price for such COEs has already been rising strongly, driven by the popularity of EVs, mainly from Chinese brands.
At the first tender exercise of September, the COE premium for smaller cars hit a record $107,889.
Mr Vincent Ng, a business consultant for car distributorship Vincar Group, estimates that there are at least twice as many car owners in the market now compared with 2024 who are looking to replace their cars, which are nearing the end of the 10-year COE lifespan.
He said this large pool of buyers may feel the rush to get a new car now, rather than delay further and miss the higher incentives.
Mr Anthony Teo, managing director at Sime Motors, which distributes BYD in Singapore, said dealers will use the latest news to urge buyers to commit now.
Chinese EV brand BYD is the top-selling car brand in Singapore so far in 2025, edging out brands that sell both petrol and electric models such as BMW and Toyota.
When asked if consumers may be better off delaying their purchases to 2026, after the changes take effect and when supply is expected to rise further, Mr Teo said: “No one can guarantee that COE premiums will drop by $10,000 in the new year.”
He noted that COE premiums may remain high in the earlier part of 2026, with higher car sales during the Singapore Motorshow, which is usually held in January, and the lead-up to Chinese New Year.
In the immediate term, Mr Ng Choon Wee, commercial director of Hyundai distributor Komoco Motors, said his company will be trying to sell as many of its cars as it can in the remaining months of 2025.
Besides losing the $2,500 rebate in the new year for Hyundai’s smaller hybrid family car in 2026, the brand’s larger sport utility vehicle hybrid models will incur a $7,500 surcharge, up from not paying any surcharge currently.
Mr Ng said that regardless of the changes in the incentives, competition in the market has been very stiff in 2025, stoked by the influx of new Chinese brands fighting for market share.
Ms Corinne Chua, managing director of Volvo at Wearnes Automotive, noted that when the COE premium for large cars hit $150,001 in 2023, it took an additional injection of COEs by the LTA in November that year to bring the price down. Premiums, however, rebounded slightly after that.
“Ultimately, yo-yo COE prices are bad for everyone,” she said.
Mr Nicholas Wong, chief executive of Honda agent Kah Motor, hopes that the COE supply for the November 2025 to January 2026 period will be sufficiently generous to cushion the impact of the high demand on COE prices.
LTA will announce the COE supply for the three-month period ending January 2026 in October.
