Singapore's EV adoption tipped to run smoothly: report

The city’s population enjoys a GDP per capita of $89,559.

Singapore’s wealthy population, small fleet size and relatively long-term target should make its drive to phase out internal combustion-engined (ICE) vehicles by 2040 feasible, according to a Fitch Solutions report.

The city-state only has a fleet size of over 800,000 vehicles in 2019, which is not expected to expand as the government limited the growth of its fleet to only 0.25% per year. With this, there are fewer cars to replace with EVs than larger countries such as the UK.

Singapore's population also has a GDP per capita of $89,559.12 (US$63,015) in 2019, and replace their vehicles every five years on average, which could drive consumers to switch to EVs over the next two years as the next replacement cycle starts.

Lastly, there is an extension of the incentives to light commercial vehicles (LCVs), which many use to get around the high cost of passenger car certificates of entitlement (COEs). LCVs represent around 15% of the city’s total vehicle population.

With a more extensive set of incentives to promote the use of electric vehicles (EVs), the annual average growth in EV sales projected to be boosted to 28% in 2020-2029.

The annual sales volume of EV is projected to exceed 16,000 units annually by 2029. Although this will only represent a market share of 14.8%, expectations for more EV models and for the government to expand its incentives after the initial three year period would create further upside potential for EV sales in Singapore.

In the 2020 Budget, the government announced financial incentives to promote the uptake of electric vehicles (EVs). This includes an expansion of rebates for buying EVs, reduction in road tax for EVs and some hybrids and further deployment of public chargers.