Gov’t may consider an outright ban on fossil-fueled vehicle sales

The government said it will only cease new diesel car and taxi registrations.

The government was encouraged to implement a stricter approach to banning petrol or diesel-based vehicle sales to ramp up uptake of electric vehicle (EV) adoption in the market, professional services firm, KPMG, said.

This is due to Singapore’s “low base” of EV car registrations even as registrations of such EV vehicles doubled in the first five months of this year.

“Whilst the EV adoption rate in Singapore has doubled this year compared to last, uptake in the country is still substantially behind more advanced EV markets. Of the 645,150 cars on Singapore roads in 2021, only 2,942 were electric,” said KPMG.

Singapore already imposed tax incentives to consumers and grants to operators of EV infrastructure. The government also previously sought to end fresh diesel car and taxi registrations from 2025.

READ: Rising fuel costs amongst top reasons for EV adoption

Whilst these measures are productive in boosting EV adoption, KPMG advised the government to consider an outright ban on selling fossil-fueled vehicles in the market.

“Undoubtedly, an outright ban on petrol or diesel-based vehicle sales would shake up the market. Change management will need to be handled well – to create long-term benefits for the environment alongside new business opportunities for Singapore’s transport sector,” it added.

This implementation cannot be done overnight. Which is why KPMG said the outright ban can be done in a phased approach but must also offer relief measures for industry players who will be adversely affected by the ban.

“Successes locally could be scaled and repurposed for other key markets in the region that are currently experiencing high EV demand, especially for two-wheelers, enabling expansion of Singapore’s footprint in EVs,” KPMG said.

KPMG also stressed that EV adoption will be critical because not only will it accomplish climate goals but also fast track the nation's economy by creating jobs and income streams in the transport sector.