Key Concepts:
- Electric Vehicles (EVs)
- Early Adopter Incentives (Rebates)
- Certificate of Entitlement (COE)
- EV Early Adoption Incentive Scheme
- Enhanced Vehicular Emission Scheme
- Car Registrations
- Deregistrations
- Sales Targets
Increased EV Demand Before Incentive Expiration:
With the EV early adoption incentive scheme and the enhanced vehicular emission scheme scheduled to expire at the end of December, there's a noticeable surge in demand for electric vehicles. Some car distributors report a 15% increase in buyers looking to purchase EVs. Distributors are proactively ordering more stock to meet this increased demand before the incentives end.
Impact of Incentive Removal on Demand and COE:
Distributors anticipate a drop in demand after the incentives (up to $40,000 in rebates) are removed. However, they believe the decrease won't be as significant as the rebate amount. Industry experts suggest that the rush for EVs is contributing to the recent spike in COE premiums, which have reached some of their highest levels in years. Category A COE, in particular, rose to over $14,000 in the most recent bidding exercise.
COE Category A and EV Horsepower Reduction:
The video mentions that EV manufacturers can reduce the horsepower of their vehicles to meet the requirements for Category A COE. This contributes to the increasing demand for Category A COEs.
Concerns About Profit Margins:
EV distributors are concerned that their profit margins will be squeezed if the incentives are discontinued and COE premiums remain high, leading to a more competitive market.
Projected COE Premium Trends:
Analysts predict that COE premiums are likely to remain elevated due to a significant increase in car deregistration. Over 87,000 Category A and B cars are projected to be deregistered next year, a substantial increase from approximately 57,000 this year.
Factors Contributing to High COE Premiums:
The last quarter of the year typically sees a push to meet sales targets and registrations. Additionally, a growing number of cars are reaching the 10-year mark and are due for scrapping or replacement, further fueling demand and impacting COE premiums.
EV Registration Statistics:
EVs accounted for 41% of new car registrations in the first half of 2025, representing a more than 63% increase compared to the same period in the previous year.
Potential Impact of Incentive Removal on EV Market Share:
The surge in EV registrations could be short-lived if the incentives are discontinued. Buyers may seek more value for money in other types of vehicles due to the high COE premiums.
Conclusion:
The impending expiration of EV incentives is driving a surge in demand, impacting COE premiums and potentially creating challenges for EV distributors in the future. While EV adoption has seen significant growth, its sustainability hinges on factors like COE trends and the availability of alternative incentives or cost reductions.
AI summaries can miss context or contain errors. Check important details against the original video.