Extension Of Vehicular Emissions Scheme (VES) And EV Early Adoption Incentive (EEAI) To Support Vehicle Electrification

Source: Government of Singapore

• VES to be extended with adjustments to incentivise electric vehicles only
• Extension of EEAI until end 2026 at a revised cap of $7,500 and ceasing of EEAI thereafter

JOINT NEWS RELEASE BETWEEN NEA AND LTA

Singapore, 08 September 2025 – To support Singapore’s vision of 100% cleaner-energy vehicles by 2040 [1], the Land Transport Authority (LTA) and the National Environment Agency (NEA) will extend the Vehicular Emissions Scheme (VES) from 1 January 2026 to 31 December 2027, with revisions to its banding, rebates and surcharges. The Electric Vehicle (EV) Early Adoption Incentive (EEAI) will be extended until 31 December 2026 and be ceased from 1 January 2027.

2        The VES and EEAI have supported the adoption of cleaner energy vehicles, which has been on an upward trend over the past few years.  From January to August 2025, 80% of newly registered cars and taxis were cleaner energy models with about half being electric models. This is encouraging as EVs do not generate tailpipe emissions and are the cleanest vehicle option.

Extension of Vehicular Emissions Scheme (VES) with adjustments to incentivise electric vehicles only

3        NEA will continue to support the take-up of electric cars, including taxis, by extending the VES [2] for another two years from 1 January 2026 to 31 December 2027 with revised bands, rebates and surcharges. Only EVs will receive rebates. Hybrid vehicles will no longer receive rebates, while more pollutive vehicles will have higher surcharges. Vehicles currently in Band A2 will fall into the neutral band B under the revised VES banding structure, while vehicles currently in Bands B, C1 and C2 will fall into revised Bands C1, C2 and C3 respectively. There is no change to pollutant thresholds and there will be a shift in the banding structure (see Annex A).   

Table 1: VES Schedule and Adjustments to VES Bands from 1 January 2026 to 31 December 2027 (changes in red)

Note: There will be a 1.5x multiplier for taxis

Extension of EV Early Adoption Incentive (EEAI) until end 2026 with revised cap and ceasing of EEAI thereafter

4        As adoption of EVs increases and the upfront cost gap between electric and Internal Combustion Engine (ICE) cars and taxis narrows, LTA will extend the EEAI until 31 December 2026 and cease the incentive thereafter. Owners who register electric cars and taxis in 2026 will receive a rebate of 45% off the Additional Registration Fee (ARF) capped at $7,500, down from $15,000.

5        With the revised EEAI and VES, buyers will receive combined cost savings of up to $30,000 and $20,000 off the ARF for electric cars registered in 2026 and 2027, respectively. The $0 ARF floor for electric cars and taxis will also be maintained till 31 December 2027. The overall benefits will continue to be tapered as Singapore gets closer to 100% cleaner energy vehicles by 2040, in support of our national target to achieve net-zero emissions by 2050. Since 2021, more than 39,000 electric cars and taxis have benefitted from the VES rebates and/or EEAI.

6        We expect a short-term increase in COE prices. Potential car buyers are strongly encouraged to be prudent in bidding for COEs.

7        For more information on the EEAI or VES, please visit https://onemotoring.lta.gov.sg/content/onemotoring/home/buying/upfront-vehicle-costs/tax-structure.html.