SINGAPORE: Despite a war-driven surge in petrol prices globally, the rise has not driven buyers towards electric vehicles (EVs) – and the reason comes down to how Singaporeans think about car ownership.
Across Europe and Australia, EV sales and enquiries surged in March compared to February. But car dealers here say the same trend has not played out locally, pointing to a fundamental difference: in Singapore, where cars are among the most expensive in the world, fuel costs are a relatively minor part of what it costs to own a vehicle.
Mr Benjamin Loo, chief operating officer at CarTimes Group, said he has not observed any noticeable increase in demand for used EVs, nor a drop in interest for internal combustion engine (ICE) or hybrid vehicles.
“Buying a car is still a large commitment,” he said.
Avoiding rising fuel prices serves as “a good additional perk” for customers who have already chosen EVs, Mr Loo added, but it has not become a compelling reason for petrol car owners to switch.
He said factors such as early adoption incentives and recent changes to Preferential Additional Registration Fee (PARF) rebates – which determine how much owners receive when scrapping their cars – have had a far greater influence on purchasing decisions.
While EV sales have remained largely unaffected, motorists are still feeling the pinch.
According to motorist.sg, 95-octane petrol was about S$2.88 (US$2.23) per litre before Feb 27, when the US launched strikes on Iran. Prices rose sharply, peaking at S$3.47 per litre between Mar 18 and 23, before easing slightly to between S$3.40 and S$3.42 on Apr 1.
Mr Desmond Chan, editorial manager at car-listing platform SgCar Mart, said cars in Singapore are big-ticket purchases that are rarely made on impulse.
“New or used, you are probably looking at minimum S$14,000 to S$17,000 a year just on the price of the car itself,” he said. “So, fluctuations in fuel cost represent a much smaller percentage of cost relative to that … it may play a small part, but I certainly don't think it's the primary driver.”
The latest Certificate of Entitlement (COE) prices – the premium buyers must pay for the right to own a vehicle – stand at S$111,890 for smaller cars and S$115,568 for larger cars.
Depreciation has also become a sharper concern following revisions to PARF rebates in February, which reduced payouts for drivers who scrap their cars before their COE expires.
Mr Chan noted that in other countries, cars can cost less than S$20,000, making fuel prices a far more significant share of total ownership costs.
Traffic to EV listings on SgCarMart rose 15 to 20 per cent in March compared to February, Mr Chan said, but he attributed this to steady growth that has been building since the start of the year, not a sudden spike. He said the uptick is more likely linked to stricter emissions-based taxes introduced on Jan 1.
Mr Chris Sim, director of EV dealership EV Direct, said enquiries have picked up, though this has yet to translate into a meaningful rise in sales. Of the buyers he has spoken to, only one cited rising fuel prices as the primary motivation for purchasing an EV.
Still, he expects the early interest to eventually convert into stronger demand.
“We are seeing a start of this trend with people enquiring because of the rising fuel costs, but we are expecting that this will translate to more sales for EVs,” he said.
Even if fuel savings were more significant, drivers weighing up a switch to an EV face other obstacles, said Associate Professor Walter Theseira from the Singapore University of Social Sciences.
He noted that ICE drivers can cut fuel bills substantially by moving to a hybrid without making the full leap to an EV.
"Fuel bills can already be cut significantly if the buyer goes hybrid," he said.
EV running costs in Singapore are also "not dramatically better" than those of ICE vehicles, Assoc Prof Theseira said. Most drivers rely on commercial charging stations, which cost around S$0.09 to S$0.10 per km – roughly double the S$0.04 to S$0.05 per km that home or private charging costs.
On depreciation, he said buyers seeking to minimise losses should consider second-hand cars near the end of their COE cycle, since cars depreciate most steeply at the start of ownership.
But he pointed out that there are currently no reliable EVs nearing the end of their 10-year COE lifespan.
“Nobody would want to run a 2010-era EV, they are terribly inferior to 2020-era ones,” he said.
Older ICE cars therefore remain the more cost-efficient option for depreciation-conscious buyers.
For existing car owners, his advice is straightforward: hold on to what you have.
“It’s incredibly unlikely that you could save by changing from a highly depreciated old car to a new EV,” he said. “Your fuel savings will be wiped out by starting your depreciation clock from the high level.”
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Across Europe and Australia, EV sales and enquiries surged in March compared to February. But car dealers here say the same trend has not played out locally, pointing to a fundamental difference: in Singapore, where cars are among the most expensive in the world, fuel costs are a relatively minor part of what it costs to own a vehicle.
Mr Benjamin Loo, chief operating officer at CarTimes Group, said he has not observed any noticeable increase in demand for used EVs, nor a drop in interest for internal combustion engine (ICE) or hybrid vehicles.
“Buying a car is still a large commitment,” he said.
Avoiding rising fuel prices serves as “a good additional perk” for customers who have already chosen EVs, Mr Loo added, but it has not become a compelling reason for petrol car owners to switch.
He said factors such as early adoption incentives and recent changes to Preferential Additional Registration Fee (PARF) rebates – which determine how much owners receive when scrapping their cars – have had a far greater influence on purchasing decisions.
While EV sales have remained largely unaffected, motorists are still feeling the pinch.
According to motorist.sg, 95-octane petrol was about S$2.88 (US$2.23) per litre before Feb 27, when the US launched strikes on Iran. Prices rose sharply, peaking at S$3.47 per litre between Mar 18 and 23, before easing slightly to between S$3.40 and S$3.42 on Apr 1.
FUEL COSTS A SMALL FRACTION OF CAR OWNERSHIP
Mr Desmond Chan, editorial manager at car-listing platform SgCar Mart, said cars in Singapore are big-ticket purchases that are rarely made on impulse.
“New or used, you are probably looking at minimum S$14,000 to S$17,000 a year just on the price of the car itself,” he said. “So, fluctuations in fuel cost represent a much smaller percentage of cost relative to that … it may play a small part, but I certainly don't think it's the primary driver.”
The latest Certificate of Entitlement (COE) prices – the premium buyers must pay for the right to own a vehicle – stand at S$111,890 for smaller cars and S$115,568 for larger cars.
Depreciation has also become a sharper concern following revisions to PARF rebates in February, which reduced payouts for drivers who scrap their cars before their COE expires.
Mr Chan noted that in other countries, cars can cost less than S$20,000, making fuel prices a far more significant share of total ownership costs.
Traffic to EV listings on SgCarMart rose 15 to 20 per cent in March compared to February, Mr Chan said, but he attributed this to steady growth that has been building since the start of the year, not a sudden spike. He said the uptick is more likely linked to stricter emissions-based taxes introduced on Jan 1.
Mr Chris Sim, director of EV dealership EV Direct, said enquiries have picked up, though this has yet to translate into a meaningful rise in sales. Of the buyers he has spoken to, only one cited rising fuel prices as the primary motivation for purchasing an EV.
Still, he expects the early interest to eventually convert into stronger demand.
“We are seeing a start of this trend with people enquiring because of the rising fuel costs, but we are expecting that this will translate to more sales for EVs,” he said.
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OTHER FACTORS KEEP DRIVERS FROM SWITCHING
Even if fuel savings were more significant, drivers weighing up a switch to an EV face other obstacles, said Associate Professor Walter Theseira from the Singapore University of Social Sciences.
He noted that ICE drivers can cut fuel bills substantially by moving to a hybrid without making the full leap to an EV.
"Fuel bills can already be cut significantly if the buyer goes hybrid," he said.
EV running costs in Singapore are also "not dramatically better" than those of ICE vehicles, Assoc Prof Theseira said. Most drivers rely on commercial charging stations, which cost around S$0.09 to S$0.10 per km – roughly double the S$0.04 to S$0.05 per km that home or private charging costs.
On depreciation, he said buyers seeking to minimise losses should consider second-hand cars near the end of their COE cycle, since cars depreciate most steeply at the start of ownership.
But he pointed out that there are currently no reliable EVs nearing the end of their 10-year COE lifespan.
“Nobody would want to run a 2010-era EV, they are terribly inferior to 2020-era ones,” he said.
Older ICE cars therefore remain the more cost-efficient option for depreciation-conscious buyers.
For existing car owners, his advice is straightforward: hold on to what you have.
“It’s incredibly unlikely that you could save by changing from a highly depreciated old car to a new EV,” he said. “Your fuel savings will be wiped out by starting your depreciation clock from the high level.”
Continue reading...