From 2013, some radical changes will be taking place in Singapore’s highly-regulated automotive scene.
A new Carbon Emissions-based Vehicle Scheme (CEVS) will take effect from 1 January 2013, which is a rebate or surcharge that would be levied on a car depending on its CO2 emissions. According to government studies, most cars sold in Singapore will fall in the ‘neutral’ band of 161-210 CO2 g/km, where neither a rebate nor surcharge will be implemented. This appears to be a step in the right direction, penalising cars that emit more carbon emissions while rewarding cars that are less polluting.
However there is one step back in the current system that still remains. It does not detract from the fact that Singapore’s archaic road tax levy, which is based on the displacement of a car, is still in force and would negate the green efforts of say, a Lexus GS450h Hybrid (141g/km) or a BMW ActiveHybrid 5 (149g/km) just because they use bigger engines. Although hybrids have a dedicated taxation scheme that takes into account the power output of the electric motor, it is a moot point because it will never be cheaper than the conventional taxation scheme.
With bigger engines now not necessarily being the most polluting, reward should also be extended for such cars which have made a tangible effort to reduce their emissions. One only needs to look at the 2012 SL63 AMG’s new 5.5-litre bi-turbo engine with 537bhp and only 231g/km of CO2 emissions for an example of the immense progress made in this segment (The R230 SL63 AMG struggled with 330g/km). For comparison, the more ubiquitous 2012 Lexus GS350 emits 237g/km, more than the SL63 AMG. Continuing to penalise this segment might signal to manufacturers that it is just not worth their effort to make their most pollutive cars cleaner.
And to make it all cumbersome and complicated to calculate, the formulas issued for road tax calculation look like something that is just out to confuse. Not to mention that they seem totally manipulated as if it was an exact science. For example, the formula for calculating the road tax for a car whose displacement is above 3,000cc is [S$1,525 + S$1(Engine Capacity -3,000)] x 0.782. Looks like the authorities expect us to be arithmetically sound as well.
The other breakthrough that will also take effect in January 2013 is the reduction in the Special Diesel Tax for cars meeting Euro V emission standards. It will drop from S$1.25 per cc currently to S$0.40 per cc, which makes a diesel car much more affordable than ever before. Championed by motor journalists, industry leaders and suppliers in Singapore for countless years, diesel cars may finally be embraced by the public with no penalty when compared to petrol cars. A pity, then, that such a development comes at a time when Certificate of Entitlement (COE) premiums (read more about COE here) are breaching S$100,000 (US$79,400).
It would nevertheless be an interesting year for Singapore’s automotive industry, one where the government finally puts weight behind its words to be environmentally-conscious and to stay relevant.