American electric car manufacturer Tesla has finally gotten the approval to sell its cars in Singapore once again, where the company had a false start before.
Back in 2019, Tesla founder Elon Musk slammed the Singapore government for being “unwelcome” to Tesla’s electric cars, in response to a tweet asking why the automaker’s vehicles were not available in the city-state.
Govt has been unwelcome
— Elon Musk (@elonmusk) January 3, 2019
Tesla first entered into the Singapore market in mid-2010, only to pull the plug on operations less than a year later after it failed to secure green tax breaks.
In 2016, a businessman Joe Nguyen imported a used Tesla Model S from Hong Kong – which had clocked about 1,000km before it was shipped – to Singapore and was slapped with a S$15,000 carbon surcharge by the Singapore Land Authority (LTA).
LTA stated that tests conducted by Vicom Emission Test Laboratory showed that the Model S had a power consumption of 444 watt-hour/km.
It added that the CO2 emission of 0.5g/watt-hour at power plants put the car’s emission at 222g/km. This puts it in the S$15,000 surcharge band in the Carbon Emissions-based Vehicle Scheme, instead of a tax break.
According to Tesla Motors, the Model S’s actual energy consumption was rated at a lower 181 watt-hour/km when it left the factory in 2014.
However, LTA contended that since the car was not new, there’s no way to know how much the condition might have deteriorated, resulting in it being low enough on the carbon emission scale to qualify for a surcharge.
LTA also emphasised that while the Model S doesn’t use petrol, it still requires charging via electricity and in Singapore, electricity is still generated using fossil fuels – so the car isn’t really carbon-free – which explains why the carbon surcharge is maintained for all vehicles.
Over in Britain, Model S buyers get a £4,500 (S$8,800) grant, while in the United States, they get a US$7,500 (S$10,400) income tax credit. In Norway, a Model S gets a tax exemption of around US$135,000, as reported by The Straits Times.
Minister Masagos indicates Tesla cars as “lifestyle”, not climate change
Following Elon Musk’s tweet in 2019, the then Minister for Environment and Water Resources Masagos Zulkifli retaliated by indicating Tesla cars as “lifestyle” rather than promoting climate change.
“What Elon Musk wants to produce is a lifestyle,” said Mr Masagos in an interview with Bloomberg on 21 August 2019.
“We are not interested in a lifestyle. We are interested in proper solutions that will address climate problems,” he added.
The Minister, who is now the Minister for Social and Family Development, also noted that electric cars were not the solution that the government was looking for.
Singapore would instead focus on enhancing mass transit options to ensure that any commuter’s journey within the country will take no longer than 45 minutes.
Even so, the country is not completely unreceptive to electric cars because Singapore is still positioned to transition to plug-ins.
“If there’s any country which can convert from petrol cars to 100 per cent EVs, it will be Singapore,” said Mr Masagos.
But he highlighted that it would be difficult to install adequate charging stations with 85 per cent of the population resides in high-density areas.
“Just choosing a parking spot is already problematic. And now you want to say who gets the charging point. We do not have the solution yet,” said Mr Masagos.
Govt subsequently introduces measures to facilitate adoption of electric cars in S’pore
Though Mr Masagos had branded Tesla’s cars as “lifestyle”, just a year later, the Singapore government announced that it aims to phase out Internal Combustion Engine (ICE) vehicles and introduced measures to facilitate the adoption of electric cars (EVs) in the country.
In his Budget 2020 speech last February, Deputy Prime Minister Heng Swee Keat acknowledged that the domestic transport sector contributes a significant amount of greenhouse gas emissions.
“Vehicles with internal combustion engines, or ICEs, also contribute to pollution, adversely affecting our health and quality of life,” he noted, adding that the government would set a long-term strategic goal for Singapore to have “all vehicles run on cleaner energy by 2040”.
Singapore has about 1,600 charging points island-wide at the time, but with the help of the private sector, the government aims to deploy up to 28,000 chargers at public carparks around the island.
Meanwhile, the LTA stated that EVs incur higher upfront ownership cost as compared to equivalent ICE vehicles, causing “a significant barrier” in the adoption of EVs in Singapore.
To tackle the ownership cost gap between EVs and ICEs in Singapore, the government would spend an estimated S$71 million for the next three years to encourage the adoption of EVs and launched an EV Early Adoption Incentive (EEAI) from January this year to 31 December 2030.
Under this scheme, owners who register fully electric cars will receive a rebate of 45 per cent off the Additional Registration Fees (ARF), capped at S$20,000.
“This EEAI will lower the upfront cost of an electric car by an average of 11 per cent and narrow the upfront cost gap between electric and ICE cars,” said the LTA.
The methodology for calculating the variable component of the road tax for EVs was also revised from January this year, which the government believes will lead to “an across-the-board reduction” in this variable component of road tax for EVs and some hybrids.
“To enhance parity with ICE vehicles until we are ready to impose a distance-based tax, we will impose an additional tax of S$700/year for fully electric cars, which is sized to partially recover for the fuel excise duties paid by equivalent ICE cars,” it added.
Tesla finally got the green light to launch in S’pore, after a rocky start
Tesla saw a comeback opportunity when the government announced the new measures to encourage the adoption of EVs in Singapore, and began to “actively recruiting” for five roles – mostly related to customer experience, vehicle repair and service – in July last year.
The automaker’s Singapore sales portal eventually gone live last week.
According to the site, Tesla Model 3 Performance, which is a high-powered version of the Model 3 and can hit 100kmh in 3.3 seconds, will be sold at an estimated price of just under S$155,000 before the Certificate of Entitlement (COE).
The less powerful Model 3 Standard Range, which hits 100kmh in 5.6 seconds, will retail for around S$113,000 before COE.
What’s more, the 377Kw Tesla Model 3 Performance and 239kW Model 3 Standard Range can now be searched on the LTA’s fuel cost calculator site.
It seems that both variants of the Tesla Model 3 were given the A1 Vehicular Emission Scheme (VES) Banding, which means that its buyer can receive a rebate of up to S$20,000 under the Electric Vehicle Early Adoption Incentive (EEAI) scheme.
Tesla’s electric cars launched with good timing too, given the Singapore government is allocating S$30 million over the next five years for initiatives related to EVs, like measures to increase the number of chargers at private premises.
In his Budget 2021 speech on Tuesday (16 Feb), Mr Heng noted that the minimum ARF for EVs will be lowered to zero from January next year to December 2023, giving another reason for Singaporeans to switch to EVs.
Currently, all car buyers have to pay at least S$5,000 in ARF, regardless of the tax rebate a car is entitled to.
He added that road taxes for EVs will also be revised, such that a mass-market electric car will have road tax comparable to an ICE equivalent.
“We aim to deploy 60,000 charging points at public car parks and private premises by 2030 – more ambitious than our previous target of 28,000,” said the Minister.
Singapore currently has 1,700 charging points while the population of electric cars on the road as of January last year is about 1,125.
Going back to Mr Masagos’s remarks that Tesla’s electric cars are a “lifestyle”, how would the Minister describe the automaker’s vehicles now that it has finally gotten the green light to launch its electric cars in Singapore and electric cars industry gaining support from the government?