Is it finally worth it to buy an electric car in Singapore?

The Singapore government once dismissed electric cars as a lifestyle purchase. But now that climate change is something that Singapore has started to pay attention to, some baby steps have been taken to make electric cars a bit more affordable.

With the number of electric vehicle charging points in Singapore looking set to double by 2030 and with the cost of petrol climbing even as we speak, is it time to consider switching to an electric car?

Let’s take a look at the cost of owning an electric car and see if it makes sense vs. a regular petrol car.

How much do electric cars cost these days?

Apart from the much-hyped-about Tesla, there are plenty of other electric car models available in Singapore.

Here are some of the models available at the moment and how much they cost. All prices taken from latest available price lists (as at March 2021) on SGCarMart.

If these prices look steep to you, you’re not dreaming. Electric cars still cost a premium compared to their petrol counterparts.

What rebates are available for electric cars?

Given that electric cars still cost considerably more than petrol cars at the moment, the government has recently introduced a couple of rebate schemes to shrink the price difference.

For a start, the Additional Registration Fee (ARF) floor will be lowered to $0, down from the usual $5,000, for electric cars and taxis registered from Jan 2022 to Dec 2023.

ARF is a tax that is charged based on a car’s Open Market Value (OMV) when the car is registered.

Those who buy fully electric cars can claim up to 45 per cent rebate on the ARF, capped at $20,000. This scheme is called the EV Early Adoption Incentive (EEAI) and it runs from now until  Dec 31, 2023.

Rebates can also be claimed through the Vehicle Emission Scheme (VES). Under the VES, you get $15,000 to $25,000 rebates for new cars, taxis, and imported used cars registered on Jan 1, 2021 onwards.

How much does it cost to charge an electric car?

So we’ve looked at the price tag of an electric car. But what about the ongoing cost of charging it — will it be expensive and/or a hassle?

Electric car charging stations usually charge by the kWh or by the hour. Shell is currently charging $0.55 per kWh. A typical electric car battery is about 60 kWh, so that’s $33 for a full charge.

Meanwhile, Greenlots charges $1.50 to $2 an hour. That’s harder to estimate since the time it takes to charge depends on the car model and speed of the charger — a full charge can take anywhere from 30 minutes to 8 hours.

How often you need to charge depends on your vehicle’s “charge range”, ie. how many km your vehicle can be driven on a full charge. The cost per km for electric cars is many times less than that of petrol-run cars. This DBS article estimates the cost of charging an entry-level electric car at $11 per week.

At the moment, charging an electric car is still a bit of a hassle as charging facilities are still quite limited — there are currently 1,600 points islandwide. Unless you live in landed property, you probably can’t just charge the car in front of your home.

What other costs are there?

Other than the cost of the vehicle, the upfront cost of an electric car is similar to that of a petrol-run car. You’ll have to factor in the following costs:

• Car insurance – In your first year, car insurance is likely to cost over $1,000.
• Road tax – Works out to about $800 a year for a 60kWh full electric car. However, road tax will be reduced for electric cars in the next 3 years.
• COE – Currently hovering around the $40,000 to $45,000 range and good for ten years if you are buying a brand new car.
• ARF – Paid when you register a vehicle. Usually >50 per cent of your car’s OMV for cars under 10 years old after offsetting with the PARF rebate that you receive when the car is eventually deregistered. Rebate of up to 45 per cent (capped at $20,000) possible.
• Vehicular Emissions Scheme rebate – Subtract $10,000 to $20,000 from your costs if you qualify for this.

Electric models tend to be significantly more expensive than petrol ones, but their running costs are cheaper. Other than the fact that electricity will cost you up to 6 times less than petrol, you’re also likely to pay lower maintenance costs —there’s no need to change oil, clean the valves and so on.

Can you get an electric car loan?

Financing an electric car works pretty much the same way as any other car purchase.

If you’re not paying for the car upfront, you can get a loan through the car dealer OR directly from a bank. As with all financial products, we urge you to compare loans on the market rather than going for the most convenient option (typically the car dealer’s in-house financing package).

As a benchmark, bank loans for cars hover around the 2.28 per cent p.a. mark.

ALSO READ: Singapore Budget 2021: Electric vehicles to go the extra mile with $30m support from govt

But you might want to wait till more options are available. DBS has just announced a new “green” car loan at 1.68 per cent p.a., available from Mar 1, 2021 to anyone buying a new or used electric car. Perhaps other financial institutions would follow suit.

Is it worthwhile to buy an electric car in 2021?

From a purely cost perspective, electric cars are still more expensive than regular cars, even taking into account what you save from using electricity rather than petrol.

Assuming you previously spent $2,000 a year on petrol and $500 a year on maintenance (ie. $25,000 over the duration of a 10-year COE), your cost savings would still pale in comparison with the premium you would pay for an electric model.

Also, unless you live in landed property or a condo where the residents have agreed to install charging facilities, charging the car is going to be more time consuming than pumping petrol. The 200 to 300km range of the typical electric car also makes it inconvenient for those who cover many kilometres a day, such as Grab drivers.

Given the high upfront costs and hassle of charging, electric cars are still very much a luxury item in Singapore. If you are cash-strapped and do not wish to sign up for an unduly onerous car loan, it’s far more practical to opt for a petrol car.

This article was first published in MoneySmart.