Slash of EV prices
Despite international direction gradually steering into “Greener” alternatives to transport, and the provision of various policies and tax rebates to encourage the switch, the EV industry has again taken a hit. The EV industry, as it exists today, consists of monster names such as Tesla, but also smaller companies that may or may not survive the inflationary pressures of the recession and supply chain crisis.
Bracing for a possible recession in 2023, Tesla has cut prices globally by 20% in late 2022 in various countries like the USA, Middle East, Africa, Europe and in Asia. Closer to home on 9 Jan 2023, Tesla offered a price discount for the purchase of existing inventory of the Model 3 or Model Y. It offered a price discount of $5000 for electric vehicle purchasers who trade in an existing internal combustion vehicle and another $5,000 credit against the cost of the certificate to operate a car in Singapore. Furthermore, for qualified buyers who have room for home installation, Tesla will provide the wall connector for charging, although the consumer has to pay for the cost of installation. A price war could have ensued as other EV companies may follow suit, in attempts to gain market share.
However, it is anyone’s guess as to how this year will turn out for the EV industry. Prices of Electric Vehicles plummeted in late 2022 at a rather astounding rate – signaling how the industry could have very little control over disruptive shocks in the macro market.
Why the Sudden Slashing?
Electrification of vehicles will be becoming an overwhelming reality, where in the near future, a huge proportion of vehicles will be replaced by EVs, and phasing out internal combustion engines may become a reality by 2040. Experts say it is to challenge rivals with its lowered prices in this recessionary market, causing some to be unfortunately weeded out of the competition. Beyond the name of Tesla, other smaller companies and legendary car models (Mercedes, Audi, BMW etc.) are trudging forward to make its impact in the EV transportation space, with Tesla taking the lead in the driver’s seat – at least for now.
Globally, Tesla’s international best selling models – Model 3 sedan and Model Y crossover SUV saw price cuts between 6% and 20%. This could then allow more car buyers to be priced into the market, sharpening Tesla’s competitive advantage, albeit perhaps narrowed profit margins.
How Reduced Prices of EVs could affect car rental customers in Singapore?
There seems to have been an exponential uptake in Electric Vehicles, having numbers doubled since 2020, to about 3000 cars in 2021. This is a clear sign of greater awareness and acceptance of electric vehicles in the country, though more has to be done to effectively transit to a full car-lite version of vehicles from what we have today.
While the selling price of EVs may be on the high end after including the COE and ARF, the government has rolled out several policies and rebates to help incentivise potential car buyers in adopting EVs, and naturally, with greater infrastructure of charging points, car rental companies are starting to be on board as well.
EV Policies in Singapore
Closer to home, with increasing numbers of EVs and Hybrids, Singapore’s Land Transport Authority has implemented a three prong approach to support the adoption of EVs, with the use of (1) Tax Incentives, (2) Regulation & Standards (3) EV Charger Deployment, in support of Singapore Green Plan 2030.
- EV Early Adoption Incentive (EEAI) – From 1 Jan’ 21 to 31 Dec’23: To reduce the price gap between combustion and EVs, EV buyers who register fully electric cars will receive a rebate of 45% the Additional Registration Fee (ARF), capped at $20,000.
- Enhanced Vehicular Emissions Scheme (VES) – From 1 Jan’ 21 to 31 Dec’ 25: Rebates for particular categories of vehicles increased by $5,000 for cars and $7,500 for taxis.
- Additional Registration Fee (ARF) Floor Reduction – From 1 Jan’ 22 to 31 Dec’ 23: ARF floor is lowered to $0 from $5,000 for fully electric vehicles, allowing buyers to enjoy combined EEAI and VES rebates of up to $45,000.
- Road tax framework revision for EVs – From 1 Jan’ 22: Road tax for full EVs and Petrol-EVs reduced up to 34% for cars in 90-230kW power rating bracket, ensuring that EVs pay similar road tax quantums compared to their petrol equivalents.
Regulations & Standards
Regulations are important to ensure that EVs are supported by a complete and rigorous system that protects the safety of drivers and passengers in EVs. This includes safety standards that EV manufacturers need to uphold, as well as charging equipment that is safe for use. Through detailed consultations with various experts from industries and academia, regulations are ensured to align to industry standards and guidelines.
EV Charging Development
With aims to deploy up to 30,000 charging stations across Singapore by 2030, Singapore will be in-building about 40,000 charging points in public and 20,000 in private spaces. These include having installed over 200 charging points in car parks in 2021, and launching the EV common charger grant in 2020, creating greater accessibility for EVs in the general public.
Price of EVs on Car Ownership & Car Rental Choices
As prices of EVs come down, it sparks a conversation as to whether buying or renting EVs become actually feasible and viable for car rental customers. With most car buyers on high alert in tracking the ebbs and flows of the EV price market, car rental customers continue to be piqued by curiosity about renting EVs as a platform to evaluate its technology and to have the EV experience. Hence, with growing interest and price movements of the EV market, it is definitely an avenue to keep close watch on, as consumers continue to evaluate their car rental and car ownership choices in an environment with growing EV interests.
Electric Vehicles for Car Rental Companies?
Here at BizLink Rent-a-Car Pte Ltd, we have yet to launch electric cars. However, not to your dismay, we offer a range of Hybrid and Mild-Hybrid cars kept and maintained at the best condition if customers are adamant on environmental saving. Should you wish to enquire more on our different categories of cars and rental packages, feel free to visit us at https://bizlinkrentacar.com.sg/ or contact our sales associates at +65 6285 6616.