COE Category Review 2026: What Changes Mean for You

Singapore's COE category system has remained broadly unchanged since 1999, when the current five-category structure was introduced. But on 4 March 2026, Acting Minister for Transport Jeffrey Siow announced a formal review of the COE category structure during a parliamentary debate on his ministry's budget. The trigger was clear: Category A and Category B premiums had converged to the point where the distinction between "small car" and "large car" COE was becoming meaningless. The review is gathering views from motorists and the industry, with conclusions expected by end of 2026. This article analyses the current system's limitations, the proposals under discussion, and the potential impact of different restructuring scenarios.

The Current Category System

For context, here is how the five categories currently operate:

Category	Vehicles	Classification Basis
A	Cars up to 1,600cc or 97kW (and EVs equivalent)	Engine capacity / power
B	Cars above 1,600cc or 97kW (and EVs equivalent)	Engine capacity / power
C	Goods vehicles and buses	Vehicle type
D	Motorcycles	Vehicle type
E	Open (any vehicle type)	Universal

Learn more about each category in our COE categories explainer.

Why a Review Is Needed

The current system was designed for a world of internal combustion engines, where engine capacity was a reasonable proxy for vehicle size, price, and emissions. The EV revolution has disrupted these assumptions in two fundamental ways.

First, the price convergence that triggered the review: in the April 2026 Round 1 bidding exercise, Category A closed at $118,000 and Category B at $121,000 — a gap of just $3,000. When the premium for a "small car" COE is virtually identical to a "large car" COE, the category distinction loses its practical significance. Buyers of affordable hatchbacks are paying essentially the same COE as buyers of luxury SUVs. Track this convergence on our COE trends charts.

Second, the EV classification mismatch: an electric vehicle with a 150kW motor may be a compact, affordable family car, but the power-to-cc conversion formula places it in Category B alongside large luxury vehicles. This means affordable EVs face Category B premiums, while large hybrid SUVs with small engines can squeeze into Category A.

Proposals Under Discussion

Option 1: Dedicated EV Category

The most frequently discussed proposal is creating a sixth category specifically for battery-electric vehicles. Under this model, all BEVs would bid in a separate pool with its own quota, removing them from competition with ICE vehicles in Categories A and B. The quota would be set based on policy goals for EV adoption, potentially at a level that makes EV COE premiums lower than ICE premiums to incentivise adoption.

Option 2: Power-Based Categories for All

Another proposal would restructure categories based on vehicle power output rather than engine capacity, applying equally to ICE and electric vehicles. This would create a more level playing field but would not address the policy goal of incentivising EV adoption specifically.

Option 3: OMV-Based Categories

A third proposal would classify vehicles by Open Market Value rather than powertrain characteristics. This would group affordable vehicles together regardless of engine type, effectively making the COE system more progressive — cheaper cars compete in one pool, expensive cars in another. However, this could create perverse incentives if manufacturers manipulate OMV declarations.

Impact Analysis: Scenario Modelling

We modelled the potential premium impact of Option 1 (dedicated EV category) using current demand data and estimated quota allocations:

Category	Current Premium	Estimated Premium (Post-EV Category)	Change
Cat A (ICE only)	$118,000	$100,000-$110,000	−7% to −15%
Cat B (ICE only)	$121,000	$95,000-$108,000	−11% to −21%
Cat EV (new)	N/A	$60,000-$90,000	Depends on quota

The key insight is that removing EV demand from Categories A and B would significantly relieve pressure, particularly in Category B where EVs currently represent roughly 25% of demand. With the current near-parity between Cat A ($118,000) and Cat B ($121,000), even a modest reduction in Cat B demand could restore a meaningful price gap and make the category system functional again. However, the EV category premium would depend critically on the quota allocation — too few certificates would create expensive EV COEs, undermining the adoption incentive; too many would collapse premiums below the policy-desired level. See the latest data on our April 2026 Round 1 analysis.

Timeline and What to Watch

Acting Minister Siow has indicated that the review aims to conclude by end of 2026, and any changes would come with a transition period of at least six months between announcement and implementation. This means the earliest implementation would be mid-2027. Buyers making purchasing decisions now should not bank on a restructuring happening imminently, but those planning 12-18 months ahead should factor in the possibility.

Frequently Asked Questions

Will a COE category restructuring lower premiums?

It depends on the details. Creating an EV category would likely lower ICE premiums in Categories A and B by removing EV demand, but the magnitude depends on the quota allocation. Total demand across the system would remain the same, so the relief in one category comes at the expense of creating a new competitive pool elsewhere.

Should I wait to buy until after the restructuring?

We advise against waiting specifically for the restructuring, as the timeline is uncertain and the outcome may not match expectations. If you need a vehicle in the near term, make your decision based on current conditions. If your purchase is genuinely flexible, monitoring the review's progress is prudent.

How would existing COE holders be affected?

Any restructuring would almost certainly apply only to new COE bidding exercises. Existing COE holders would retain their certificates under the current system. There is no precedent in Singapore for retroactively changing the terms of issued COEs.