EV COE: How Electric Vehicles Are Reshaping Category A

The Tipping Point Has Arrived

For years, electric vehicles in Singapore were a curiosity—expensive, impractical for HDB dwellers without home charging, and too niche to move the needle on COE demand. That era is over. As of early 2026, EVs account for 45.6% of all new Category A registrations and 40.2% of all new car registrations across every category. Nearly one in every two new cars registered in Cat A runs on a battery, not a petrol tank.

This is not a gradual trend. It is a structural break that is reshaping the COE market in ways that affect every buyer—including those who have no intention of going electric. Here is what is happening, why it matters, and what it means for the road ahead.

Why Most EVs Land in Cat A

Singapore's COE system classifies vehicles by engine capacity (for ICE cars) or power output (for electric vehicles). The Category A threshold is 1,600cc or 97kW (130bhp), whichever applies. Most affordable electric vehicles—the models driving mass adoption—are engineered to fit within this power envelope:

• BYD Atto 3: the best-selling EV in Singapore, positioned as a compact electric crossover with a power output tuned to stay within Cat A limits
• MG4: an affordable electric hatchback from the SAIC-owned British brand, priced aggressively for the Singapore market
• Tesla Model 3 Standard Range: the entry-level Tesla, whose rear-motor configuration keeps it in Cat A territory
• Various Chinese brands: Chery, Neta, BYD Dolphin, and others have entered with Cat A-compliant power ratings

Only higher-performance EVs cross into Cat B: the Tesla Model 3 Long Range, BMW iX, Mercedes EQE, Porsche Taycan, and similar premium models. This creates an unusual market structure where budget-friendly electric crossovers compete directly with Toyota Vios sedans for the same pool of Cat A certificates.

The BYD Factor

No discussion of EVs in Singapore is complete without addressing BYD's dominance. The Chinese automaker has become the single largest seller of new cars in the Cat A segment, displacing Toyota from a position it held for decades. BYD's strategy combines several advantages that are difficult for competitors to match:

• Vertical integration: BYD manufactures its own batteries, chips, and most major components, giving it cost control that rivals cannot match
• Aggressive pricing: BYD models in Singapore are priced at or below comparable ICE vehicles before accounting for EV incentives, eliminating the traditional "green premium"
• Product range: from the entry-level Dolphin to the Atto 3 crossover and the Seal sedan, BYD covers the full spectrum of Cat A demand
• Charging partnerships: BYD has invested in charging networks across Singapore, easing one of the primary adoption barriers for HDB residents

The effect on the Cat A market has been transformative. BYD alone accounts for a significant share of all Cat A bids in recent exercises. When a single brand can generate that volume of demand, it changes the competitive dynamics of the entire category.

The Power-Tuning Feedback Loop

Manufacturers have responded to the EV influx by doubling down on a strategy that predates electric cars: tuning their ICE vehicles to qualify for Cat A. As more EVs crowd the category and premiums converge with Cat B, the incentive for manufacturers to keep their models in Cat A has intensified.

A vehicle that naturally produces 140bhp might be software-limited to 128bhp for the Singapore market, squeezing under the 130bhp Cat A ceiling. The car drives almost identically—the difference in real-world performance is negligible—but the COE savings and quota access make it a far more attractive proposition.

This creates a feedback loop. More vehicles (both EV and tuned-ICE) qualifying for Cat A means more bidders for Cat A certificates, which pushes Cat A premiums higher, which narrows the gap to Cat B, which incentivises even more manufacturers to tune for Cat A. The loop is self-reinforcing, and it explains why the Cat A/B convergence appears to be structural rather than cyclical.

Impact on COE Premiums

The data is unambiguous. Since EV registrations crossed 20% of Cat A volume in early 2024, Cat A premiums have not dipped below $95,000. In March 2026, Cat A closed at $111,890—just $3,678 below Cat B's $115,568. Track the full price history on our trends page.

The EV effect operates through pure supply-and-demand mechanics. The number of Cat A certificates available each quarter is determined by LTA's quota formula, which is based on vehicle deregistrations and population growth projections. This quota does not adjust for the composition of demand—it does not care whether bidders want EVs or ICE cars. When EVs add a large new cohort of buyers to a fixed pool of certificates, the price rises.

Some analysts have estimated that EV demand has added $10,000–$20,000 to Cat A premiums compared to a hypothetical scenario without the EV wave. This is difficult to prove definitively, but the timing correlation is strong and the directional logic is sound.

What This Means for ICE Buyers in Cat A

If you are shopping for a traditional petrol car in Cat A—a Toyota Corolla Altis, Honda Fit, Hyundai Avante, or Mazda 3—the EV wave has made your purchase materially more expensive. You are now competing against a much larger pool of bidders, many of whom are willing to pay elevated premiums because EV running costs offset the higher COE.

Consider the arithmetic from a BYD Atto 3 buyer's perspective. They save approximately $1,350 per year in fuel costs compared to petrol (electricity at $0.03/km vs petrol at $0.12/km, at 15,000 km/year). Over 10 years, that is $13,500 in fuel savings alone, plus additional savings on maintenance (no oil changes, reduced brake wear from regenerative braking). An EV buyer can rationally bid $10,000–$15,000 more for a COE and still come out ahead on total cost of ownership.

This means ICE buyers in Cat A are competing against bidders with structurally lower running costs and therefore higher willingness to pay for the certificate. It is an uneven playing field that will persist as long as EVs and ICE cars share the same COE category.

Government Policy Tension

Singapore's Green Plan 2030 explicitly targets EV adoption. The government offers the Enhanced Electric Vehicle Early Adoption Incentive (EEAI), which provides up to $30,000 in ARF rebates for qualifying EVs (reduced from $40,000 effective January 2026). Road tax concessions for EVs further improve the economics. While the rebate cut and the removal of some hybrid eligibility initially appeared to slow adoption, it instead triggered a wave of panic buying as buyers rushed to lock in vehicles before the new rates took full effect.

But the COE system creates a zero-sum game. Every additional EV buyer competing for a Cat A certificate pushes the premium higher for everyone—including lower-income buyers who need an affordable car and cannot afford or practically use an EV (particularly HDB residents without convenient charging).

This tension has not gone unnoticed. Industry groups, consumer advocates, and Members of Parliament have raised the issue. The concern is that EV-friendly policies are inadvertently making car ownership more expensive for the people least able to absorb the cost increase.

Potential policy responses that have been discussed publicly include:

• A dedicated EV category (Cat F): separate quota, separate bidding. This would relieve pressure on Cat A but could fragment the market and create new distortions
• Supplementary EV quota: adding extra certificates specifically for electric vehicle registrations, on top of existing Cat A quota. This preserves the category structure while expanding supply
• Adjusting the power threshold: raising Cat A's 130bhp limit to, say, 150bhp or 180bhp, pushing more EVs into Cat B and rebalancing demand. The risk is that it merely shifts the pressure to Cat B
• OMV-based categories: replacing engine-spec thresholds with price-based ones, which would more cleanly separate economy and premium vehicles regardless of powertrain

The LTA Category Review

In March 2026, LTA announced a formal review of the COE category structure—the first comprehensive reassessment since the categories were last adjusted. While the review's scope and timeline remain vague, the announcement itself signals that the government recognises the current framework is under strain.

Any structural change would have significant market implications. If a new EV category is created, Cat A premiums could drop substantially as a large chunk of demand is redirected. Conversely, the new EV category might see very high premiums if quotas are set conservatively. Buyers considering a purchase in the next 12–18 months should monitor this review closely via the LTA website and industry publications like Motorist.sg.

Looking Ahead: The New Normal

The EV transformation of Cat A is not reversible. Battery costs continue to fall, Chinese manufacturers continue to scale, and consumer acceptance of electric vehicles continues to grow. The 45.6% share in Cat A will likely become 50%, then 60%, then the clear majority within the next few years.

For prospective car buyers, the practical implications are:

• Budget higher for Cat A COE: premiums above $100,000 are the new baseline, not an anomaly. Plan your finances accordingly
• Seriously evaluate EVs: if you have convenient charging access, the total cost of ownership for a Cat A EV is often lower than an equivalent ICE vehicle despite higher purchase prices. Run the numbers with our Total Cost Calculator
• Monitor policy changes: the LTA category review could reshape the market. Set up COE price alerts and bookmark our trends page to stay informed
• Consider the Cat B option: with the Cat A/B gap at just $3,678, Cat B may offer better value than at any point in history. A slightly larger or more powerful vehicle for a minimal COE premium difference is worth evaluating
• Think about timing: our price prediction tool can help you gauge whether the market is trending up or down. The EV-driven structural floor on Cat A premiums means dramatic drops are unlikely, but month-to-month fluctuations still offer windows of opportunity

The age of electric vehicles in Singapore's COE system has arrived. Whether you embrace it by buying an EV, navigate around it by shifting to Cat B, or simply budget for higher Cat A premiums, the key is to make the decision with clear-eyed data—not assumptions from an era that has already passed.