Why Cat A Premiums Hit $112K

A New Threshold for Category A

In the March 2026 second bidding exercise on 19 March, Category A COE premiums closed at $111,890—just shy of the $112K mark and a clear signal that the six-figure era for small-car certificates is not a temporary spike but a structural reality. Category B closed at $115,568, Category E at $118,119, Cat C at $78,000, and Cat D motorcycles edged up to $9,589.

What makes this moment different from previous Cat A peaks is the confluence of demand-side forces that show no sign of abating. This is not a seasonal blip driven by Chinese New Year buying or a one-off dealer stocking cycle. It is a market being fundamentally reshaped by electrification, manufacturer strategy, and a policy framework that has not yet caught up with how people actually buy cars in 2026.

In this analysis, we break down the three pillars of the Cat A surge: the EV demand engine, the supply constraints, and the category convergence with Cat B that has prompted the government to act.

The EV Demand Engine

The single biggest factor behind elevated Cat A premiums is the explosion of electric vehicle demand within this category. The numbers are striking:

• In the first nine months of 2025, EVs accounted for 45.6% of all Category A registrations.
• Across the broader market, EVs represented 40.2% of all new car registrations in Q1 2025.
• As of September 2025, there were 41,732 electric vehicles on Singapore’s roads, making up 6.3% of the total car population.

These figures point to a market in rapid transition. Five years ago, EVs were a niche curiosity popular mainly among early adopters and technology enthusiasts. Today they are close to becoming the majority within the most popular COE category. The speed of this shift has outpaced the COE system’s ability to adapt, creating the pricing dislocations we see today.

BYD and the Affordable EV Revolution

BYD has emerged as the dominant force in Singapore’s EV market. The Chinese manufacturer registered 2,183 units in Q1 2025 alone, more than any other EV brand. Models like the Dolphin and Atto 3 offer a compelling package: modern technology, adequate range for Singapore’s compact geography, and a price point that, after accounting for government incentives and lower running costs, competes directly with mid-range petrol sedans.

BYD is not alone in this space. Other Chinese brands including MG (owned by SAIC), Chery, and Great Wall Motors have entered the market with similarly positioned products. Korean manufacturers Hyundai and Kia offer their own Cat A-eligible EVs. Even European brands like Volkswagen and BMW have Cat A electric offerings, though at higher price points. The net effect is that the Cat A EV market has gone from a handful of models two years ago to several dozen today, dramatically widening the pool of potential buyers.

The Power-Tuning Strategy

Here is where the story takes a structural turn. Of the 38 EV models currently registered under Category A, at least 15 have a Category B version—a higher-powered variant of the same car that exceeds the 130 bhp threshold. Manufacturers are deliberately tuning the power output of their Singapore-spec models downward to qualify for Cat A.

Why? Because Cat A has historically been cheaper than Cat B. For a manufacturer selling a mass-market EV at $50,000-$70,000 before COE, a $10,000-$20,000 difference in certificate cost is the difference between an attractive proposition and a hard sell. The incentive to engineer for Cat A eligibility is enormous, and no manufacturer wants to be the one that disadvantages its customers by selling a full-power Cat B variant when competitors are offering tuned Cat A alternatives.

The unintended consequence is a steady migration of demand from Cat B into Cat A. Buyers who, in the internal-combustion era, would have purchased a 150 bhp sedan in Cat B are now buying a 129 bhp EV in Cat A—same car, same brand, different tune. The demand has moved but the quota has not, and that mismatch is the core driver of the price surge.

Supply: Tight and Getting Tighter

On the supply side, the Feb-Apr 2026 quarterly quota sits at 18,824 certificates in total, with Cat A receiving just 1,264 per month. The vehicle population growth rate for Cat A is 0%, meaning every new certificate issued must come from a car being deregistered. When owners choose to renew rather than scrap, replacement certificates dry up and the available pool shrinks.

The renewal incentive is strong in the current environment. If you own a 10-year-old Cat A car and the prevailing quota premium for renewal is $50,000-$60,000, while a new COE costs $110,000+, the mathematics favour renewal for anyone whose car is still in reasonable condition. This perfectly rational individual decision collectively suppresses new certificate supply, contributing to the very premium inflation that makes renewal attractive in the first place. It is a textbook case of a self-reinforcing feedback loop.

The government’s injection of up to 20,000 additional COEs starting February 2025 has provided some buffer, but the distribution is spread across years and categories. The per-exercise impact on Cat A is perhaps a few dozen extra certificates—against a demand pool that has grown by thousands of new EV buyers, the supply relief is marginal at best.

The Cat A / Cat B Convergence

The most striking market signal in recent months is the convergence—and occasional inversion—of Cat A and Cat B premiums. In February 2026, Cat A closed at $106,501 while Cat B was $105,001: the first time Category A exceeded Category B in the system’s modern history. This was not a rounding error or a fluke; it was the logical culmination of trends that had been building for two years.

By the March second bidding, the traditional order had reasserted itself ($111,890 for Cat A versus $115,568 for Cat B), but the gap of just $3,678 is a fraction of the $20,000-$50,000 spreads that were typical even two years ago. For a category structure premised on the idea that bigger, more powerful cars should command higher premiums, this convergence undermines the fundamental rationale.

The Government Responds

Acting Transport Minister Jeffrey Siow acknowledged the problem on 4 March 2026 when he announced that LTA will conduct a formal review of COE categorisation. The review will examine whether the current power-based threshold remains appropriate in an era dominated by electric powertrains, where torque and power characteristics differ fundamentally from combustion engines.

The review is welcome but the timing is uncertain. Public consultation, policy design, system updates, and transition arrangements could easily push implementation to 2027 or beyond. Until a new framework is in place, the status quo will persist: manufacturers will continue to optimise for Cat A, EV buyers will continue to crowd the category, and premiums will remain elevated.

What Does $112K Mean in Practice?

To put the number in context, consider the total cost of a representative Cat A purchase. A Toyota Corolla Altis 1.6 currently sits at approximately S$162,888 on-road. Roughly two-thirds of that price is regulatory cost—COE, ARF, and registration fees. The actual vehicle is worth perhaps $50,000-$60,000 at the factory gate.

When you layer on financing (car loan rates currently range from 2.28% to 2.88% per annum), road tax (around $744 per year for a 1,600 cc car), insurance ($700-$1,800 per year), petrol ($2,000-$4,000 per year at an average fuel economy of 15.4 km/L and $2.90/L), and HDB parking ($110 per month), the minimum monthly ownership cost lands at approximately $2,100. Over a 10-year COE lifespan, you are committing to roughly $250,000 in total expenditure for what is, by global standards, an unremarkable family sedan.

Use our Total Cost Calculator to model your specific scenario, including loan tenure, down payment, and running costs. The ARF Calculator can show you exactly how much of your car’s price goes to the Additional Registration Fee.

Will Premiums Keep Rising?

The short answer: probably, at least through mid-2026. The combination of strong EV demand, constrained supply, and a category framework that has not yet been updated creates persistent upward pressure. Three scenarios could alter the trajectory:

• Category restructuring: If LTA widens Cat A or creates a new EV category, demand would be redistributed and Cat A premiums could ease. This is the most likely structural relief, but timing is uncertain and the transition could create its own volatility.
• PARF-driven deregistrations: The Budget 2026 reduction in PARF rates (capped at $30,000 from 13 February 2026, down from $60,000) may prompt some owners to deregister sooner, feeding certificates back into the system. The impact would be gradual rather than immediate.
• Demand cooling: A broader economic slowdown or rising interest rates could dampen buyer appetite. However, Singapore’s labour market remains tight and consumer confidence is holding, making a sharp demand pullback unlikely in the near term.

For the latest premium data, visit our Trends page. To understand how the underlying quota formula works, see our Quota Watch explainer. And if you want to be notified the moment premiums cross a threshold you care about, set up a Price Alert.

The Bigger Picture

Cat A at $112K is not an aberration—it is the predictable outcome of a policy framework designed for combustion engines being stress-tested by an electric revolution. The COE system was conceived in 1990 when the distinction between a 1,600 cc family car and a 2,000 cc executive sedan was clear and meaningful. In 2026, that line has blurred beyond recognition. A $40,000 BYD Dolphin and a $200,000 BMW compete in the same category, not because they serve similar buyers, but because their kilowatt ratings happen to fall on the same side of an arbitrary threshold.

The upcoming category review is perhaps the most consequential policy event for Singapore’s car market in a decade. How LTA redraws the boundaries will determine not just where premiums settle, but which cars Singaporeans buy, which manufacturers win, and how quickly the nation’s fleet electrifies. We will cover every development as it unfolds on our Trends page and in dedicated analysis pieces. For background on the system itself, start with our What Is COE? guide.