Sadly, the Tesla Model 3 I wanted would come with a S$15,000 surcharge under the proposed three-band COE system.
I held off buying last month. My Mazda still has time left, and I wanted to see what the COE review would bring.
So much for waiting for better news.
Source: CNA/LTA, based on 2025 registrations. Still a proposal; the five-band option charges this Model 3 S$7,500 instead.
Cheaper cars get cheaper. Then what?
The idea is to merge Cat A and Cat B. (That part makes sense to me.)
Then comes the new rebate-and-surcharge system, based on OMV, the car’s assessed import value.
A BYD Atto 3 gets S$15,000 off. The Model 3 pays S$15,000 extra. A S$30,000 gap for 2 EVs, before the cars’ own price differences.
I’m biased because I wanted the Tesla. But I still don’t see what this solves.
There aren’t more COEs. A wealthy buyer’s second car gets the same rebate. Lower OMV doesn’t automatically mean less congestion or pollution.
We’re being nudged towards cheaper cars. Why is that the goal?
An incentive to cut features
Manufacturers already tweak power to squeeze cars into Cat A. This proposal gives them another target: get the car’s import value low enough to qualify for a cheaper band.
Two models with almost the same import value could land on opposite sides of a cutoff, with a S$15,000 difference in their rebates or surcharges. The five-band option still leaves S$7,500 jumps.
LTA would use each model’s typical import value from past registrations and review the cutoffs every year.
So a manufacturer has a reason to offer a version with cheaper parts or fewer features to get into the cheaper band. That’s what bothers me: the tax saving could make stripping out features more worthwhile than improving the car.
Why can’t they use a smooth formula?
We already have ARF. It isn’t a perfectly smooth formula either, but its higher rates apply only to the slice of OMV above each threshold.
So if the car you want sits just above an ARF threshold, you pay a little more tax. You don’t suddenly owe thousands more just for crossing the line.
Surely we can manage that here too.
If the goal is to tax expensive cars more, why not adjust ARF? Account for PARF, recently cut for new cars, too, and work out one coherent tax schedule.
I care about what I get for the total price. If manufacturers cut features to qualify for a rebate, I’m not convinced buyers are better off.
It’s still not too late to send LTA your feedback. The consultation closes on 2 November 2026 at 11:59pm.