CHINESE EVS STAND TO GAIN
The new PARF rates will also affect EVs of different makes, depending on how expensive they are.
Associate Professor Walter Theseira from the Singapore University of Social Sciences said the new move is likely to benefit Chinese EV brands more than American or continental marques, because Chinese EVs generally have lower Open Market Values.
According to data from OneMotoring, in January, BYD’s 11 models had a median OMV of S$28,359.
By comparison, the median OMV was S$49,433 for Tesla’s five models, S$48,539 for Volvo’s five EV models, and S$43,263 for Audi’s four EV models.
The lower OMV results in a lower ARF. After accounting for the upfront rebates from the VES and EEAI, many Chinese EVs end up with a much smaller ARF payable.
“Most (Chinese EVs) have an ARF that is very close to the rebate limit and so they have hardly any PARF to speak of,” said Assoc Prof Theseira, a transport economist.
For example, a BYD model with an OMV of S$28,359 would incur an ARF of S$31,703. After applying S$30,000 in rebates, the ARF payable is S$1,703.
In contrast, a median Tesla model with an OMV of S$49,433 would incur an ARF of S$65,923. After the same S$30,000 in rebates, the owner would still pay S$35,923 in ARF.
Because the PARF rebate is pegged to a percentage of the ARF, any reduction in the PARF rate has a much larger dollar impact on higher-OMV cars.
In the same scenario, the BYD that is scrapped before five years would get S$1,277.25 under the current PARF rate. Under the new rate, that is S$510.90 – a difference of S$766.35.
The Tesla that is scrapped before five years would get S$26,942.25 under the current rate. Under the new rate, that is S$10,776.90 – a difference of S$16,165.35.
In absolute terms, the loss in rebate value is therefore far greater for higher-OMV models.
“The OMV (of continental and American EVs) tends to be significantly higher than the Chinese-branded EVs, so I think they would get hit,” said Assoc Prof Theseira.