With many countries slowly recovering from the impacts of the COVID-19 pandemic, industries have also become acclimated to the new ways of doing business. New business models have been introduced, digital transformation has accelerated, and even people have shifted their demands to the needs of the times.
“That said, we note that there is room for stronger growth given the wealthy population, especially as the cost of EVs moderates in Singapore and as the cost of ICE-vehicle ownership rises,” Fitch Solutions stated in the report. For cars and taxis, the government will provide an EV Early Adoption Incentive in which electric cars and taxis will receive a rebate of up to 45% on the Additional Registration Fee, capped at $27,266 , which will run from three years from January this year.
Moreover, the agency noted that Singapore's vehicle sales market is very cyclical given the high cost of vehicles, the bidding process of obtaining ownership, as well as the restrictions on vehicle fleet size. They see that the high cyclical sales market is an indication that EV adoption could become rapid in the next few years. They also expect an acceleration of EV charging infrastructure developments over 2021 to 2025, as the government looks to provide more support to its nascent EV industry.
“Most consumers are willing to pay a premium for an EV, either due to environmental concerns or an understanding that the long-term costs will likely be lower. This is a fundamental shift in attitudes, which is ultimately beneficial for consumers and the planet,” EY Global Transport Leader Tony Canavan said.
UOB Kay Hian also forecasts that the growth of e-commerce will drive demand for more logistics space. It should be pointed out that the logistics sector is a key pillar of Singapore’s economy. In 2019, it contributed to 1.4% of the country’s gross domestic product.