LTA seeks public views on merging COE Categories A and B into single car category with feebate system

The Land Transport Authority (LTA) is currently seeking public input on potential modifications to Singapore's Certificate of Entitlement (COE) categorisation system for cars. The central proposal involves merging Categories A and B into a unified passenger car category, supported by a fee-and-rebate mechanism anchored in vehicle value. LTA Chief Operating Officer Mr. Lim Zhijian highlighted the relevance of this review, given the evolving nature of vehicle technology and the automotive market.

The initiative stems from concerns that the existing COE framework is becoming less effective. Since 2014, engine capacity and power have been used to differentiate between mass-market and premium vehicles. However, recent advancements in electric vehicle technology have made these parameters less reliable, leading to an increased competition for Category A COEs.

This phenomenon has resulted in a narrowing price gap between Categories A and B, which contradicts the original design where Category B was meant to command higher prices due to its premium status.

To address this issue, LTA has crafted a preliminary plan based on feedback from over 200 individuals, academics, and automotive industry experts. This plan advocates for the merger of Categories A and B, coupled with a fee-and-rebate system to ensure that higher-value vehicles continue to incur higher costs. The LTA is also open to input on how Category E should be adjusted should the merger be approved.

In addition to the merger proposal, LTA is soliciting views on the potential adjustments for Category E should the merger proceed. Other suggestions that have been received include allocating COEs based on family requirements, enabling individuals to directly bid for COEs, implementing a pay-as-you-bid system, establishing a separate category for private hire vehicles, and imposing surcharges on multiple-car ownership.