What's keeping COE prices up, and where premiums could be headed

One year ago, a new Toyota Corolla Altis cost $161,888. The price of this model has risen by $14,000 to $175,888 after the latest certificate of entitlement (COE) tender on Aug 20, driven largely by the higher COE premium in 2025.

- Lee Nian Tjoe

A Category A COE—meant for smaller, less powerful electric vehicles (EVs) or cars like the Altis—costs $104,524 after the Aug 20 tender, nearing the record of $106,000 set in October 2023.

The price of Category B COEs, used to register larger cars and EVs, reached $124,400, the highest since December 2023. This is despite a 29.4 per cent rise in the supply of Category A COEs and a 19 per cent increase for Category B COEs from a year ago.

Barring drastic policy changes, COE premiums are expected to stay high for the rest of 2025 on the back of strong demand, intensifying competition among car dealers, the increasing momentum of EV adoption, and the impending end of incentive schemes for EVs and cars with cleaner emissions.

How premiums will develop in 2026 and beyond remains to be seen, as the supply of COEs is projected to continue increasing.

WHY COE PRICES LOOK SET TO REMAIN HIGH IN 2025

There has been an influx of new Chinese EV brands into Singapore since 2024, all vying for market share with new model launches, competitive pricing and intensive promotion efforts.

The newcomers are up against existing dealerships, which typically amp up their efforts in the third quarter of the year and race to secure COEs to hit their annual sales targets.

Existing incentive schemes for EVs contribute to higher COE premiums, said automotive industry consultant Say Kwee Neng.

The incentives lower the upfront purchasing cost of EVs, and allow dealers to place higher bids for COEs and still price their electric models more attractively than non-electric ones, without compromising their profits.