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Tesla is having a moment in rich Singapore, where new vehicle registration is strictly regulated to manage the city state's traffic and pollution. Surging sales are eating into rivals' market share.
The Tesla Model 3 costs roughly S$200,000 ($148,300) in Singapore, partly due to an ownership fee, compared to less than $40,000 in the United States, highlighting the company's rise in the global car market.
Tesla's market value topped $1 trillion this week, surpassing the total value of Toyota Motors, Volkswagen, Daimler, Ford, and General Motors. According to figures from Singapore's Land Transport Authority (LTA), the number of new Teslas on Singapore roads increased by more than tenfold to 487 in the third quarter, up from just 30 in the first half. In September, the firm surpassed Nissan, Audi, and Kia to become Singapore's sixth most popular automobile brand.
Experts say there is no one cause for the increase, despite Singapore's announcement this year of a subsidy of up to S$45,000 for electric car owners. Tesla may just be able to deliver more cars than competitors since it appears to have performed better than other companies in dealing with supply chain challenges. There is a significant amount of unmet demand. Now that the supply has arrived, Tesla will very certainly be working through a big backlog.
Last month, 314 Teslas were registered in Singapore, nearly matching Hyundai and trailing top brands Toyota Motors and Honda. New buyers, according to the EV company's website, must still wait 4 to 12 weeks for their vehicles.
In the third quarter, Daimler's Mercedes-Benz and Nissan's average monthly new car registrations fell 45 percent and 27 percent, respectively, from the first half of this year.
Only Tesla and Korean carmakers Hyundai and Kia broke the trend among major suppliers, with monthly automobile registrations dropping 15.8% on average last quarter compared to the first half. Hyundai and Kia both recorded sales increases of 13.6 percent and 25 percent, respectively.
Factory interruptions caused by a global chip scarcity, according to analysts and industry experts, likely impacted delivery and sales in recent months. Hyundai and Tesla are two of the few carmakers who have outperformed their competitors when it comes to dealing with interruptions.
Because of Singapore's severe car registration limits until early 2025, Tesla's market share growth comes at the expense of its competitors in the tiny and competitive country, which spans 50 kilometers (31 miles) east to west and 27 kilometers north to south.
Most people are ready to pay a premium for an electric vehicle, either because of environmental concerns or because they believe the long-term costs will be lower. This is a significant shift in mindset that will benefit both customers and the environment in the long run. The government has also given a clear direction to boost EV adoption, announcing in March 2021 that starting in 2030, all new automobile and taxi registrations must be of cleaner-energy types, and by 2040, all vehicles must run on cleaner energy.
Tesla accounted for 1.4 percent of the 36,629 new car registrations in Singapore this year, compared to 20.4 percent for Toyota. Singapore, which Tesla CEO Elon Musk has previously chastised for its lack of support for electric vehicles, aims to phase out all internal combustion engines by 2040 and is urging drivers to transition to EVs with a variety of incentives, including additional tax breaks and subsidies.
It's possible that the Tesla craze could diminish in the long run as competition heats up, but it's also feasible that it will aid in the adoption of electric vehicles (EVs). But, for the time being, Tesla may bask in the limelight in the Singapore region.