While recent COE results have brought welcome relief to car buyers with three consecutive rounds of decline, a deeper analysis of the underlying supply-demand dynamics suggests the downward trend may be temporary. The fundamental constraints that drove premiums to record levels have not been resolved.
The current quota period benefits from a one-time injection of approximately 8,000 additional COEs, a policy measure designed to smooth out extreme price volatility. However, the forward supply outlook for the next two quota periods (August-October 2026 and November 2026-January 2027) points to a significant reduction in available certificates.
Demand-side factors are equally concerning. EV adoption is accelerating faster than supply can accommodate, putting pressure on Category A and B COEs. Corporate fleet renewals, ride-hailing platform expansion, and a growing population of COE-renewed vehicles all contribute to sustained demand. We examine the quota outlook in detail and what it means for buyers planning a purchase in the next 12 months.
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