While the government has not yet outlined plans to push its electric vehicle agenda for the country, it is expected to do so in the near future. The means to address the topic will come from a specific policy for EVs as part of the upcoming revision of the National Automotive Policy (NAP 2020).

Last month, Malaysia Automotive, Robotics and IoT Institute (MARii) CEO Datuk Madani Sahari said the tweaked policy, specifically for the EV segment, would contain revisions that would jump start the road to electrification in Malaysia and enable the country to attract investment in the particular field.

He reiterated this during the MyKar electric vehicle project presentation held at the Sepang International Circuit two days ago. “The government, through MITI, is finalising the last phase of the new policy on EVs. It is not a new thing, it is just a very specific policy on EVs in Malaysia, in how are going to deploy EVs in a more robust fashion,” he said.

He explained that the revisions would address the shortcomings of that drafted in NAP 2020. “In NAP 2020 there was already mention of incentives for EVs, but we feel that the incentives were not that fleshed out, and we have discussed with some stakeholders matters pertaining to new incentives. These new incentives are quite comprehensive in the sense that they touch on everything, from OEM vehicle manufacturers and the vendor community to infrastructure,” he explained.

“We are already in talks with Tenaga Nasional (TNB) about the installation of charging stations, and we are also in talks about tariffs with regards to these. Other projects are also being discussed, some based on sharing, some on leasing,” he said.

“Also, for consumers, discussions are related as to what incentives that can be given to them, not just from buying a car but installing a charger at home, and even the upgrading of wiring from single phase to three phase, which you will need if charging at home,” he added.

The policy is also proposing the allowance for foreign automakers to bring in a number of completely built-up (CBU) units with the absence of tariffs, the number of which will be determined based on the value of investments coming in. “While we all understand CKD is eventually the way to go, the government is looking at the possibility of bringing in CBU units (under these conditions) so that we can quickly introduce EVs into the country,” he said.

Of note is the plan to make them competitively priced, at least in the initial stages. Speaking on the sidelines of the event, he told paultan.org that the revised policy that has been drafted proposes not just providing these new EVs with zero excise and import duties (as previously reported), but also offering them full sales tax exemption and zero road tax.

If that sounds gobsmacking, it is, but it is also worth reminding that the excise duty for fully-imported EVs is currently set at a low 10%, regardless of brand. Nonetheless, there is still bound to be a tax shortfall as a result of such a move.

We ventured that the hardest part would be convincing the government to overlook the loss of revenue as a necessary sacrifice to achieve the intended aim of making a quick breakthrough. Madani agreed that it was a challenge, but said that the number of vehicles would not be high, and the idea is to look at returns over the long term.

“Of course there would be a shortfall of revenue in the near future (with such a plan). We might lose RM100 million (from the absence of any tax/duty collection) in the short term, but we project that we stand to gain RM320 million down the road once electrification takes off (and investment flows in),” he said, adding that the policy had been sent on to the Cabinet, where the points will be discussed.

Madani said it is hoped that all this will add up to provide the kick needed “to make Malaysia at least one of the key countries in the region where EVs will thrive in the future.” Given that the likes of Indonesia and Thailand have surged ahead in terms of planned developments and investment, a well-defined, agressive policy cannot come soon enough. The question is, will it happen?