In line with the low carbon mobility objectives and green mobility agenda outlined in the 12th Malaysian Plan (RMK-12), initiatives to strengthen the local electric vehicle (EV) industry and green technology ecosystems are reportedly set to be announced in the upcoming Budget 2022, Bernama reports.

This has been welcomed by members of the local automotive industry, which says that the move is timely. According to Volkswagen Passenger Cars Malaysia (VPCM) managing director Erik Winter, the government’s ambition to enhance e-mobility is a crucial step for the country to become a low-carbon nation, and that the shift is already happening globally where EVs are quickly becoming the norm.

“Malaysia should not lose out on the opportunities that EVs can bring, so we hope the government will allocate funding in Budget 2022 in developing an e-mobility road map for Malaysia. We need to look into creating a holistic EV ecosystem, expanding proper infrastructure, introducing tax incentives for both businesses and customers, and more. We at VPCM are always ready to support the government with industry insights and knowledge wherever needed,” he told the national news agency.

Meanwhile, Honda Malaysia president and COO Sarly Adle Sarkum said the company was looking forward to developments. “We appreciate the government encouraging various green technology policies and incentives to promote green technology among automotive players in the industry,” he said.

In RMK-12, the government said that usage of green vehicles will be promoted in order to drive user transition to cleaner mobility. To this end, it will review the incentives provided to manufacturers based in the country for the production of these vehicles, as well as their purchase by customers.

Earlier this month, international trade and industry minister Datuk Seri Azmin Ali said that various strategies would be employed to promote EVs in the country, covering aspects of production, sales and the development of a charging infrastructure, set in a comprehensive, clear and consistent policy.

He said the update to the National Automotive Policy (NAP 2020) will underline specific initiatives to strengthen the EV ecosystem, such as the manufacturing of critical parts, standard setting, and encouraging research and development, commercialisation and innovation to develop local technologies.

Incentives will come in the form of direct and indirect tax relief for manufacturing of EVs, parts manufacturing and ecosystem development such as charging infrastructure, and incentives for OEMs include pioneer status, an investment tax allowance as well as import and excise duty exemption for EVs. Users are also expected to benefit from full road tax exemption as well as income tax relief for the purchase of EVs as well as for the installation of EV chargers.