Hiccups are to be expected at the start of any scheme or initiative, and this is very much the case with electric vehicles (EVs) in Malaysia, although no one could have seen the latest snag coming.

The year was supposed to have started with EVs on sale in the country being completely exempt from import duty, excise duty and sales tax, in line with the announcement made in Budget 2022. Under the initiative, EVs were also supposed to benefit from 100% road tax exemption, while buyers are set to enjoy income tax relief of up to RM2,500 for EV charging, whether through individual purchase of a home charger or through subscription to a plan. All this for CBU imported EVs, until December 31, 2023.

Nothing untoward at first, aside from car companies taking a while to announce revised pricing. Then, as reworked prices started to emerge, contention about the disparity in new 2022 Peninsular prices for EVs in relation to duty-free Langkawi cropped up. As it turns out, the tax reliefs don’t include sales tax, which is payable for CBU EVs.

Never mind, small thing, pay the SST and move on, yes? Unfortunately, another stumbling block has come about, with EV buyers complaining that they can’t get their vehicles registered with the road transport department (JPJ), not if they want to benefit from the 100% road tax exemption.

Sounds comical, but word is that there’s a backlog of EV registrations, supposedly due to the department not having been given instructions yet to completely waive the road tax fee for new EVs. That the bottleneck exists has been verified, confirmed by a number of industry players we spoke to, although one source says this is due to the JPJ having to update its systems and processes, and not because of a lack of directive on the matter.

Other sources say that JPJ is trying to resolve the issue, hopefully by this quarter, but that for now, registration of an EV remains possible if a customer is willing to pay for the road tax and not wait for the exemption. One of the sources added that no one is sure if the road tax paid will be refunded when the waiver is finally in place.

With EV road tax being calculated based on their motor kilowatt output instead of the traditional engine cc displacement for regular ICE vehicles, some buyers will be looking to wait, while some might not feel the need to. That perspective will vary.

For example, a Kona Electric e-Max 64 kWh buyer might well find the RM463 he/she has to pay based on the vehicle’s 150 kW output a small niggle. A new Porsche Taycan 4S buyer, on the other hand, might consider the 390 kW vehicle’s road tax of RM7,504 a bit hard to swallow, even if the reality is that the sum shouldn’t even be a bother for someone buying such a car (if it’s there, the adherence to free should always be the intent, you see).

In any case, the Taycan owner wouldn’t pay that price at this juncture, because as we understand it, the 50% road tax reduction for electric and hybrid cars announced by the PH government in 2019 is still in place (until it’s superseded by the new 100% exemption).

As such, the Taycan 4S’s road tax would be RM3,752 right now, surely a snip given that one has already saved RM105,000 from import and excise duty exemptions. But no matter, it’s the principle of it where buyers are concerned. Free should be free, if stated as such.

We’ve reached out to the relevant authorities to get further clarity on the issue, and will update on this as we get further information. Find out how EV road tax is calculated in Malaysia, here.