Malaysia aims to grow the electric vehicle market share to 38% by 2040 through the Low Carbon Nation Aspiration (Aspirasi Rendah Karbon) 2040, which is part of the National Energy Policy 2022-2040 (Dasar Tenaga Negara, or DTN) that was announced yesterday.

Last year, 274 EVs were sold in Malaysia from a total industry volume (TIV) of 508,911 units in 2021. The uptake of battery-electric passenger cars are set to increase with the duty exemption incentives for EVs under Budget 2022, Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad said in January this year.

The MAA, which represents carmakers in Malaysia, stated yesterday that it wants the tax breaks on electric vehicles to be extended to 10 years in the upcoming Budget 2023, as the MAA president stated that it will be too early to end the incentives in 2023.

The December 31, 2023 exemption end date was for CBU (fully imported) EVs, which would enjoy 100% duty exemption up to that date, while CKD EVs get a further two years on the 100% duty exemption, until December 31, 2025.

Further to the low-carbon nation goals, the DTN 2022-2040 also aims to increase the biofuel content to B30, or 30% biofuel as the alternative fuel standard for heavy transport, up from the B5 standard laid out in 2018. B5 biodiesel was introduced in Malaysia in 2011, beginning with its rollout in Putrajaya.

Meanwhile, DTN 2022-2040 also aims to increase public transport usage in urban areas. The is hoped to increase the percentage of urban public transport modal share from 20% in 2018, to 50% by 2040.