Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad expects demand for electric vehicles (EVs) to grow significantly in 2023. In a report by The Star, she said this will be driven by current incentives provided by the government as well as upcoming launches of more affordably priced EVs.

Aishah added that as of October 2022, a total of 2,093 EVs have been registered, with Fitch Solutions projecting the figure to hit 4,449 units next year. “MAA believes we can reach this (Fitch Solutions’ forecast) sales in 2023, with the current tax incentives on completely knocked-down (CKD) and completely built-up (CBU) vehicles,” she said. For context, last year saw just 274 EVs sold in Malaysia.

Currently, CKD EVs are exempted from excise duties as well as sales tax, while components for local assembly of EVs are exempted from import duty until December 31, 2025. Meanwhile, CBU EVs are exempted from import and excise duties until December 31, 2024, as per what was announced in Budget 2023 (Bajet 2023).

According to Fitch Solutions, EV sales in Malaysia could exceed 1% of total industry volume (TIV) by 2024 with growing demand for EVs, and the research company expects plug-in hybrid vehicles (PHEVs) to lose some market share next year.

Earlier this month, minister of international trade and industry Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the target was to have electric and hybrid vehicles account for 15% of TIV by 2030, and 38% by 2040. This will also be met by a more robust charging infrastructure, with 10,000 public charging stations due by 2025.

These targets are achievable, Aishah said, provided the incentives remain in place and the government follows through on its plan to install more charging stations across Malaysia. “I do hope the current government continues to emphasise and encourage EV sales,” she said.

Nik Nazmi Nik Ahmad, minister of natural resources, environment and climate change, said last week that affordability would be key to increasing EV uptake, with the government looking into ways to enable EVs priced below RM100,000 to be brought into the market.

“Most EVs in our market cost RM100,000 or more, hence the need to shift our attention to a larger market with EVs costing RM100,000 or less. The government is exploring avenues to introduce more affordable EVs in Malaysia and will be observing Proton as to when they will introduce a Geely-based electric vehicle here,” the minister said at the time.

Analysts are also optimistic when it comes to demand for eco-friendly vehicles in Malaysia, with Tradeview Capital CEO Ng Zhu Hann saying consumers are more aware of climate change and the importance of the green agenda.

Should supply chain disruptions be resolved, carmakers will be able to fulfil orders quicker, he noted, adding that range anxiety can be alleviated with increased effort from the private sector to establish a more comprehensive charging network.

Maybank Investment Bank also published a report highlighting the importance of electrification to draw in new foreign direct investments. “Malaysia’s EV push is gaining momentum. The adoption rate is improving post the EV tax incentives support, with increasing new BEV (battery electric vehicle), hybrid electric vehicle (HEV), and PHEV model launches as well as faster rollouts of fast public chargers,” it said.

The company also revealed the country’s current xEV (a generic term for electrified vehicles like HEVs, PHEVs and fuel cell electric vehicles) is currently at 2.6%, while it is 0.3% for BEVs. This is described as “decent” when compared to other ASEAN countries.