This infographic on electricity subsidies in Malaysia was published yesterday through Bernama. It says the ICPT rate for the period of January to June 2023 is a 27 sen surcharge over the current electricity tariff, but the government has decided to subsidise it to maintain the current 2 sen rebate for domestic users.
ICPT is basically a mechanism to review the electricity tariff every six months to take into account fluctuating fuel pricing, which contributes to 65% of the cost component of the electricity tariff.
It is revised every six months based on the six months period before it. Based on actual fuel costs from July 2022 to December 2022, the ICPT for January 2023 to June 2023 has been determined to be a 27 sen surcharge. The government has decided to fully subsidise this for domestic users, which is expected to cost RM10.76 billion for this six month period.
With all the recent talk about transitioning to targeted subsidies to ensure the T20 does not unfairly benefit from subsidies that they do not need, we thought we’d do a simple calculation to see if the government would be subsidising T20s that use electric cars less than if they were to drive ICE cars.
We decided to compare a Hyundai Ioniq 5 Max to a G20 BMW 330i. Why a Hyundai Ioniq 5 Max? Well, it’s simply because I have one so I am able to confidently say how much its electricity consumption is based on my mixed driving pattern, which in this calculation I will be using 17 kWh per 100 km.
An Ioniq 5 Max has a base price of RM270,408, with the price typically increasing to around RM280k when you upgrade to the 5 year warranty package. In choosing which ICE car to compare it to, we decided to use something that a typical T20 shopping for a car in that price range would buy, so we decided to use the G20 BMW 330i, which is priced at a premium over the Ioniq 5 Max at RM318k.
Now we know that BMW 320i is closer in price to the Ioniq 5 Max than the 330i, but we felt that someone who would go for the Max variant of the Ioniq 5 would likely be interested in driving a powerful car and having a higher equipment level, which is what the 330i would be instead of a base model like the 320i.
Based on Fuelly data for the 2021 BMW 330i, we took 7.28 L/100km as the average fuel consumption for the ICE car, and compared it to the 17 kWh/100km that I was getting with the Ioniq 5 Max.
So which T20 would receive more government subsidies? The Ioniq 5 Max owner or the 330i owner? We crunched the numbers based on inferred unsubsidised pricing for both electricity and RON95 petrol.
For unsubsidised RON95, we are using the RM3.22 per litre pricing used at the dedicated unsubsidised fuel stations in Perlis. For unsubsidised electricity, we are adding the 27 sen ICPT surcharge that is being subsidised to the highest TNB domestic tier, which is what T20 EV owners would typically pay to charge their cars at home.
After crunching the numbers, it turns out the BMW 330i owner receives a RM8.52 subsidy per 100 km, while the Hyundai Ioniq 5 Max owner receives less subsidies, with his EV netting him a RM4.92 subsidy per 100 km. So if more T20 switched to EVs, the government would actually be reducing its subsidy bill.
Interestingly, even if the EV owner did not receive any electricity subsidies and paid a full unsubsidised price of RM14.30 per 100 km, it would still cost less than paying RM14.93 for subsidised RON95 for 100 km of travel in the ICE car.
So there you have it, if our maths are sound, it would appear that the more of the T20 population that switches to EVs, the less government subsidies they would consume. But obviously, EVs are tax free to buy at the moment, so the government gets no duties income from it when T20s buy it vs ICE.
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First T20 need to folk out a large sum to buy EV. Next T20 need to pay for the outrageous road tax scheme. While the intention is to be more environmental friendly and at the same time help government reduce the subsidy load…the action by T20 will never be appreciated but they will find more ways to squeeze it out of you. Just pure facts base on what is happening! Do it for your joy, not for the ruler
So better make law that T20 only allowed to buy EV cars. No more petrol cars for them. Agree?
The comparison makes sense
Both cost premium to purchase
Target customer gotta be T20 ppl
Taking advantage of R/TAX exemption
Sadly RV of EV cars depreciate alot faster
Travel range of ICE and refuel alot convenient
Well, going back to this article by PT
T20 please help govt to save more..
Stupiak only cares their political career only. Ah Jib already bring GST but PH abolish it. Under GST, dont care lah u T20 or M40, if you spend you pay tax lor. Fair.
Sure is fair
Price will increase
Demand jeopardised
All groups pay the same %GST
B40 removing from consumption
M40 downgrade their consumption
Overall B40, M40 consume less
But only complaints increase….
Then B40, M40 started to think
Why not just target T20 for tax?
Anwar menang rakyat senang
Agreed. Now we, the Rakyat must do our part – voice of support for Anwar &:Unity Govt to go after all the rich who are guilty of “robbing the nation” through non-payment of taxes, bibery & corruption. Imagine what they billions from IMDB can do to help all the rest of the Rakyat? It is said, over the years, “some hundreds of billion” have been robbed. Make then pay – 5 or even 10 times amount “robbed” & enjoy Kajang Hotel for min 10 yrs (with or without pardon or parole). It will quickly out an end to corruption & robbery plus the Rakyat can be “rewarded” – not by subsidies but control of prices.
If T20 dislike being taxed so much, buying a normal car is peanuts to them, with same tax and roadtax with everyone. Nobody forces T20 to buy top of the line stuff. So if T20 wanna stand out like a nail, be prepared to pay “premium” for status.
Agreed. Fair – you got the $ and need to flash, you Pay the Price.
T20 had paid large sums of Taxes to buy the cars (being it ICE or EV). It is fair for them to get some subsidy. *Period*
Which T20 pays more government taxes….come on, why our government is so negative? They only know what the T20 takes but ignore what T20 gives…wish u collapse again
Probably you are still a college student and don’t understand how Malaysia taxes structure works.
He barely can afford college, probably just like some B40 rempit
Work harder, pity u guys
Bila PPR biforti berbicara.
They wish nothing, only delighted to see others collapse…
Study & work hard brother or you shall be in biforti for eternity.
neither… it’s the career politicians that ‘eat’ the most!
Later got 1 idiot come out say “Tax the rich, help the poor”
Ya feed the poor like feed a DOG
Mayb we can do like this :
Gen 1 : Poor
Gen 2 : Poor
Gen 3 : No more
As you can see, we shall help to gen 2 in order for that generation to change their income bracket (education).
If all the helps and still the outcome POOR. We shall CASTRATE them at all cost. Castration can be done before gen 2 get married after they failed to improve (education).
So that they will not breed like no tomorrow.
Lahir miskin bukan salah kita.
Mati miskin memang salah diri sendiri.
Jgn salahkan TAKDIR kalo diri sendiri tu x nak berubah.
YOLO
Nurul Izzah
Your calculations is not accurate as the Hyundai Ioniq 5 Max is fully exempted from import and excise duties, 50% sales tax as well as road tax. These should be added in as the government subsidies.
No. Tax free is not subsidy. Its the government not earning more from tax. EV’s in Malaysia still have to pay SST. Look up at USA $7500 rebate for EV cars, now that, on top of it being tax free, is only considered subsidy.
Google what is the difference between subsidy and exemption. And then print a poster big big that read “I will not dump my s*** on the internet” and paste it in front your bed.
“For example, a government might issue cash payments to businesses, but it might also provide a subsidy by forgiving loans or reducing taxes.”
Reducing taxes = subsidy
Google first, before you arrogantly advise others to do so.
T5 or T20?
agree…. Please don’t assume all T20 drive Merc, BWM, Lexus or Volvo.. Only top 2% or 5% can afford that
Invest more… Invest…
But don’t fall to MLM or Skim Cepat Kayap.
The “T20 labelling” is just getting out of proportion in media and coming out from politicians’ mouth, as though T20 is the “public enemy” and non-stop demonizing this group of Rakyat. Portraying a negative view towards them and having the impression that they deserved to be “Punished”.
As tough, all T20 lives in million ringgit houses, all T20 driving Merc and BMW, and fine dining in fancy restaurant. With the depreciation of our ringgit and inflation, urban folks are merely earning enough to live day by day.
Is it wrong to work hard to earn a living and is it guilty for being brave to take risk in venturing into businesses? And anything wrong for so-called “T20” to pay a higher share of income tax to the government’s coffer, they have already contributed their fair share to pay higher income taxes and spending in the market to keep the economy going.
Instead of demonizing the “T20”, why can’t the government come out with more constructive steps to up lift the wages of the lower income people?
B40 vs T20.
By giving ‘gula-gula’ to B40 will secure their votes.
T20 = Rebellion
Tsi,You got a point.
Everything said n done..B40,B40,B40.
YOU just go to where the B40 stays.
Rows and rows of brand new Protons and Peroduas.
Time to stop giving tenggiris to spoon feed them.If they can afford the latest Handphone,the latest Panasonic inverter aircons,60 in Xiaomi TV..we should teach them to be an “economic angler”.
Handouts is like the fuel subsidies..it is addictive like cigarettes.Another 2 decades,it will still be B40,B40,B40.
Handouts may breed laziness and incompetency.It is not gonna work.
As usual, it’s politicians that divide us. Race, religion, now social class. T20 households in KL/Klang Valley would feel closer to M40 when you account for living expenses. Not everyone is driving multi-million ringgit mansions and Benzes, let alone afford to buy RM200k EVs.
Coming back to EVs, a transitional measure govt. should consider is converting subsidising expenses towards “capital investment”. Maybe give the option for T20 households to use what govt would spend on those subsidies (say for next 1 year) to spend on not just an EV purchase, but also residential/community investment in charging infrastructure and perhaps solar generation as well. Yes, it comes out of the treasury in the short term, but it will pay off in the longer term.
want to get the most subsidy, it is better off being poor. quite all your high paying jobs, work as a gig worker. with the low income, you don’t need to pay taxes. if there are any epf redrawals, redraw as much as you can. up to you if you want to spend it all or invest elsewhere. then when government see that you don’t earn a lot as gig worker and low epf savings, they will give you more handouts.
if you are rich and work hard, u don’t get to keep your earnings from the hard work. in fact you need to give out more.
Actually stop free EV roadtax first, what propose environmental friendly/green energy/save the world crap, support environmental friendly is never just having freebie to minority while majority still driving ICE.
Funny that always aim T20 group. T20 earn more and spend more, they create economy cycle, not all T20 are rich and very rich people, yet the inefficient tax system aim them to cover government shortfall tax income. A fair tax system like GST got abolished. A better tax audit on enterprise and company shall enforce to improve tax collection.
PT is targetting T20 as well? Now do similar calculation on how much B40 spent on sport rim, paintjob, exhaust modification, etc vs a normal bike and how much money can be saved.
something really wrong when 330i is for t20
You forgot the EV was subsidised at point of sale with little taxes compared to ICE cars.
Same applies to M40 or B40, if BEVs were accessible to them. Point is, more BEVs, less fuel subsidies.
What about try compare an EV to a hybrid or Diesel car?
t20 here if go other country like usa, singapore, korea, japan, etc become b40 also……nothing to shout about t20 nowdays here…mostly average joe saddle with high debts to pursue lifestyle…..only the elite class or crony sapu all and super rich here….
Understand the purpose of the article. Unfortunately you miss pointing out that T20 are the ones paying a large part of the taxes, and in so doing, are also supporting the country.
Any govt must keep a balance between taxing the higher earners while also supporting them in their hard work.
Subsidising energy costs can work well to allow more freedom of transport thus facilitating business, tourism etc.
Don’t punish people just because they worked hard to be in T20, while also helping B40 and M40. Balance is needed
Tokok! My income alone reaches T20. But I do not buy a car that more than rm200k. Note that I did not say I do not afford a car more that 200k. Simply because I would like to save as much as possible for my two kids education fund. I wish that they can study abroad and settle down there. I will not spend Too much money on liability. Why everyone thought T20 is very rich and will definitely buy expensive car? Only T.001 will!
I drove Axia
i had seen maintainance comparison and car comparison but this is the first time i see t20 tax subsidies comparison is this something t20 like to do? they compete between each other to see who has more subsidies lol why cant just put the title electric vs ICE tax subsidies
nothing to shout about t20 here nowdays la….buy one decent pigeon hole condo to stay also cost 600-800k and one decent 1.5litre vios or city also 90k…so apa mau heboh…loan saja lebih bayar sampai mati…..the rich one is the elite and cronies la….the so call 1% of the society sapu habis everything….
Where is the genius rafizi n zafrul calculation ?
T20 aren’t going to make a change when there isn’t a good deal for them in the medium term. T20 May flock to buy EVs but the ecosystem has to develop much more. Also T20 will drive within their area and fly out for long distances to save time. They get to be T20 because they are financially prudent, so very little emotional decisions.
The phase “eat government subsidies” is an insulting term to anyone who is paying personal income tax which is being used to fund such government subsidies.
Petrol and electricity subsidies should either be enjoyed by all citizens or non at all.
Just float the petrol price and give extra rm300 a year to the B40 group and stop insulting your tax payers.
Ev are more sensible in Thailand cause petrol 7 rm to one litre
T20 – more work, get less
B40 – no work, get more.
I paid RM3000+ monthly, why cant i enjoy few subsidy (RM8.52 x 5 = RM42.6, since my monthly mileage around 500km). Tell me what kind of fair is that?
This comparison is not complete and thorough.
The govt also subsidized coal/gas for generating power for TNB (through IPP). Do we consider that as well?