The Malaysian Automotive Association (MAA) is of the opinion that the government should extend electric vehicle (EV) incentives beyond the current established deadlines.
At present, fully-imported (CBU) EVs are exempted from import duty and excise duty until December 31, 2025, as announced during the tabling of Budget 2023. This is an extension from the previous deadline of December 31, 2024, which itself was extended from the original end date of December 31, 2023.
As for locally-assembled (CKD) EVs, they are exempt from excise duty and sales tax until December 31, 2027, which is two years more than the original deadline of December 31, 2025 announced during Budget 2022.
In total, two deadline extensions to the incentives for CBU EVs have been announced so far, the latest being five months away. For now, there has been no indication from the government as to whether another extension will be provided, so we’ll have to wait and hopefully get some answers at this year’s budget tabling.
Answering a question on the matter at a press conference event today, MAA president Mohd Shamsor Mohd Zain said: “As far as EV subsidies are concerned, we would like to have the government continue (them). We feel that there is still not enough momentum for EVs and the market needs to have a continuation (of incentives) to ensure that there will be long-term effect.”
“It will also give an opportunity for other OEMs to plan production and establish a volume base. Right now, it’s only about 4% (market share) as far as EVs are concerned while HEVs are at about 4.6%, so it is still low in terms of the government’s aspiration of 15% (of total industry volume) by 2030,” he added.
“As far as the industry is concerned, we would like to see continued implementation (of incentives), and that way we will have more participation from the OEMs. Hopefully we will see new products, new models in the market,” Shamsor continued.
Answering a separate question on the adoption rate of EVs this year, Shamsor replied that the association is projecting xEVs (includes EVs and hybrids) to close the year at around 9.6% of TIV. In the first half of 2025, he said xEVs made up around 8% of TIV, adding that new models would help continue the momentum.
Going back to incentives, Shamsor said: “Definitely we will monitor the situation in regards to EV subsidies; if it is going to be discontinued, it will probably have a last-minute rush towards the end of the year. Definitely it will be very bearish in the long run.”
“The impact will be similar to what happened to HEVs when we introduced it about 15 years ago. Basically, they just disappeared from the market for a while before manufacturers were able to come up with a local assembly plant. Local assembly takes time to plan and we would like to encourage a longer-term policy perspective on this,” he added. Given the incentives for CKD EVs ends in 2027, this could deter manufacturers from committing to local assembly of EVs.
The association has been vocal about extending EV incentives before, previously pushing for them to be extended until at least 2030 to improve adoption rates to the target of 15% by 2030.
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who will benefit from it,, only T20 lorr
Once import and excise duties on imported EVs are imposed prices will more than double. Their market will disappear overnight. Will the manufacturers and distributors still be around to provide service and spare parts or will they pull out leaving orphan cars which cannot be maintained?
What it should be is to extend ckd ev tax free status till 2030 minimum so that company can establish long term plan for local ckd..cbu tax free can go..
Government need the money from mahakaya to build schools, hospitals, nurse doctor police pay. Don’t bother other country.
It cannot be in the interest of existing MAA members that more chinese brands enter the Malaysian market!!!