MAA pushing for more hybrid tax incentives – other countries offer 50-75% of EV tax breaks to HEVs

While other countries are pushing buyers towards hybrids as a way to reduce carbon emissions – especially with rising fuel prices and as demand for full electric vehicles continues to shrink – Malaysia has been staying stagnant. It’s been nearly a decade since the government provided outright tax breaks for hybrid cars, instead striking customised deals with carmakers that assemble those cars locally.

That won’t do for the Malaysian Automotive Association (MAA), so on top of ending those “customised incentives” and gaining a fairer and more transparent tax system, the organisation is also urging the government to introduce more incentives for hybrid vehicles to bring prices down. This, president Mohd Shamsor Mohd Zain said, would minimise the price difference of electrified vehicles versus regular petrol or diesel cars and allow companies to bring a lot more options to consumers.

Shamsor said that while certain carmakers do get incentives for CKD hybrids, the country still does not have enough hybrid models on sale. He pointed to other countries that provide hybrid vehicles with more than half of the incentives (between 50 and 70%, according to Shamsor) afforded to full EVs. “So definitely that’s encourageable,” he said, adding that the proposal currently being considered by the government is for CKD hybrids only.

Responding to another question from the media about what the industry would like to see from the soon-to-be-revealed 13th Malaysia Plan (RMK13), Honda Malaysia (HMSB) COO Sarly Adle Sarkum reiterated Shamsor’s comments from earlier this year, saying that whatever incentives the government announces must be consistent if carmakers are to invest in Malaysia long-term.

“Consistency is very important for any OEM to plan a long-term programme for any model, because at the end of the day, you decide within a five- to ten-year period, and then suddenly you change, that changes the ballgame for the whole of the industry,” he said.

Shamsor previously said that the government’s prior short-term tax breaks, such as the three-year break for CBU hybrids back in 2011, the two-year extension for CKD hybrids and the ongoing three-year break for CBU EVs, doesn’t allow a sufficient return of any investment.

“In order for our industry to continue growing, the momentum should be longer because that’s where we will be able to have a more significant market before any investments are considered. A short burst of volume is difficult for any principal to plan long-term production of expansion,” he said in January.

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