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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I agreed. gov should reintroduce the hybrid incentive.
Yeap, wish to see Proton Saga Hybrid soon
Buying a hybrid does not make much sense with our cheap petrol. You are unlikely to recoup the higher initial cost and higher maintenance with any petrol savings. Even with the RON 95 petrol subsidy rationalization the situation will not change.
If you’re buying a hybrid to save the planet better go the whole hog and get an EV.
Or maybe most people consider the occasional need to travel longer distances without range anxiety.
Which country?
You’re spot on! Malaysia should have embraced hybrids long before the EV boom. As an oil-producing nation, hybrids allow us to maintain a revenue stream from fuel sales, unlike pure EVs. While hybrids do reduce petrol demand, it’s a more gradual shift that’s economically sustainable for Malaysia. EVs, on the other hand, could eventually cripple petrol demand, which isn’t ideal for our economy. Good thing the price remains prohibitive for majority of Malaysian.
Crucially, the government currently bears a significant cost with petrol subsidies. Continuing to subsidize inefficient, traditional internal combustion engine (ICE) vehicles is a drain on the national economy. Hybrids offer a more efficient alternative to conventional petrol cars, only 10% lower than EVs. This is even more true for PHEV. By encouraging hybrids and PHEV, we can reduce the burden of these subsidies while improving overall energy efficiency in our transportation sector.
From an environmental standpoint, a Life Cycle Assessment (LCA) offers a more complete picture. While EVs boast zero tailpipe emissions, their manufacturing process, particularly the production of large batteries, has much higher initial environmental footprint. This is where hybrids and plug-in hybrids often show an advantage: they use significantly fewer critical battery materials like lithium, nickel, manganese, and cobalt. Studies often suggest that, when looking at the full LCA, the environmental benefit of an EV over a hybrid only truly breaks even after around 200,000 km. This means that for many typical ownership scenarios below that mileage, a hybrid can actually have a lower overall environmental impact.
The challenge for Malaysians is the current high cost of hybrid technology, despite the desire for lower operating costs. We also need to drive innovation in hybrid tech, and acknowledge that some users are simply not ready to go full electric for various reasons, making hybrids a crucial bridge, and our current policy does not help this at all.
Previously, there was excise duty exemption on Hybrids. I did buy one.
Now, without this exemption, the Hybrid becomes the most expensive variant in the brands’ model range.