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

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.

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

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.

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

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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Jonathan Lee

After trying to pursue a career in product design, Jonathan Lee decided to make the sideways jump into the world of car journalism instead. He therefore appreciates the aesthetic appeal of a car, but for him, the driving experience is still second to none.

 

Comments

  • Proton Oh Proton on Jul 16, 2025 at 5:31 pm

    I agreed. gov should reintroduce the hybrid incentive.

    Like or Dislike: Thumb up 10 Thumb down 2
  • Manree on Jul 16, 2025 at 8:14 pm

    Yeap, wish to see Proton Saga Hybrid soon

    Like or Dislike: Thumb up 4 Thumb down 2
  • Kenny Gan on Jul 16, 2025 at 9:51 pm

    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.

    Like or Dislike: Thumb up 4 Thumb down 8
    • Or maybe most people consider the occasional need to travel longer distances without range anxiety.

      Like or Dislike: Thumb up 0 Thumb down 0
  • Sabri on Jul 17, 2025 at 6:07 am

    Which country?

    Like or Dislike: Thumb up 2 Thumb down 1
  • Muhammad bin Azmi on Jul 17, 2025 at 8:30 am

    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.

    Like or Dislike: Thumb up 8 Thumb down 1
  • Henry on Jul 17, 2025 at 1:01 pm

    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.

    Like or Dislike: Thumb up 1 Thumb down 2
 

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