In a bid to support wider EV adoption, Malaysia is considering imposing a levy on every electric vehicle sold. The funds would go toward building public charging stations.
Johari, a government official, highlighted the need for a dedicated fund. He said that vehicle manufacturers and distributors alone could not handle the investment required for a nationwide charging network.
Over four years, Malaysia granted exemptions on import duty, excise duty and sales tax for completely built-up EVs. This led to RM3.3 billion in lost tax revenue. Despite these incentives, investment in public charging stations did not meet expectations.
The government has decided not to extend these incentives for imported EVs. However, it has retained tax exemptions for completely knocked down EVs until Dec 31, 2027. This is meant to continue supporting the domestic EV industry.
BYD's Uncertain Investment
Chinese EV maker BYD's planned investment in Tanjung Malim remains uncertain. The ministry has not received official confirmation on whether BYD will proceed with the project under the set conditions.
BYD must export at least 80% of the cars produced at the plant and price the remaining 20% above RM200,000 per unit. Any changes to the investment are a commercial decision for the company.
Conditions for EV Incentives
Johari stated that incentives will only be given to companies that contribute to Malaysia’s automotive ecosystem. This includes integrating local suppliers and supporting domestic vendors and component manufacturers.
Proton and Perodua have developed a network of about 733 vendors. These vendors account for between 72% and 82% of the country’s automotive component manufacturing activities. Malaysia remains open to EV investments, provided they boost economic value through local vendor development, technology transfer and high-skilled jobs.