CBU EV tax break needs to be extended until 2030 to meet 15% adoption rate target in Malaysia, says MAA

The Malaysian Automotive Association (MAA) has said the current tax break for fully-imported (CBU) electric vehicles (EVs) needs to be extended until 2030 to meet the country’s targeted EV adoption target of 15% of total sales volume by 2030.

“First of all, EVs are still at the infancy stage. There is a need for the government to nurture and support the growth of EVs, especially in terms of incentives. So, the government should consider expanding the present tax incentive, especially for CBU EVs. Our feeling or alignment is at least until 2030, basically in line with the aspiration of the government to meet the 15% EV objective,” said MAA president Mohd Shamsor Mohd Zain.

“The target was 2030, 15% for EVs [of total vehicle sales], so we feel that the incentives should be extended until 2030 to continue the momentum. As far as the MAA is concerned, we will continue to engage and work with the authorities to see if we can do this. Of course, last year there was no announcement because there is still a continuation [of incentives] this year, so we hope that there will be further developments this year,” he added.

At present, CBU EVs are exempted from import duty and excise duty until December 31, 2025, as announced during the tabling of Budget 2023. It was originally set to end in December 31, 2023 before being extended in the first tabling of Budget 2023 to December 31, 2024.

According to the MAA, EV sales benefitted from incentives and the introduction of new models to surged 45% in 2024. However, sales of electrified vehicles, which include both EVs and hybrids, only accounted for 5.6% of last year’s total industry volume of 816,747 units – this is higher than 4.8% in 2023. Locally-assembled (CKD) EVs ae currently exempt from excise duty and sales tax until December 31, 2027, two years more than the original deadline, which was December 31, 2025.

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