MAA wants more hybrid incentives: long-term policies for new investments, not short bursts like before

The Malaysian Automotive Association (MAA) will continue to engage with the government on incentives for hybrid vehicles. This is to support the government’s target of having electrified vehicles (xEVs), which include both hybrids and battery electric vehicles (BEVs), make up 50% of new car sales by 2040.

“As far as the MAA is concerned, we want to continue to advocate the need and necessity of hybrid vehicles for the government to consider,” said MAA president Mohd Shamsor Mohd Zain during a press conference following the association’s recent media briefing.

“If you remember, I think in 2014 when we first introduced (locally-assembled) hybrids, there was a big surge (in demand) and after two years, everything start dropping again. 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. So, a short burst of volume is difficult for any principal to plan long-term production of expansion,” he added.

Over a decade ago, the government discontinued tax incentives for fully-imported (CBU) hybrid and BEVs as part of the National Automotive Policy 2014. However, hybrids and EVs that were locally assembled (CKD) in Malaysia continued to enjoy tax breaks until December 31, 2017.

MAA was already pushing for the tax breaks to be extended for CKD electrified vehicles in 2014, which also saw the introduction of Energy Efficient Vehicles (EEVs), a programme that provided customised incentives to carmakers that locally assembled vehicles that met defined specifications in terms of carbon emission level (g/km) and fuel consumption (l/100 km).

The EEV programme has affected the pricing of CKD cars, including hybrids, although not to the degree of being tax-free in the past. In recent times, the MAA proposed new incentives for all types of xEVs, including hybrids, rather than just battery electric vehicles (BEVs).

Looking at the data, sales of hybrid vehicles have increased from 7,875 units in 2021 to 19,988 units in 2022 and to 28,055 units in 2023. Last year saw a nearly 10% increase from 2023 to 30,796 units, which is about 67% of all xEV sales in Malaysia (BEVs made up 14,766 units). The MAA expects stronger demand for electrified vehicles with the impending RON 95 petrol subsidy rationalisation.

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