Tax Incentives, More Charging Stations to Fuel EV Adoption in MY

Data powerhouse Fitch Solutions expects public incentives, such as duties exemption, tax breaks, and drive for more charging stations, to increase the electric vehicle (EV) adoption rate in Malaysia in 2023.

In a report by Technode Global, Fitch said EV sales in the country could jump 45.3% by 2023 and EV ownership could breach the 1% mark by 2024. The current EV adoption rate is at 0.3%.

As for EV-related benefits, owners of EV vehicles do not have to pay road tax and claim a personal tax exemption of up to RM2,500 that can be used for anything related to EV charging and other necessary services. There is also a policy, titled Low Carbon Mobilisation Blueprint, that if followed will put 10,000 charging stations all over Malaysia.

Additionally, the government introduced 100% reduction in import duties for EVs built locally, as well as a suspension of duties, sales tax, and excise duty for CKD (completely knocked down) units. They will also encourage EV adoption among government and GLC (government-linked company) fleets to further widen EV visibility.

Malaysia, one of the top automotive producers in Southeast Asia, is poised to take advantage of a freer leeway when it comes to electric vehicles. Several car companies, many of which either assemble or locally produce EV units, have already announced purely electric two-wheel and four-wheel vehicles for next year. Industrial vehicle manufacturers also followed suit by introducing electric models and electric-powered chassis.

Volvo Car Malaysia, in particular, already launched the XC40 Recharge Pure Electric, a locally produced model. They also want EVs to make up 75% of their total sales by the time 2025 rolls in.