[ UPDATE 24/02/2023 21:00 ] Turns out there are EV-related incentives under the revised Budget 2023. The current tax exemptions for CBU and CKD EVs are extended for another two years.
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During the tabling of the amended Budget 2023, no new EV-related incentives were mentioned by Prime Minister Anwar Ibrahim. One of the major omissions is the previous proposal to extend the exemption of import and excise duties for fully imported (CBU) EVs until 31st December 2024.
The extension of the tax exemptions for CBU EVs was announced by former Finance Minister Tengku Zafrul Aziz in October 2022. With this omission, this means all fully imported EVs would cost significantly more once the current tax exemption ends on 31st December 2023.
Locally-assembled electric vehicles are still exempted from import, excise and sales tax until 31st December 2025. At the moment, only Volvo and Mercedes-Benz have started producing CKD EVs in Malaysia with models such as the XC40, C40 and EQS500.
It is worth highlighting that most sub-RM200,000 EVs sold in Malaysia are currently fully imported. This includes the Ora Good Cat, BYD Atto 3, Nissan Leaf and the Hyundai Kona Electric. Without further exemptions, “cheaper” EVs will cost a lot more unless more carmakers start local production of electric vehicles.
MITI has recently revealed that it is discussing with Proton and Perodua to expedite the local production of EVs and introduce cheaper EV options for Malaysians. Perodua is currently prioritising hybrid vehicles while Proton is only planning to introduce its first EV in 2027. Proton has also signed a distributor agreement to sell fully imported Smart #1 EVs in Malaysia but sales are only expected to begin in Q4 2023.
[ UPDATE 24/02/2023 21:00 ] MOF has confirmed in their Budget 2023 touchpoints that tax exemptions for CBU EVs are extended until 2025 while tax exemptions for CKD EVs are extended until 2027. More details here.
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