The Malaysian government has confirmed that there will be no extension of the electric vehicle (EV) road tax exemption beyond its current deadline. Originally introduced on 1 January 2022, this exemption was aimed at encouraging EV adoption across the country. However, as announced by minister of trade Tengku Zafrul Aziz on 25 February 2025, the exemption will officially end on 31 December 2025 with no further extensions planned.
With the exemption period coming to a close, EV owners will need to factor road tax costs into their annual budgets starting 1 January 2026. Unlike traditional internal combustion engine (ICE) vehicles, which are taxed based on engine capacity (cc), the road tax for EVs in Malaysia is calculated based on maximum motor power output (kW).
In June 2024, the ministry of transport introduced a revised EV road tax structure, which will take effect in 2026. This updated framework is more affordable than the previous system, ensuring that rates increase gradually based on power output.
Below is an example of how the road tax would be calculated for EVs.
| Power Ouput kw) | Estimated Road Tax (2026) |
| 50kw and below | RM 20 – RM 40 |
| 51 – 100kW | RM 40 – RM 100 |
| 101 – 150kW | RM 100 – RM 200 |
| 151 – 200kW | RM 200 – RM 500 |
| 201 – 300 kW | RM 500 – RM 1,500 |
| 301kW and above | RM 1500 and above |
Based on the table above, an EV with a 150 kW motor, which previously incurred a road tax of RM1,024, will now be taxed at RM160 – a significant reduction under the new structure.
The Malaysian Automotive Association (MAA) had earlier urged the government to extend the EV road tax exemption and even include hybrid vehicles under the incentive. However, despite these recommendations, the government has decided to proceed with the planned cessation of the exemption.
As the deadline approaches, both current and prospective EV owners are encouraged to familiarise themselves with the new tax structure. Understanding these changes will help in making informed decisions about EV ownership and financial planning.
While the end of the tax exemption signals a shift, the revised tax rates remain more accessible and reasonable than before. This move reflects the government’s commitment to balancing fiscal responsibility with the continued promotion of sustainable, green technology in Malaysia.
In summary, while EV owners will soon have to pay road tax, the updated structure ensures fairer pricing, making EVs an attractive option for the future of Malaysian mobility.
(Source: Autofreaks)
