The Ministry of Investment, Trade and Industry (MITI) and the Ministry of Finance (MOF) are currently in discussions to establish new incentives to encourage the adoption of electric vehicles (EVs) in the local scene. This was confirmed by Tengku Datuk Seri Zafrul Abdul Aziz, Minister of Investment, Trade and Industry.
He also added that the alternative initiatives will replace the duty exemptions on completely built-up (CBU) EVs, which are set to be removed from 2026 onwards. “There are ongoing discussions with the MOF, but no proposals have been made yet.”
Malaysia is seeking to carve out new incentives to supplement its growing EV adoption. Specifically, the country aims to have 20% of new vehicle sales electrified by 2030, 50% by 2040, and 80% by 2050.
The excise duty collection is expected to increase by 2.3% to RM12.79 billion in 2026, up from RM12.51 billion this year. According to the MOF’s Fiscal Outlook and Federal Government Revenue Estimates report, the expiry of the tax holiday for CBU EVs will help boost excise duty collection, among other factors.
While the government has been finding alternatives to the removal of duty exemptions for CBU EVs, many brands have started to enter the local assembly (CKD) scene in the local market. One example is MG Motors, which announced that it would begin CKD production of its vehicles starting next year, with the first model being the MG S5 EV.
(Source: Bernama)
