It is a known fact that the Malaysian government will not renew incentives for fully imported (CBU) electric vehicles in 2026. However, the Malaysian Automotive Association (MAA) has clarified that CBU EVs arriving in the country before 28 December 2025 will still qualify for exemptions from import and excise duties.
MAA president Mohd Shamsor Mohd Zain said the eligibility for tax exemption is determined by the vehicle’s entry date into Malaysia, not its delivery to customers. “What matters is that the stock must have entered the country before December 28, 2025, and been declared to customs,” he said in an interview with Buletin Utama.
To recap, the tax incentives for CBU EVs were first introduced on October 2021 as part of efforts to accelerate EV adoption in Malaysia. The scheme was subsequently extended on an annual basis through to 2025, but will officially end this year which could result in price increases of at least 30 percent for fully imported EVs.
At the same time, the policy shift has encouraged automakers to accelerate plans for local assembly (CKD) operations. “We are hearing that many players from other brands are interested in producing electric vehicles locally. This will accelerate technological progress in the domestic market,” he added. Several EV brands, including MG Motor, Zeekr, BYD, Leapmotor and very recently Xpeng, announced CKD initiatives in Malaysia.
According to Mohd Shamsor, the impending end of the tax exemption has also contributed to a spike in EV sales in November and December, as consumers and distributors rush to secure vehicles before the deadline. For the broader automotive market, the MAA expects total industry volume (TIV) to surpass 800,000 units this year, supported by more aggressive promotional activity, particularly in the final quarter of 2025.
Meanwhile, as previously reported, the Ministry of Investment, Trade and Industry (MITI) and the Ministry of Finance (MOF) are working together to identify alternative incentives to replace the expiring tax exemptions. Even so, it is clear that Malaysia’s EV landscape will undergo a significant shift from 2026 onwards, with the introduction of new policies, including the planned implementation of road tax for electric vehicles starting next January next year.
(Source: Buletin Utama/ Facebook, Paultan.org)
