The Malaysian Finance Ministry has confirmed during the tabling of Budget 2023 that the current EV tax exemption (import and excise duty) for fully imported (CBU) electric vehicles (EVs) will be extended until December 31, 2024. Previously set to expire on December 31, 2023, the exemption has been extended by one year.
The import and excise duty exemption for CBU EVs was proposed in Budget 2022 and only applies to fully-electric vehicles and excludes hybrid vehicles. Locally assembled (CKD) EVs like the Volvo XC40 Reharge P8 enjoy even more tax incentives. However, even with the tax exemptions granted by the government, EVs still remain relatively expensive with the cheapest option currently available being the electric Hyundai Kona e-Lite that retails at RM 156,538, inclusive of SST.
Along with the extension of the tax exemption the government has also announced that the Approved Permit (AP) fee for EVs will be waived until December 31, 2023. This will only affect grey importers (Open APs) who must pay a RM 10,000 AP fee, and does not affect authorized distributors who use a different Franchise AP. Several grey import EVs that can already be seen in Malaysia include the Polestar 2, Tesla Model 3, Tesla Model Y, Honda E, and Mercedes-Benz EQV.
To further encourage EV adoption, the government is also waiving the tax on statutory earnings for EV charging equipment manufacturers by 100% from 2023 to 2032. There is also an investment tax allowance of 100%.
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As for road tax, EVs are currently enjoying a road tax waiver that will supposedly end in December 31, 2025. Had the waiver not been proposed, the road tax for EVs is calculated based on the maximum power output of the powertrain. For example, the MINI Cooper SE has a supposed road tax of RM 724 due to its 135 kW (183 hp) power output.
Besides the extended EV tax exemption and the other intitaives mentioned abovem the Malaysian government has also announced a RM 3 billion fund for green technology (including EVs) and RM 330 million to develop EV infrastructure.
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