DEMAND for electric vehicles (EVs) in Malaysia will far outstrip that of internal combustion engine (ICE) cars within BMI’s 2023-2032 forecast period.
The research house owned by Fitch Solutions currently forecast total EV sales to quadruple in 2023 although the country’s EV penetration rate (EV sales as % of total vehicle sales) will sit at just 1.8%.
Two measures that will contribute to overall higher EV sales in the coming years while reducing purchase price of EV in relation to ICE cars are the (i) the extension of total import duty exemption for components used in locally assembled EVs until December 2027, and (ii) the full excise tax and sales tax exemptions for completely knocked down (CKD) EVs.
Completely built-up (CBU) duty exemptions were pushed to December 2025.
“In addition to this, the exemption of duties on parts for EVs will stimulate local EV production as automakers that are already based in Malaysia are incentivised to electrify their model line-ups,” BMI pointed out in a Malaysia EV profile report.
“The exemption on EV component duties also serves to attract new carmakers into the market.”
As it is, Malaysia-based manufacturers of EV charging infrastructure are enjoying 100% income tax exemption up to 2032. Moreover, they are also entitled to a 100% investment tax allowance which can be deducted at 100% of statutory income for a period of five year.
“We forecast EV sales in Malaysia to quadruple in 2023 as the presence of local EV manufacturing from Volvo and Mercedes-Benz boosts appetite for EVs locally,” projected BMI.
“The latter has indicated that it plans to have 30.0% of all its vehicles sold in Malaysia electrified by 2030 as Malaysia offers one of the highest EV penetration rates for its products globally. Indeed, Malaysia has also witnessed a large number of automakers entering the market, hence giving consumers more choices.”
Elsewhere, Tesla has agreed to set up a regional headquarters and service facility in Malaysia. It is the first manufacturer that sells directly to Malaysian consumers without any local partner.
For the record, Putrajaya has granted Tesla special concessions under the BVGL (business viability guarantee) scheme which allows Tesla to sell directly to consumers in Malaysia without any local partner.
“More EQ (Mercedes-Benz’s battery electric vehicles series) models would eventually arrive at its Pekan plant but its Malaysia’s CEO (Sagree Sardien) said the next CKD plans have not yet been chosen by the firm,” noted BMI.
Meanwhile, first national car manufacturer PROTON had stated in 2021 that it would enter the EV market at an appropriate time and that it had a planned road map for electrification that included hybrid, plug-in hybrid electric vehicles (PHEVs) and full battery electric vehicles (BEVs).
More recently, Chinese EV manufacturer Neta (main pic) has officially entered Malaysia for the first time with the Neta V being the first model to be offered in the country.
The distribution of Neta vehicles is carried out by the group’s wholly owned subsidiary Intro Synergy Sdn Bhd which is part of the GoAuto Group who had inked an agreement with Hozon New Energy Auto (manufacturer of Neta).
The Neta V Deluxe which has a price tag of RM99,800 without insurance is currently the most affordable EV in Malaysia. – Aug 25, 2023
