Malaysia is entering a new phase in the development of its electric vehicle (EV) industry as several tax incentives that previously supported the market are scheduled to end by the close of this year.

Simultaneously, the government plans to introduce a road tax specifically for EVs, signalling a change in its approach to green mobility.

Local manufacturers, including Proton with its e.MAS 7 and e.MAS 5 models, have reported market interest, while Perusahaan Otomobil Kedua (Perodua) is expected to launch its QV-E model later this month.

Experts have indicated that these policy changes could affect the country's EV market.

Datuk Dennis Chuah, president of the Malaysia Electric Vehicle Association (EVAM), stated that the changes will have a short-term impact, particularly on fully imported completely built-up (CBU) EVs, which currently benefit from duty exemptions until 31 December 2025.

He emphasised that brands aiming to remain competitive in Malaysia after 2025 must develop a clear completely knocked down (CKD) strategy, including investment plans and technology transfer to the local ecosystem.

"The EV road tax commencing in 2026 has been set lower than the previous structure, remaining in the range of a few hundred ringgit. Therefore, although users will begin paying road tax, the amount remains small in comparison to petrol maintenance and regular servicing costs," he explained.

Chuah further noted that once duty exemptions for CBU vehicles expire at the end of 2025, the premium CBU EV segment, which currently relies on these incentives, may experience price increases due to the reimposition of import duties and excise taxes.

He stated that competition is likely to occur in the sub-MYR 100,000 (US$ 24,100) EV segment, where market price pressures and the influx of models from China and other international brands could help maintain affordability.

Chuah noted that Proton and Perodua, which are preparing to launch new models, will be active in the affordable EV segment.

"These manufacturers operate under CKD frameworks that continue to benefit from incentives until 2027, and local vendor networks can be developed to cover batteries, motors, power electronics, and chassis components. This enables Proton and Perodua to offer EVs at competitive prices compared with imported CBU models while supporting domestic employment and investment," he stated.

Datuk Shahrol Halmi, president of the Malaysian Electric Vehicle Owners Club (MyEVOC), noted that EV prices in 2026 remain uncertain, particularly with the termination of import duty and excise exemptions for imported EVs.

He raised questions regarding the MYR 100,000 base price for CBU vehicles and the impact of new open market value (OMV) calculations on excise duty amounts.

"The EV market in 2026 is expected to be dominated by Proton and potentially Perodua, depending on the reception of the QV-E model and the speed at which Perodua can scale up production. Other brands, including BYD, Chery Automobile, and Leapmotor Technology, have announced plans to assemble selected EV models locally and may offer models at lower prices than their current line-ups," he elaborated.

Regarding support infrastructure for the EV industry, Shahrol noted that Malaysia is unlikely to achieve its target for public EV charging points by the end of 2025, despite demand from charging centre operators.

He indicated that there is a risk that the country's EV charging infrastructure may not meet requirements, particularly along major highways.

"MyEVOC urges the government to review the implementation of infrastructure to ensure EV charging networks expand in line with EV sales. One potential measure is to assign this mandate to the Council of Prominent Automotive Figures," he concluded.