LOKE: MOT Will Announce New EV Road Tax Structure Next Month

The Ministry of Transport plans to announce the new road tax rates for electric cars (EV) by the end of April 2024, according to Minister of Transport YB Anthony Loke Siew Fook.

This comment was delivered at the signing ceremony for the memorandum of understanding (MoU) between WTC Automotif and GAC Motor at MITEC KL for GAC vehicles CKD production plans.

Loke also stated that the road tax structure is in the final stages of refinement and that the proposed rates will not be prohibitive because the primary purpose is to encourage increased adoption of EVs throughout the country.

He also noted the problem the ministry is having in developing a structure for a vehicle that has no cubic capacity, as EVs are largely distinguished by battery voltage and motor output.

Despite the current low usage of EVs, he expressed confidence in the growing trend of EV adoption, particularly if vehicle makers and distributors work together to sell EVs at more competitive costs.

As we at CariCarz.com have repeatedly stated, Loke finally emphasised the importance of establishing this road tax framework quickly, as a large number of potential EV owners are still on the fence and are hesitant to embrace EVs due to concerns that the current road tax structure is significantly higher than that of internal combustion engine (ICE) vehicles.

As a result, the ministry is committed to ensuring a reasonable tax rate for EV customers, which is consistent with the government's goal of encouraging long-term EV use. Loke had earlier postponed the new EV road tax rate announcement, which was scheduled for December 2023, because he was dissatisfied with the proposed structure, with some areas of the structure still requiring improvement.

To put things into context, the present formula would result in a road tax rate of RM903 for a Chery E5 SUV with a 150kW motor, the latest EV offering from Chery Malaysia. However, a new, more efficient 1.6-liter turbocharged SUV with equivalent output would only cost RM120 in road tax, whilst any ICE SUV with a 2-liter engine delivering 150kW (201HP) would cost RM440.

Loke has previously stated that the new EV road tax system will be highly competitive when compared to ICE vehicles in order to encourage people to transition to these more environmentally friendly means of transportation.

Malaysians are now enjoying an EV road tax holiday, as the Road Transport Department (JPJ) declared on Feb 15, 2022 that EVs will be totally exempt from road tax beginning Jan 1, 2022 and ending Dec 31, 2025. However, this exception does not apply to hybrid vehicles.