Wake Up: Malaysia’s EV Policy Needs Urgent and Strategic Overhaul!

Honda has officially entered Malaysia’s electric vehicle (EV) market with the launch of its first battery electric vehicle (BEV), the e:N1. But the celebration was accompanied by a sobering message - and it came straight from the top.

During the launch, Sarly Adle Sarkum, President and Chief Operating Officer of Honda Malaysia, made it clear that while the company is ready to support the EV transition, it will not move forward with local assembly (CKD) plans unless the government provides clear and long-term policy guarantees beyond 2027.

As it stands, the current CKD tax exemption for EVs only lasts until the end of 2027. That is not nearly enough time for automakers to recover the significant investment needed to localise production. Sarly noted that a minimum of five years post-2027 is required just to break even - and without an extension or updated roadmap, Honda has no viable pathway to begin CKD operations in Malaysia.

This isn’t just a Honda problem. It’s an industry-wide concern. XPeng, another EV brand eyeing local production, currently has a CKD team on the ground evaluating the Malaysian market. But even they are hedging their bets.

Without clarity from the government, XPeng may very well shift its plans to Indonesia or other neighbouring countries offering longer-term incentives and policy stability.

The uncertainty doesn’t stop there. Excise duties tied to open market value (OMV), which have already been deferred twice, are expected to kick in next year. If implemented, CKD EV prices could surge by 10% to 30%. This would erase any meaningful price advantage over fully imported (CBU) vehicles, making CKD programs not only unattractive but completely unfeasible.

We also need to talk about infrastructure. The government’s promise to roll out 10,000 public EV chargers by the end of 2025 is nowhere close to being fulfilled - only 3,611 have been installed so far. Industry players and charge point operators have slowed their expansion plans, citing the same lack of long-term support and regulatory clarity.

Then there’s the issue of accessibility. The B40 and M40 groups - the majority of Malaysian consumers - have been left out of this so-called EV transition. Current EV models remain out of reach for most households. With no structured incentives for hybrids or other xEV technologies, the government is skipping the crucial transitional steps that would make electrification inclusive, practical, and sustainable.

Honda’s call to action should be taken as a serious warning. This is a major global brand, willing to invest, innovate, and support national targets - but only if the government can meet them halfway with policies that are credible, long-term, and consistent. 

Right now, Malaysia is not providing that.

It’s time for the government to wake up and buck up. Enough of short-term incentives and ambiguous deadlines. What happens after 2027? What’s the roadmap for the next 10 to 15 years? Will hybrids and PHEVs be supported as a stepping stone? Will EV incentives be extended to accommodate a broader segment of Malaysians?

We cannot afford to be vague any longer. The region is moving. Thailand, Indonesia, Vietnam - all are committing real money, real policy, and real infrastructure to their EV futures.

Malaysia must do the same. Otherwise, we risk falling behind permanently - not just in EVs, but in the entire future of mobility.