Chinese EV Brands Lead Price War As Tax Deadline Nears

Malaysia’s EV market is bracing for a shake-up as the government prepares to decide whether it will extend tax exemptions for fully imported electric vehicles (CBUs), which are currently set to expire by the end of 2025.

According to BIMB Securities Research, the industry is already reacting ahead of the decision, mirroring trends seen in China’s hyper-competitive EV space, Berita Harian has reported.

BYD recently launched its 2025 Atto 3 Ultra at RM123,800, slashing RM26,000 off the previous model’s price. Early buyers were offered an even lower launch price of RM118,800 for the first 1,000 units, putting it on par with the Proton eMas 7 Premium after discount.

“This move sparked an immediate reaction,” said analyst Sabariah Akhair.

Chery quickly followed suit, dropping the price of its Omoda E5 from RM146,800 to RM119,800 in conjunction with the model’s first anniversary and the Hari Raya season.

“This RM27,000 cut shows how the market is adjusting to affordability concerns and anticipating potential policy shifts,” she says, in the BH report.

As the 2025 deadline for tax perks and the RM100,000 floor price under the Approved Permit (AP) system approaches, the industry now finds itself at a crossroads.
Sabariah outlined three possible scenarios moving forward.

In the first, both the AP price floor is scrapped and tax exemptions are extended. “This could open the floodgates for cheaper Chinese EVs, leading to a full-blown price war,” she stated.

Average prices for B- and C-segment EVs could fall by 15-30%, pressuring margins for local players and CKD producers.

The second scenario sees the price floor removed, but tax exemptions ending as scheduled. This, she stressed, may cool demand short-term but avoid a damaging price war, creating a more stable market.

The third, least likely option is a full extension of tax perks for imported EVs beyond 2025.

“This would clash with the government’s goal of growing local production and reducing incentives for domestic investment,” Sabariah says, adding that fiscal constraints and subsidy reforms make this route politically difficult.

Source: BH.