Road Tax Reform Brings EVs Into Mass-Market Range

From Jan 1, 2026, when the current tax holiday ends, Malaysians driving electric vehicles (EVs) will no longer face punitive road tax rates. Most mass-market models will pay under RM200 annually, putting them in line with popular petrol and hybrid cars.

Transport Minister Anthony Loke announced in Dec 2024 that the new formula, based on motor output, represents an 85% cut from the outdated pre-2022 structure. He said the goal is to accelerate EV adoption while keeping the system progressive, with higher-powered luxury models taxed more. 

The rates will be reviewed every five years to ensure they remain fair and sustainable.

Complete List of EVs and Post 2025 Road Tax Rates

The Sun recently reported that EV owners could pay anywhere from RM20 to RM850 a year, but that framing overlooks the reality that the vast majority of EVs available to Malaysian buyers such as the Proton e.MAS 7, BYD Seal 6 EV, BYD Atto 2, Chery E5 and MG S5 sit well below RM200.

Only high-performance models like the Porsche Taycan, Tesla Model S, BMW i5 or Zeekr 7X approach the RM850 ceiling, reflecting their much higher output.

Where the confusion lies is in how the tax is calculated. Internal combustion engine (ICE) cars are taxed by cubic capacity, while EVs are taxed by kilowatts. Transport experts warn this “apples-to-oranges” system risks confusing consumers, especially as modern petrol and hybrid cars blur the lines.

For instance, the latest Proton X70 with a 1.5-litre engine pays just RM120 in road tax, on par with many EVs. Hybrids like the Honda City RS and Toyota Corolla Cross also deliver strong performance for under RM200.

At the extreme, the 1.6-litre turbocharged Toyota GR Yaris produces over 250 hp yet pays less road tax than some family ICE, hybrids or EVs with far more modest real-world performance.

Malaysia EV Owners Club president Datuk Shahrol Halmi said the new structure is still a major step forward, ensuring ordinary motorists are no longer penalised for choosing an EV while wealthier buyers of luxury models contribute more.

But experts note that over time, Malaysia should move to an emissions-based model that better reflects environmental impact and performance, rather than relying on two different yardsticks.

The government first waived EV road tax, import duty and excise duty in 2022. Those exemptions end on Dec 31, 2025, with the new reduced-rate system taking effect the next day.

By aligning most EVs with mass-market ICE and hybrids while keeping luxury EVs higher, Putrajaya hopes to strike a balance between affordability, fairness and its wider green mobility agenda.