Govt Exploring Fresh Measures to Support EV Growth Post 2025

Malaysia is reviewing new ways to sustain electric vehicle (EV) adoption beyond 2025, as the current tax breaks for fully imported models draw to a close.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz confirmed that discussions are ongoing between his ministry and the Ministry of Finance (MOF) to identify fresh measures that can keep the EV transition on track once excise duty exemptions for completely built-up (CBU) EVs expire at the end of next year.

“There are ongoing discussions with the MOF, but no proposals have been made yet,” he said during the 10th ASEAN–OECD Good Regulatory Practice Network meeting, as reported by Bernama.

The government’s latest fiscal outlook projects excise duty collections to rise 2.3% to RM12.79 billion in 2026, from RM12.51 billion this year, an increase partly attributed to the end of EV tax exemptions. The Finance Ministry’s report noted that higher collections will also be supported by moderate vehicle production, new model launches and stronger promotional campaigns.

While no replacement scheme has been announced, the industry is already voicing concern that momentum could stall if policy support fades too quickly. In its Budget 2026 response, the Malaysian Automotive Association (MAA) urged Putrajaya to maintain some form of incentive for CBU EVs, arguing that the local market is still at a formative stage.

The MAA said it supports the government’s longer-term focus on local EV assembly and manufacturing, but warned that removing all CBU incentives at this stage could slow adoption and weaken consumer confidence. 

It added that EV policies should remain adaptive to fast-moving global trends and technology shifts to ensure Malaysia remains competitive and appealing to investors.

Under current policy, tax exemptions for imported EVs end on Dec 31, 2025, while those for locally assembled (CKD) EVs remain in place until end-2027.

EV Price Projection For 2026

Malaysia has set ambitious goals for its EV journey, targeting 20% of new vehicle sales to be electrified by 2030, 50% by 2040, and 80% by 2050. Achieving those milestones will depend not only on infrastructure and affordability, but also on the policy stability that gives both automakers and buyers confidence to commit.