MAA 2026: CKD EVs Will Win, Hybrids Will Grow & ICE Isn’t Dead Yet

2025 has been a year of recalibration for Malaysia’s automotive sector, marked by a slow Q3 followed by an aggressive rebound driven by promotions stretching from Oct into year-end.

According to Malaysian Automotive Association (MAA) president Mohd Shamsor Mohd Zain, carmakers pushed hard to unlock pent-up demand amid policy uncertainty, while EV buyers were spurred by the looming expiry of tax incentives at year’s end.

Speaking on BFM, Mohd Shamsor noted that the late-year EV rush was largely driven by perceptions around the Dec 31 deadline. However, MAA has since clarified that for fully imported (CBU) EVs to qualify for the current tax exemption, vehicles only need to enter Malaysia by Dec 28, not be registered.

This means buyers need not rush registrations, easing some year-end pressure.

The government, meanwhile, is actively engaging MAA and carmakers on a revised excise duty framework, now delayed until June 2026, with discussions focused on fair cost calculations across different business models.

The aim, Mohd Shamsor said, is to minimise sharp price corrections and maintain relative price stability into 2026. Against this backdrop, Budget 2026 is expected to have only a modest impact on overall demand, with measures like a potential scrappage scheme likely to benefit national makes (Proton and Perodua) more than the wider market.

EV adoption still has significant headroom. As of Oct, Malaysia’s EV penetration still trails Thailand and Indonesia by around 4%, while EVs made up just 5.5% of total industry volume (TIV) in Sept and about 8–9% when including xEVs.

Beyond 2025, buyers set on going electric are likely to gravitate towards CKD offerings, which remain price-competitive, while those prioritising driving range will continue to favour the growing number of hybrid offerings. 

More cost-sensitive consumers are expected to stick with ICE models given the low RON95 fuel price and ample 300-litre monthly allowance. At the same time, EV range anxiety remains a perception issue that requires greater public awareness and education.

Extending CKD EV incentives beyond 2027 would also help attract further investment and expand local offerings.

Looking ahead, Mohd Shamsor expects 2026 to deliver steady but cautious growth rather than a sharp demand spike, supported by new model launches from both national and non-national brands and continued outlet expansion to offer better service to buyers.

Risks remain, including global economic uncertainty, trade tensions and semiconductor disruptions, reinforcing the need to deepen Malaysia’s EV talent pool, strengthen Tier-1 supplier capabilities, boost exports to ASEAN and accelerate automation and Industry 4.0 adoption.

From Carz.com.my’s perspective, it is also notable that with the year drawing to a close, there has still been no official announcement on a new EV incentive to replace the current tax holiday.

This is despite earlier assurances from former Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz, who confirmed that MITI and the Ministry of Finance are still in discussions on fresh measures to sustain EV adoption once CBU EV excise duty exemptions expire.