2023 EVCON: Malaysia Develops Policy Measures To Support Its EV Strategy

As one of the major ASEAN manufacturing hubs for electrical and electronic products, Malaysia is already taking steps to strengthen its position in the electric vehicle (EV) market by developing supportive policy measures.

According to International Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz, he said the country is leveraging its existing EV ecosystem and ensuring a solid talent pipeline to assist the development of the EV industry in Malaysia. 

"All these bode well for investors looking to develop a viable and sustainable EV industry in Malaysia, while helping Malaysia achieve her net zero greenhouse gas emissions by 2050,' he said during inaugural EV Conference 2023 today. 

Through a number of initiatives, as well as numerous tax breaks and other incentives, the government is actually enacting its policy talk of the EV industry. 

This includes providing complete import, excise, and sales tax exemptions for EVs made locally until December 31, 2025, as well as complete import and excise duty exemptions for EVs brought in from abroad until December 31, 2023.

Also, there will be special tax incentives eligible for developing critical components such as the Battery Management System, Battery Pack and Capacity, On-board Charging, Charging infrastructure, and Modular-based Battery Swapping Technology. 

Additionally, EV vehicles will be eligible for road tax exemptions of up to 100% and individual income tax relief of up to RM2,500 on costs associated with buying, installing, renting, hiring out, and subscribing to EV charging facilities. The updated Budget 2023, which will be announced on February 24, 2023 in the Dewan Rakyat, is anticipated to include more EV-related incentives.

The Minister highlighted that Malaysia has a robust EV ecosystem, supported by strong research and development and standard facilities with agencies such as the Malaysian Institute of Standards and Industrial Research as well as a robust component sub-sector that can serve the entire EV value chain, which consists of semiconductors, detectors (sensors), automotive electronics, batteries, and auto assembly.

To take advantage of the EV market, Tengku Zafrul said, the government will also strengthen Malaysia's Technical and Vocational Education and Training (TVET).

"In fact, our Yang di-Pertuan Agong in his speech in Parliament yesterday also expressed support for the continued empowerment of TVET, praising the government's move to encourage public-private partnerships in TVET to ensure a better match of graduates' skills to the current needs of the local industry, ”he stated.