Malaysia’s EV Sales Will Quadruple This Year - BMI

Despite Malaysia's low 1.8% EV penetration rate, BMI, a Fitch Solutions company, predicts that the country's EV sales will quadruple in 2023.

The local EV manufacturing setup by Volvo and Mercedes-Benz, according to a note from BMI, will increase demand for EVs in the nation.

“Mercedes-Benz plans to have 30% of all its vehicles sold in Malaysia electrified by 2030, as Malaysia offers one of the highest EV penetration rates for its products globally.

“Malaysia has witnessed a large number of automakers entering the market, giving consumers more choices,” said BMI.
It stated that Neta, an EV brand manufactured in China by Hozon New Energy Auto, has also entered the local market and that Tesla has agreed to establish a regional headquarters and service facility in Malaysia. 

A draft of Proton Holdings Bhd's electrification road map was made public at the same time, according to BMI, and it included hybrid, plug-in hybrid, and full battery EVs.

Additionally, the government announced the extension of the complete excise tax and sales tax exemptions for completely knocked down (CKD) and completely built-up (CBU) EVs until December 2027, as well as the extension of the total import duty exemption for components used in locally assembled EVs until December 2025.

As the cost to buy EVs is reduced, better competition against internal combustion engine cars will result, according to BMI, which believes these measures will contribute to overall higher EV sales in the upcoming years. 

It added that the move would also draw new automakers into the market. The exemption of duties on parts for EVs would encourage local EV production by incentivizing automakers that are already based in Malaysia to electrify their model lineups.

Up until 2032, income tax is completely waived for EV charging infrastructure manufacturers with offices in Malaysia. Commercial EVs are also gaining traction in Malaysia, thanks to the arrival of Volvo's commercial heavy trucks, according to the report. 

Malaysia has set a target of 100,000 EVs on the road by 2030, with 50,000 of them being commercial EVs.  To encourage EV adoption in Malaysia, the government announced that EVs would be exempt from road tax until December 31, 2025.