Budget 2025: Will CBU EV Prices Skyrocket in 2026?

With Budget 2025 offering no new incentives for fully imported (CBU) electric vehicle (EV), their prices are expected to surge in 2026. This will coincide with the implementation of the new heavily revised EV road tax structure, causing concern for potential EV buyers and industry stakeholders alike.

Listed in the image below is a complete list of EVs currently available for sale in Malaysia, including its corresponding tax-free prices now and the road tax rates owners will need to pay starting 2026.

Local Players Set to Drive Mass EV Adoption, but Affordability Remains A Challenge - The government appears to be banking on Proton and Perodua’s upcoming EV models to capture the mass market, with expectations of more affordable options.

However, with the tax break and the RM100,000 floor price requirement removed, the affordability of entry-level EVs remains in question. Without further incentives or a significant shift to CKD assembly in Malaysia, low-priced imported EVs may remain out of reach for many consumers when the new taxes are factored in potentially leading to a market monopoly by the local brands.

Additionally, for most foreign EV manufacturers, local CKD assembly is not a viable option due to Malaysia's relatively low sales volume, even when compared to regional markets like Thailand. This leaves many brands potentially unable to offer competitive pricing unless there are new long-term policy changes.

The Need for Continued Government Support - While Budget 2025 does not introduce new incentives for the EV sector, there is a growing expectation that the government will have to extend current EV incentives beyond 2025.

Without such measures, mass EV adoption is unlikely to accelerate, and the removal of the floor price will have little impact. The future of Malaysia’s EV market may depend heavily on the government’s willingness to provide continuous support in the form of tax exemptions, subsidies, or other forms of relief to consumers and manufacturers alike.

Infrastructure Challenges; Charging Station Rollout Slowed by Bureaucratic Hurdles - One of the biggest hurdles to EV adoption remains the lack of sufficient charging infrastructure. Although not directly addressed in Budget 2025, there is an urgent need for reforms to streamline the installation of EV charging stations.

Charge point operators (CPOs) have been facing delays and rising costs due to bureaucratic red tape, causing them to scale back expansion plans in Malaysia and instead focus on more promising foreign markets such as India, Indonesia & Thailand.

To sum up, Budget 2025 leaves much to be desired in terms of accelerating the EV transition. Without further government incentives or a stronger focus on infrastructure development, the outlook for EV adoption in Malaysia remains uncertain.

Although local brands like Proton and Perodua may help address the affordability issue, broader challenges such as charging infrastructure and competitive pricing for non-CKD EVs need more robust policy support.