Budget 2026: MAA Cautions Against Early End to EV Tax Breaks

The Malaysian Automotive Association (MAA) is calling on the government to keep supporting electric vehicles (EVs), even as tax exemptions for fully imported battery EVs are set to end on Dec 31, 2025.

In its response to Budget 2026, MAA said it agrees with the government’s plan to grow local EV assembly and manufacturing but warned that Malaysia’s EV market is still at an early stage. 

Without continued incentives for CBU offerings, the association said it will be harder to maintain sales growth and convince more Malaysians to make the switch to electric.

MAA added that EV policies should keep up with fast-changing technology and global trends to ensure Malaysia remains competitive and attractive to investors. It said a flexible policy that supports both imported (CBU) and locally assembled (CKD) EVs is important to keep the momentum going.

Beyond EVs, MAA welcomed the government’s plan to introduce Lemon Law provisions under the Consumer Protection Act 1999. It said clear definitions, fair complaint procedures and proper public awareness will be key to making the law effective.

The association also praised the road tax and excise duty exemptions for taxi and e-hailing drivers buying new Proton and Perodua cars. It said the move would ease financial pressure on small business owners while supporting national carmakers.

MAA further supported the RM4,000 grant for vehicle owners who scrap cars older than 20 years and buy new national models. It said the programme could help build the foundation for a future End-of-Life Vehicle (ELV) policy and suggested extending it to include other locally assembled cars.

On the government’s plan to cap vehicle prices at RM300,000 in Langkawi and Labuan, MAA said it understands the intention to prevent misuse of duty-free status but encouraged continued dialogue to ensure fair and sustainable implementation.