MAA: Longer BEV Incentives, Hybrid Relief on Budget 2026 Wish List

The Malaysian Automotive Association (MAA) is urging Putrajaya to extend tax breaks for battery electric vehicles (BEV) beyond current deadlines, saying the move is crucial to keep sales momentum and attract long-term investment.

At present, imported BEVs are exempted from import and excise duties until end-2025, while locally assembled models enjoy full exemptions, including sales tax, until 2027.

MAA president Mohd Shamsor Mohd Zain told Bernama the association has proposed pushing the incentives to 2027 for fully imported cars and to 2030 for locally assembled units.

BEVs accounted for just 4% of total vehicle sales in 1H25, though volumes nearly doubled compared with the same period last year. “The numbers are rising, but we’re still at a very early stage. Without continued support, it will be difficult to sustain the growth we’re seeing,” Shamsor said.

He noted that imported BEV models often bring the latest technology and safety systems, which help convince buyers to switch from petrol cars. Extending the incentives, he added, would also accelerate charging infrastructure development. Malaysia had 4,161 charging bays at end-Mar, with the government targeting 10,000 by year-end.

Chinese automakers, which have been expanding aggressively in Malaysia, would also be more likely to commit to local assembly if policies remain supportive. This could generate new jobs, particularly for graduates from the Technical and Vocational Education and Training (TVET) system. 

To date, aside from Geely through Proton, only Chery, BYD and Leapmotor have confirmed CKD operations for 2026.

Beyond BEVs, MAA is also seeking tax relief for hybrids. It has proposed a 75% reduction under the Customised Incentives Scheme (CIS) for locally assembled hybrid electric vehicles (HEVs) until 2027. 

Shamsor said hybrids could serve as a bridge technology, easing the transition to full electrification while addressing concerns over charging times, limited bays and range anxiety.

Malaysia aims for electrified vehicles, or xEVs, to make up 15% of total industry volume by 2030 and 38% by 2040. The category includes BEVs, HEVs, plug-in hybrids (PHEVs) and hydrogen fuel cell vehicles (FCEVs).

Prime Minister Datuk Seri Anwar Ibrahim, who is also Finance Minister, will table Budget 2026 in Parliament on Oct 10.

EV Roadtax set to come into play in Jan 2026