Higher CBU EV Taxes, Higher Prices: Auto TIV to Fall 2% in 2026

Malaysia’s total industry volume (TIV) is expected to slip by 2% year-on-year to 774,000 units in 2026, from an estimated 790,000 units in 2025, according to CIMB Securities. The brokerage attributes the softer outlook to rising average selling prices and ongoing policy uncertainty.

That said, demand for national brands such as Proton and Perodua is expected to hold up. CIMB Securities noted that steady first-time buyer demand, the mass-market positioning of both brands, and continued RON95 fuel subsidies under the BUDI95 programme should help cushion the slowdown.

Chinese automakers are also set to deepen their presence in the local market, adding further pressure on Japanese brands. CIMB Securities said aggressive pricing by Chinese players is likely to remain a key lever as they push for greater market share.

One of the main headwinds flagged by the brokerage is the upcoming tax for fully imported electric vehicles (CBU EVs). CIMB Securities expects CBU EVs to face an additional 30% import duty and a 10% excise duty from Jan 2026, once current exemptions come to an end.

However, EVs that enter Malaysia before Dec 28, 2025 will continue to enjoy import and excise duty exemptions, with eligibility determined by the vehicle’s entry date rather than delivery to customers. 

CIMB Securities believes this will largely favour Chinese EV brands such as BYD, Zeekr and XPeng, helping to support non-national vehicle demand in the first half of 2026.

In contrast, locally assembled (CKD) EVs will continue to benefit from tax exemptions until 2027. Against this backdrop, CIMB Securities expects national brands to gain further ground in the EV space from 2026 onwards, especially following the recent launch of Proton’s e.MAS 5 and Perodua’s QV-E.

EVs accounted for 4.1% of new vehicle sales in the first nine months of 2025, up from 2.4% a year earlier. Combined EV and hybrid sales jumped 45% year-on-year to 47,783 units, making up 8.2% of total industry volume during the period.

Separately, CIMB Securities said the Ministry of Finance has informed the Malaysian Automotive Association (MAA) that the revision to the open market value (OMV) calculation methodology has been pushed back by six months to July 2026, from the original Jan 2026 timeline.

The brokerage views the deferment as short-term relief for the industry, particularly for manufacturers with greater exposure to local assembly, including Japanese and European brands.

Source: Berita Harian