Malaysia’s EV Boom Set to Normalise in 2026

The electric vehicle (EV) story in Malaysia is set to slow a little in 2026, as the market begins to feel the effects of expiring tax incentives and a charging network that is still playing catch-up.

EVs continue to draw interest thanks to competitive pricing, lower maintenance costs and a smoother, quieter drive. But resale value is becoming a growing worry. In a market where buyers place heavy emphasis on what a car is worth down the line, the sharper depreciation seen in EVs could make some motorists think twice.

Last year was a strong one for the segment. EV registrations doubled year-on-year to 44,800 units in 2025, pushing penetration to just over 5% of total vehicle sales. That surge, however, was largely driven by incentives and early adopters rather than everyday buyers.

Charging infrastructure remains a clear bottleneck. Malaysia has fewer than 6,000 public EV chargers nationwide, with fast chargers mainly concentrated in the Klang Valley and along major highways — still well short of the government’s 10,000-unit target.

Competition is also heating up. BYD led the EV market last year on aggressive pricing and a broad model line-up, followed by Proton and Tesla, while newer Chinese brands such as XPeng are starting to carve out a presence. 

Some manufacturers have also stocked up ahead of policy changes, which could delay any meaningful price moves until the second half of 2026.

For now, EV ownership remains largely an urban affair, typically among second-car households, fleet operators and early adopters.

Beyond EVs, the wider automotive market is expected to cool after several strong years. Total industry volume is forecast to ease about 5% year-on-year to around 780,000 units in 2026, although some support could come from the RM10 million vehicle trade-in programme under Budget 2026, according to analysts cited by The Star.

All told, 2026 is shaping up less like a breakout year for EVs and more like a period of consolidation. Early launch activity suggests the market may lean more heavily towards hybrid technologies — whether conventional hybrids (HEVs), plug-in hybrids (PHEVs) or range-extender EVs (REEVs). 

That shift is already visible in the first month of the year, with models such as the Toyota Vios HEV and GWM WEY G9 taking centre stage, while the Proton e.MAS 7 PHEV is expected to follow in early Feb.