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After RM3.3B In Forgone Taxes, MITI Signals End Of 'Free Ride' As New EV Levy Studied

Sofea Najmi

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If you've been eyeing a shiny new electric vehicle (EV) or already drive one around Klang Valley, you might want to brace your wallet.


The Malaysian government is officially studying a new sales levy on every EV sold in the country. The goal? To build a dedicated fund for expanding Malaysia's public EV charging network.


During a Dewan Negara sitting on Tuesday, Investment, Trade and Industry (MITI) Minister Datuk Seri Johari Abdul Ghani dropped a truth bomb that left many automotive observers stunned: Malaysia forgave a massive RM3.3 billion in tax revenues over the past four years to spur EV adoption, yet public charger investments completely fell flat.


"The Investment Simply Wasn't There" 


For the last four years, Malaysia rolled out the red carpet for imported (CBU) EVs with full exemptions on import duty, excise duty, and sales tax. The hope was that auto companies would reinvest their profits into building charging stations across highway stops, malls, and residential zones.


Chargesini-Pekin-80DC-Caricarz-(1).jpg


Instead, Malaysia ended up with plenty of high-tech cars on the road, and a severe shortage of plugs.


"After four years, when we looked for public charging stations, the investment from EV industry players was simply not there," Johari stated frankly in Parliament.


Because Putrajaya cannot afford to throw taxpayer money at a China-scale charging rollout on its own, MITI says car manufacturers and distributors can no longer expect a "free ride" without contributing to basic infrastructure.


Read: How To Buy Your First Electric Car Without Regrets: A Complete First-Timer's Guide


Live In A Condo Or PPR? The Minister Hears You 


home-charger-chargesini.png


If you live in an apartment, condominium, or People's Housing Programme (PPR) flat, you already know the pain: owning an EV without a private home charger feels almost impossible.


Johari explicitly highlighted high-rise residents as the primary victims of the current charger deficit. Without accessible public chargers nearby, EV ownership remains restricted to landed home owners who can plug in overnight.


Proceeds from the proposed EV levy would go directly into a dedicated fund to accelerate public charging hubs, especially in high-density residential areas.


Read: Is Malaysia Being Too Strict? How We Compare To Thailand’s 'EV Hub' Strategy


CBU vs CKD: M'sia Is Cracking Down On Foreign Brands 


The end of the import tax holiday means the era of cheap fully imported (CBU) EVs is officially winding down. However, locally assembled (CKD) EVs will retain tax exemptions until December 31, 2027.


Why the distinction? MITI is taking a firm stance on foreign manufacturers.


"If companies bring in all their components from overseas, assemble and sell vehicles here, and expect incentives, we cannot allow that," Johari warned.


To get future government perks, car brands must integrate local Malaysian vendors into their supply chains, following the footsteps of Proton and Perodua, which support a massive network of 733 local Tier-1, Tier-2, and Tier-3 manufacturers.


Read: MITI Won’t Cap EV Charging Rates: What "No Price Control" Means For Malaysian Drivers

Frequently Asked Questions

Why is the Malaysian government considering a new EV levy? +

The Investment, Trade and Industry Ministry (MITI) is studying a sales levy on every new electric vehicle sold to establish a dedicated public charging fund. This mechanism ensures that nationwide infrastructure can grow sustainably without relying solely on vehicle manufacturers or distributors.

What does the RM3.3 billion in forgone taxes actually mean? +

Over a 4-year period, Putrajaya waived import duties, excise duties, and sales tax for imported completely built-up (CBU) EVs to encourage market entry. This resulted in RM3.3 billion in uncollected tax revenue. Minister Datuk Seri Johari Abdul Ghani revealed that despite these massive incentives, private sector investment in public charging infrastructure remained far below expectations.

Will imported (CBU) EVs and locally assembled (CKD) EVs be treated differently? +

Yes. Full tax incentives for imported CBU EVs have ended. However, tax exemptions for locally assembled (CKD) EVs will continue until December 31, 2027. MITI emphasized that future perks will strictly reward car companies that build local technology and support Malaysian vendor supply chains (similar to Proton and Perodua’s 733 local suppliers).

How will the public charger fund help condo and PPR apartment residents? +

Lack of home charging access is the biggest barrier for non-landed property residents. The fund raised from the proposed EV levy will be used to deploy accessible public charging hubs in high-density communities, ensuring apartment and PPR dwellers are not left behind in Malaysia's transition to electric mobility.

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Written By

Sofea Najmi

A Bachelor of English Language and Literature graduate with an obsession for the finer details. Sofea uses her background in translation to decode the technicalities of automotive innovation. She is dedicated to delivering impactful, meticulously researched articles that provide a narrative far beyond the spec sheet. LinkedIn: https://bit.ly/3C018vv

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JPJ Running Numbers

KUALA LUMPUR

VRQ6151

SELANGOR

BST8114

JOHOR

JE4681J

PULAU PINANG

PSF6548

PERAK

APL5631

PAHANG

CFH7695

KEDAH

KGJ1759

NEGERI SEMBILAN

NEL9174

KOTA KINABALU

SJU1845

KUCHING

QAB5848P

Last updated 22 Sep, 2026

Fuel Price

Petrol

RON 95

RM 3.97

+1.38

RON 97

RM 4.90

+1.75

RON 100

RM 7.20

+2.20

VPR

RM 8.23

+2.00

Diesel

EURO 5 B10

RM 5.12

+2.08

EURO 5 B7

RM 5.32

+2.08

Last updated 30 Apr, 2026

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