Link Copiedcheck_circle
Auto News

Budget 2026: Analysts Split on Lemon Law and EV Tax Shifts

Kumeran Sagathevan

Share via

KPDN-LEmon-Law-(5).jpg


Malaysia’s plan to introduce Lemon Law protection and end tax exemptions for imported electric vehicles (EVs) has drawn differing views from analysts, with some seeing it as a confidence boost while others expect near-term challenges.

According to Bernama, RHB Investment Bank believes that including Lemon Law provisions under the Consumer Protection Act 1999 will help strengthen consumer confidence and raise industry standards. The move, it said, will protect buyers from defective vehicles and promote greater transparency in the market.

RHB added that Proton and Perodua are among the carmakers best positioned to comply due to their strong after-sales networks, established quality systems and production scale. 

It described the move as structurally positive for the industry, but kept a neutral outlook overall, noting that total industry volume (TIV) is expected to moderate as sales normalise and competition among non-national brands intensifies.


Caricarz-TA-Proton-EVPlant-Launch-5-(1).jpg


Meanwhile, Kenanga Investment Bank viewed the government’s decision to end excise duty exemptions for completely built-up (CBU) EVs as a positive development for national brands, which already enjoy higher localisation rates and government purchase incentives.

Starting Jan 1, 2026, imported EVs will face import duties of 10%–30% and excise duties of 50%-100%. Kenanga said this could spur forward buying ahead of the change, supporting its projection of more than 800,000 vehicle sales this year. 

It also noted that new excise duty regulations could lift prices of locally assembled cars by 10%-30% once implemented.

Both banks agree the Budget 2026 measures mark an important step in balancing consumer protection and market competitiveness, though opinions differ on how quickly the industry can adapt.


Tagged:

Kenanga Investment Bank Bhd (Kenanga IB)
RHB Investment Bank Bhd
Budget 2026 Lemon Law
Budget 2026 EV Tax
Share This Article

Written By

Kumeran Sagathevan

More then half his life spend being obsessed with all thing go-fast, performance and automotive only to find out he's actually Captain Slow behind the wheels...oh well!

Share via

Related News

Auto News

Kenanga IB Downgrades Auto Sector - Subsidies, Speculation & Stagnation

Kenanga IB downgrades Malaysia’s auto sector outlook to neutral as market uncertainty deepens.

Auto News

Report: Kenanga IB Maintains 2025 TIV Forecast Of 805,000 Units

Analysts at Kenanga IB maintains its 2025 TIV forecast of 805,000 as it banks on forward buying interest fuelling said figure.

28-01-2025
Auto News

Kenanga IB Projects 805k TIV for 2025, Outpacing Rivals' Forecasts

Kenanga IB forecasts 805,000 TIV in 2025, fueled by strong budget car demand, EV adoption, and robust motorcycle sales.

Auto News

Carmakers Go All Out with Year-End Offers Before EV Tax Ends

Auto brands kick off aggressive promotions to boost sales and hold market share ahead of EV tax changes.

28-10-2025
Auto News

Rising Competition, EV Policy Shift Slows Malaysian Car Market - RHB Investment

More Malaysians are delaying car purchases as foreign carmakers spark price competition, slowing overall sales.

22-07-2025
Auto News

RHB: EVs Hold Promise, But Policy Clarity Is Still Lacking

EVs may lead the charge, but without long-term policy clarity, OEMs are staying on the sidelines says RHB.

Auto News

RHD IB: Budget 2025 Focus On Subsidy Rationalisation & GST Revival

RHB Investment Bank says RON95 subsidy rationalisation and GST revival are needed to narrow the fiscal deficit, free up funds for infrastructure, and address national debt.

Auto News

RHB IB Remains Overweight Call On Automotive Sector

RHB Investment Bank Bhd (RHB IB) maintains its "overweight" rating on the automotive sector.

23-05-2023

Latest News

Auto News

"Not Our Priority" — Minister Reveals The 4 Major Road Crimes JPJ Is Hunting Instead Of Sunshades

Transport Minister Anthony Loke clarifies that JPJ will not target motorists using removable car window sunshades, choosing instead to focus enforcement priorities on illegal racing, mat rempit, drunk driving, and reckless driving.

22-06-2026
Auto News

M'sia Is Moving Toward Barrier-Free Tolls, But Gov Just Dropped One Non-Negotiable Rule

Works Minister Datuk Seri Alexander Nanta Linggi reveals that while Malaysia's barrier-free MLFF toll system negotiations are advanced, the government has set a strict, non-negotiable condition: road users must not pay higher toll fares.

22-06-2026
Auto News

Tolls Are Here To Stay. Minister Explains The Mind-Boggling Financial Nightmare Of Abolishing Them Completely

Works Minister Datuk Seri Alexander Nanta Linggi explains why abolishing tolls would cause a multi-billion ringgit financial nightmare for Malaysia, shifting crucial infrastructure funds away from schools and hospitals.

22-06-2026
Auto News

500k Cars In Just 8 Months?! Leapmotor Has Conquered 40 Countries And Now They're Assembling In M'sia

Leapmotor hits a historic global milestone of 1.5 million vehicle deliveries, adding a stunning 500k sales in just 8 months. See how this 40-country EV giant is scaling up local CKD assembly lines in Gurun, Kedah.

22-06-2026
Auto News

42 Clauses Are Changing: M'sia Is Facing Its Biggest Road Law Overhaul Since 2020, And Yes, It Affects Your Saman

Malaysia is introducing 42 new clauses to the Road Transport Act in its biggest traffic law overhaul since 2020. Here is how it affects your fines and roadblocks.

19-06-2026
Auto News

Good News For 5 Million Perodua Owners! Don't Go To Outside Workshops As Service Prices Just Dropped

Thinking of visiting an outside mechanic? Perodua is slashing overall service maintenance parts and labor costs by 10% nationwide starting 19 June.

18-06-2026
Auto News

It’s Happening! After Years Of Delays, The LRT3 Is Finally Ready To Start Operations

The long-awaited LRT3 Shah Alam Line is officially set to begin operations by the end of this month, as confirmed by Transport Minister Anthony Loke.

18-06-2026
Auto News

No More Just 'Screwing Parts Together', Malaysia Wants Local Talents To Design The Next Big ASEAN Car Tech

At KLIMS 2026, Deputy Transport Minister Datuk Hasbi Habibollah urged Malaysia's automotive industry to evolve from car assemblers into technology creators.

18-06-2026