MITI: Malaysia’s EV Strategy Enters New Phase

Electric vehicle (EV) adoption in Malaysia has picked up significantly, with annual usage rising to 44,813 units in 2025 from just 3,127 in 2022, according to the Investment, Trade and Industry Ministry (MITI).

The details were disclosed in a written reply to P. Prabakaran (PH–Batu), who had asked what measures are in place to ensure Malaysia does not fall behind global EV trends, particularly in the development of local EVs, battery capabilities and smart charging infrastructure by 2030.

According to the government agency, the sharp increase was largely driven by the government’s earlier decision to exempt import and excise duties on fully imported (CBU) EVs from 2022 to 2025. The tax break lowered entry barriers and helped kickstart adoption at a time when the market was still in its infancy.

At the same time, the ministry stressed that the broader direction remains guided by the National Automotive Policy (NAP) 2020, which aims to position Malaysia as a hub for Next Generation Vehicles (NxGVs). Beyond simply bringing in more EVs, the focus is on building up local capabilities.

That includes encouraging the production of key components such as batteries, electric drive motors and advanced driver assistance systems (ADAS), supported by tax incentives for OEMs that invest in these areas.

With the CBU tax exemptions having ended on Dec 31, 2025, several manufacturers have started moving towards local assembly as part of their longer-term plans here. In other words, the easy adoption phase is giving way to a localisation phase.

Charging infrastructure is also expanding. As of end-2025, 5,624 public charging points had been installed nationwide, although this still falls short by 44% of the national target.

Now moving away from MITI’s reply, we would like to reiterate that the real test now is in 2026 as the government on top of subsidies has made it clear that only “quality” CBU EVs that add value to the local ecosystem should be allowed in, while warning against oversupply. 

Add to that the ongoing debate over the RM250,000 floor price for new CBU EVs, and the policy landscape is clearly shifting. Whether adoption can continue climbing under these tighter conditions will be something the industry — and consumers — will be watching closely.

Source: Bernama