Financial incentives offered by the Malaysian government drive up annual electric vehicle (EV) usage in the country by 14-fold in 3 years.
THE UPTICK
Malaysia’s Investment, Trade, and Industry Ministry (MITI) revealed that annual EV usage in the country increased 14-fold, from 3,127 units in 2022 to 44,8813 units in 2025.
According to MITI’s response to Malaysia’s Dewan Rakyat or House of Representatives, the staggering improvement can be attributed to the exemption of import and excise duty for fully imported completely built-up EVs. This program ran from 2022 up until the end of 2025.
“In line with the National Automotive Policy 2020, which targets to make Malaysia a production and export hub for Next Generation Vehicles (NxGV), the government continues to encourage the local development of critical EV components,” MITI wrote on Malaysia’s parliament website.
This response was written to answer a House of Representatives member’s question regarding Malaysia’s progress in in EV support.
“[This includes] batteries, electric motors and advanced driver assistance systems (ADAS) through tax incentive provisions to original equipment manufacturers (OEMs) that utilise them,” MITI added.
2026 ONWARD
MITI said the next phase is to encourage more OEMs to begin local EV assembly.
Under the updated policy, OEMs are now required to pay import duties on their CBU EVs. The import duty rate depends on the country of origin and ranges from 5-30 per cent. There is also an additional 10 per cent excise duty and a 10 per cent sales tax.
To support local assembly, CBU EVs must be priced above MYR 250,000 ($90,841 AUD) and have a minimum of 200 kW of motor power per vehicle. These requirements were revealed in early January 2026 in a policy document posted by MITI.
Several foreign brands have already begun local assembly of their EV models, such as Volvo, Chery, BMW, TQ Wuling, and Mercedes-Benz. Both BYD and Stellantis are in the process of developing local assembly of their EVs in line with MITI’s policy changes.
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