Malaysia extends tax exemptions for imported (CBU) EVs through late December 2025

Malaysia’s electric vehicle market has been given a last-minute reprieve on tax incentives, with fully imported electric vehicles (CBU EVs) eligible for import and excise duty exemptions as long as they arrive in the country before 28 December 2025. This comes amid the scheduled end of EV tax breaks at the close of the year, which is expected to raise prices for imported EVs starting 1 January 2026.

Entry Date Matters More Than Delivery

According to Malaysian Automotive Association (MAA) president Mohd Shamsor Mohd Zain, what determines eligibility for the incentive isn’t when the vehicle is delivered to customers, but when the car physically enters Malaysia and is declared to customs. As long as that declaration happens before the 28 December cut-off, the EV will keep its exemption, even if it’s handed over to buyers after that date.

This clarification has encouraged manufacturers and distributors racing to get stock into the country before the deadline, especially as the incentive has already been extended twice since its original expiry in 2023. The prospect of the incentives ending has sparked a notable surge in EV purchases in November and December 2025, with buyers and dealers looking to capitalise on tax-free pricing before the deadline. The MAA expects the National Automotive Association’s total industry volume (TIV) to exceed 800000 units this year, buoyed in part by this end-of-year activity.

What’s Next for Malaysia’s EV Landscape

The broader shift in policy is seen as part of Malaysia’s transition toward greater local electric vehicle assembly and manufacturing. Industry observers suggest the change may accelerate plans by automotive brands to produce EVs domestically, a move that could help stabilise prices once tax breaks fade and place Malaysia in a stronger position within the regional EV market.

As the tax incentive period winds down, the focus now turns to how quickly local assembly (CKD) electrified models, which still enjoy tax advantages through 2027, can scale up and maintain growth momentum into 2026 and beyond. We also recently wrote an article on the Best CBU EV deals in 2025 and CKD EVs to look out for in 2026, so check it out while you're at it. Stay tuned for more trending tech news at TechNave.com.