Fully imported EVs arriving in Malaysia before Dec 28 will qualify for excise, import duty exemptions: MAA

Fully imported (CBU) electric vehicles which are brought into Malaysia before December 28 this year will still qualify for exemption from import and excise duties even though the tax exemptions are set to end, and their prices are set to increase from January 1, 2026, the Malaysian Automotive Association (MAA) has told Buletin Utama.

The delivery period for CBU EVs could be extended as the key requirement for tax exemption is the timing of the vehicles’ entry into the country, and not the delivery schedule, said Malaysian Automotive Association (MAA) president Mohd Shamsor Mohd Zain.

“The delivery period has nothing to do with the tax exemption. What matters is that the stock must have entered the country this year before December 28, 2025, and be declared to customs,” Mohd Shamsor said in an interview with Buletin Utama.

First announced in October 2021 during the tabling of Budget 2022, the current import duty and excise duty exemption for fully imported electric vehicles has been extended twice.

This was originally set to end on December 31, 2023, before being extended to December 31, 2024 during the first tabling of Budget 2023, and then during finance minister and prime minister Datuk Seri Anwar Ibrahim’s Budget 2023 speech in February 2023.

The tax exemptions for fully imported EVs, which has not been extended beyond the end of this year, has driven a sharp increase in EV sales in the months of November and December as consumers and distributors moved to secure purchases before the deadline, Mohd Shamsor said.

For the automotive industry overall, total industry volume (TIV) is expected to exceed 800,000 units this year, according to the MAA. This growth has been supported by more aggressive promotional activity particularly in the fourth quarter of the year, according to Mohd Shamsor.

“We are hearing that many players from other brands are interested in producing electric vehicles locally. This will accelerate technological progress in the domestic market,” he said. Meanwhile, the Malaysian government is expected to see a 2.3% increase in federal revenue collection, up to RM12.8 billion next year with the end of EV tax incentives.

For 2024, the industry reached a new record of 816,747 units, or 2.1% up on the previous record of 799,821 units in 2023. This year, industry volume leader Perodua is expected to take 44% to 46% of a total industry volume projected to be between 780k units and 805k units.

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