Apex Securities noted that EV adoption remained urban-centric.
PETALING JAYA: The strong electric vehicle (EV) momentum is not expected to continue this year with the expiry of tax incentives and lack of infrastructure to support the trend.
Based on data by the Energy Commission, the country has fewer than 6,000 public EV charging points nationwide with direct-current fast chargers mainly concentrated in the Klang Valley and major highways.
According to Apex Securities, this is a limiting factor as it remains well below the government’s 10,000-charger target by end-2025 under the Low Carbon Mobility Blueprint 2021 to 2030.
Road Transport Department data showed EV registrations doubling year-on-year (y-o-y) to 44,800 units in 2025, representing 5.1% of total vehicle registrations from 2.5% in 2024.
However, the segment might have its niche appeal based on competitive pricing, quiet driving experience, low need for maintenance although there are concerns about its resale value in the long term.
An analyst said the nature of car markets in Malaysia was its focus on resale value and as such, this consideration might hinder the further uptake of EVs by the mass market.
“The steep depreciation of EVs may hinder further adoption and we are starting to see this trend in Singapore as well with a recent study by EY suggesting that an increasing number of EV owners would like to return to internal combustion engine vehicles.
“This trend is seen globally as well,” the analyst told StarBiz.
Last year, BYD led the market with 14,407 units registered, cementing its position as the dominant EV player on competitive pricing and product breadth followed by Proton (8,890 units) and Tesla (7,282 units) which continued to attract demand in the premium segment.
In addition, Apex Securities noted emerging Chinese brands such as XPeng (1,536 units) had recorded smaller but rapidly growing registration volumes, which highlighted rising fragmentation and competition within the EV space.
“We understand that several major EV brands front-loaded inventory equivalent to up to four months of sales ahead of the policy change, which should delay any meaningful price revisions until the second half of 2026.
“In the interim, some marques may also absorb part of the cost increase given the intensely competitive EV pricing landscape,” said Apex Securities.
It noted EV adoption remained urban-centric and mostly skewed toward second-car households, fleet operators and early adopters rather than broad-based mass-market penetration.
Meanwhile, the highly competitive environment in the automotive scene could result in a slight moderation in total industry volume (TIV) this year.
Analysts said a reality check could come and the industry would normalise to mean levels of growth this year – resulting in a slight y-o-y fall in the TIV for 2026.
Industry support could come from the RM10mil vehicle trade-in programme under Budget 2026.
It offers up to RM4,000 rebates which is a RM2,000 government grant matched by national cars for owners scrapping vehicles over 20 years old and purchasing new Proton or Perodua models.
“We forecast this year’s TIV to be at 780,000 units (down 5% y-o-y) on post-normalisation effects.
“EV penetration rose sharply in 2025, but 2026 growth is set to moderate due to tax expiry, infrastructure constraints and a shift toward completely-knocked-down-led pricing normalisation,” it said.
