Tax incentives for EVs begin today

PETALING JAYA: The nation’s drive to cut down its carbon footprint takes a step forward from today when tax incentives for electric vehicle (EV) ownership, as announced in Budget 2022, kick in.

The move is aimed at paving the way for greater adoption of such zero-emission vehicles.

Malaysian Automotive Association president Datuk Aishah Ahmad said the incentives have managed to bring down the price of EVs although it is still high and beyond the affordability of the B40 group.

“At least we got the ball rolling on the adoption of EVs in Malaysia and are not left behind by regional countries that have implemented their EV programmes much earlier,” she said. Under the move, imported EVs will get full import and excise duty exemption for two years till the end of 2023, while locally assembled EVs will get excise duty as well as sales tax exemption for four years until the end of 2025.

EV owners will also be exempted from road tax and will get a personal tax relief of up to RM2,500 for the costs in the purchase, installation, rental and subscription fees for EV charging facilities for two years (2022 to 2023).

Aishah said interest in EVs has gone up after the Budget 2022 announcement and there has been an upward trend by car companies in introducing EV models in their line-up.

At the moment, most car companies offering or intending to launch EVs are from luxury makes whose products are beyond the reach of most buyers.

Aishah said the incentives are also expected to see new car brands entering the Malaysian market to offer their EV models.

“With more EV players in the market, the likelihood of them offering affordable EV models is high,” Aishah said.

She also said the government should ensure that charging infrastructure for EVs is not concentrated in major cities on the west coast of the peninsula.

“The east coast of the peninsula as well as Sabah and Sarawak should also have a good number of charging stations to ensure the successful adoption of EVs,” she said.

Aishah also suggested that the incentives be tweaked from time to time to ensure their effectiveness in meeting the EV adoption goals.