EV players eagerly await new road tax structure

PETALING JAYA: Electric vehicle (EV) users and dealers want definitive guidelines on the formula that will be in place to calculate the new EV road tax structure as announced by the government.

Malay Vehicle Importers and Traders Association of Malaysia vice-president Raja Petra Marudin Raja Nordin said he strongly encouraged a new EV road tax structure.

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“The EV road tax should not be based on the vehicle’s power output because EV typically have a stronger torque and horsepower than gasoline cars.

“If the road tax is based on power output, the rates will be very high which will discourage people from utilising EV as a mode of transport,” he said when contacted.

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At present, Malaysia’s road tax is calculated based on engine displacement. The higher the engine displacement of a car, the road tax will cost more.

Raja Petra also suggests that the government introduce a CO2-related taxation of EV which sets its rates based on fuel efficiency rather than power output.

“This would encourage people to buy EV as the tax rates are reasonable,” he said.

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EV user Farhan Abdul Rahim, 45, said he and many others are worried about the road tax rates that would be imposed after the current EV tax exemption, introduced under the previous government, ends in December 2025.

“What many EV users want to know is the exact formula that will be used to set the road tax prices because the current formula does not encourage EV adoption.

“The road tax rate is important as it will determine what we will do with our EV in the future,” said Farhan, who is among the earliest to own an EV.

He suggests that the government look at countries such as the United Kingdom and the Netherlands for their road tax structure for EV.

“Countries in Europe have a higher maturity for EV, so they provide a good framework to introduce a sustainable road tax structure,” he said.

Separately, Transport Minister Anthony Loke said as part of the government’s push for EV adoption, a new EV road tax structure would be introduced by the end of the year.

“There have been concerns that once the current EV road tax exemption policy ends in 2025, it will cost more based on the current formula.

“However, we will make our policies in line with our aim to facilitate the adoption of EV as part of our overall sustainability goal.

“As such, we plan to give a direct answer to all potential buyers and be very transparent in how we calculate the road tax soon,” he said during his opening speech at the Green Mobility and Transport Forum yesterday.

To further push for EV adoption, Loke said other pro-EV adoption incentives and policies were also currently being developed.

“We hope to announce these incentives along with the new EV road tax structure by the end of this year.

“In addition, we are also working with Proton and Perodua, as well as industry players to expedite the production of national EV and the introduction of affordable EV in the country,” he said.