KUALA LUMPUR: Rising global fuel prices and ongoing supply uncertainties have prompted more Malaysians to consider switching to electric vehicles (EVs), accelerating the country's transition towards greener mobility.
The growing interest is reflected in the increasing number of EVs on Malaysian roads, driven by a wider range of models and stronger consumer confidence. The momentum was also boosted by the entry of the country's two major local carmakers, Proton and Perodua, into the EV market with more affordable offerings.
According to the Road Transport Department (JPJ), 5,894 EVs were registered in April 2026, a sharp 103.8% increase from 2,892 units recorded during the same month last year.
The rise mirrored the broader recovery of Malaysia's automotive industry, with Total Industry Volume (TIV) for April 2026 climbing 19.4% year-on-year to 77,819 units from 65,200 previously.
EVs accounted for approximately 7.6% of total vehicle registrations in April, equivalent to about one in every 13 new vehicles registered in the country. Proton led the market with 2,408 registrations, followed by BYD (1,413), Chery (562), Zeekr (357) and Tesla (172).
While the rapid adoption of EVs was widely viewed as a positive step towards reducing carbon emissions and dependence on fossil fuels, concerns grew over another challenge looming on the horizon – how Malaysia would manage and dispose of EV batteries once they reached the end of their lifespan.
A growing waste challenge
Malaysia could face a significant surge in depleted lithium-ion batteries in the coming decades.
According to the Malaysia Automotive, Robotics and IoT Institute (MARii), nearly 900,000 EV batteries were expected to require disposal or recycling by 2050. Based on an estimated eight-year battery lifecycle and EV registration trends since 2020, around 40,000 batteries were projected to require recycling by 2030, rising to 330,000 by 2040 and 870,000 by 2050.
Improper disposal of these batteries could pose serious environmental and public health risks due to the hazardous materials they contained.
Malaysia Automotive Recyclers Association (MAARA) vice-president Cho Chee Seng said EV battery recycling remained relatively new in Malaysia as large-scale EV adoption only began accelerating in 2022 following government tax and duty exemptions.
"At the moment, not many EV batteries have reached the end of their lifespan for recycling," he said.
Nevertheless, Cho noted that Malaysia already had a comprehensive regulatory framework to manage the safe disposal and recycling of hybrid and EV batteries through guidelines and policies established by the Environment Department (DOE).
The framework included the implementation of Authorised Automotive Treatment Facilities (AATF), licensed recycling centres and the Scheduled Waste SW103 protocol, which regulated the handling, storage, transportation and disposal of hazardous battery materials.
"Companies appointed under the AATF policy must comply with strict regulations on how vehicles are processed, how waste is disposed of and how waste generation can be minimised.
"We (MAARA) have also been working closely with the government in developing Malaysia's vehicle recycling ecosystem, including providing industry feedback during the formulation of the AATF policy and training our members to handle EV battery waste more effectively as the industry moves towards downstream recycling and repurposing activities," he told Bernama during the recent Automechanika Kuala Lumpur (AMKL) 2026.
Government pushes circular economy policies
To avoid future waste crises, Malaysia began laying the groundwork for a more sustainable EV ecosystem through policies focused on recycling, remanufacturing and circular economy practices.
The Investment, Trade and Industry Ministry addressed the issue through the National Automotive Policy 2020 (NAP 2020) and the National Remanufacturing Policy (NRP).
Under NAP 2020, the government aimed to achieve a 70% recycling rate for End-of-Life Vehicles (ELVs) through research and development initiatives and compliance with MS ISO:22628 standards. The policy also targeted the establishment of 21 licensed AATFs by 2030, compared to only five that were operating.
Originally introduced in 2006 under the Third Industrial Master Plan (IMP3) 2006-2020, the NAP served as a long-term framework to strengthen the competitiveness and sustainability of Malaysia's automotive sector.
The NRP complemented these efforts by promoting a circular economy across five strategic sectors – automotive, marine, machining, electrical and electronics, and aerospace – through the remanufacturing of used components into high-value, like-new products.
The policy aimed to position Malaysia as a regional circular economy hub by 2030.
Meanwhile, MARii introduced Asean's first EV Battery Passport standard, which was designed to improve battery traceability throughout its lifecycle while ensuring compliance with global Environmental, Social and Governance (ESG) standards.
The Battery Passport system functioned like a digital identity card for EV batteries, recording information such as battery origin, composition, usage history, carbon footprint and recycling data. The initiative was expected to improve transparency, facilitate recycling and support safer second-life applications for used batteries.
To further encourage green investment, the government also offered tax incentives, including green investment tax allowances and income tax exemptions for green technology services managed by the Malaysian Green Technology and Climate Change Corporation (MGTC).
Industry responds with recycling investments
Industry players also ramped up efforts to prepare for the expected wave of battery waste.
Econili Battery New Energy Sdn Bhd established a 24,000-tonne-per-annum EV battery recycling plant in Perak and planned to set up a RM500mil plant for its Phase Two expansion project in Gopeng within the next two years.
Its chief executive officer Dr Jayden Goh said the expansion, which was expected to be completed within two years, would add another 100,000 tonnes of annual recycling capacity.
"This high-tech factory operates using a closed-system process that complies with strict DOE standards, ensuring minimal environmental impact throughout the recycling process," he said.
According to him, the facility housed Malaysia's first hydrometallurgical plant for integrated critical metal recovery, producing black mass containing lithium, cobalt and nickel – valuable materials used in manufacturing new batteries.
Black mass referred to the powder-like material extracted from recycled lithium-ion batteries after they were dismantled and processed. It contained valuable metals that could be recovered and reused in battery production.
He added that Econili operated a DOE-licensed lithium battery recycling facility supported by proprietary processing technology.
Giving batteries a second life
Beyond recycling, retired EV batteries were increasingly being viewed as valuable assets that could be repurposed for energy storage.
Cho said batteries removed from EVs often still retained 40% to 50% of their usable capacity even after they were no longer suitable for vehicles.
"Batteries collected from several vehicles can be repurposed into Battery Energy Storage Systems (BESS), which can store electricity for residential or commercial use, including solar energy projects," he explained.
"For example, batteries from several EVs can be combined into a battery pack roughly the size of a table, which can then be used to power a house or even serve as a generator for a pasar malam.
"During the daytime, electricity can be generated through solar energy, while at night the stored energy in the BESS can be used without relying entirely on the grid supply," he said.
Universities and automakers collaborate
BMW Group Malaysia and Universiti Malaya were among those exploring how retired EV batteries could be repurposed into energy storage systems for rural electrification projects.
Under the collaboration, BMW supplied retired EV batteries to Universiti Malaya's UM Power Energy Dedicated Advanced Centre (UMPEDAC), where researchers studied second-life applications including stationary energy storage systems and sustainable on-campus energy solutions.
The initiative could also benefit rural communities supported by the university's community engagement and sustainable development centres.
BMW Group Malaysia director of corporate communications and sustainability Sashi Ambi said the company had delivered more than 38,700 electrified vehicles in Malaysia as of March 2026, while over 13,600 batteries had been recollected under its standard practices.
"As these vehicles age, we recollect their batteries responsibly as standard practice. Under our RE:GENERATE initiative, we take this further by exploring how these batteries can be given a meaningful second life," he said.
The initiative formed part of BMW Group Malaysia's broader circular economy commitment guided by the principles of RE:THINK, RE:DUCE, RE:USE and RE:CYCLE.
"If the technology can be safely scaled, it could help reduce battery waste, support cleaner rural electrification and offer a more practical electricity solution for communities that still depend heavily on diesel-generated power," he added during a recent media briefing at Universiti Malaya.
UMPEDAC senior lecturer Assoc Prof Dr Tan Chia Kwang said newer-generation BMW batteries retained higher energy density and could provide up to three days of electricity for a household equipped with a refrigerator.
"Older generation batteries average around 0.5kWh, and through careful grading, sorting and modification, we try to maximise the performance of each pack regardless of generation," he said.
According to Tan, the solar-battery system was designed to suit rural living patterns, where solar panels charged the batteries during the day before stored energy was discharged at night when electricity demand peaked.
Under optimal conditions, he said, second-life EV batteries could continue functioning for up to 20 years as stationary storage systems.
"If a retired EV battery can continue serving as stationary storage for many more years before final recycling, its total useful lifespan becomes much longer than its first life in a vehicle," he said.
Battery supply may take longer than expected
Despite growing interest in recycling, Malaysia Electric Vehicle Owners Club (MyEVOC) president Datuk Shahrol Azral Ibrahim Halmi believed Malaysia might not generate enough retired EV batteries in the near future to sustain a large-scale local recycling industry.
He said EV batteries were lasting longer than initially expected, with many still suitable for second-life energy storage applications.
"As a result, the most cost-effective way to process EV batteries that can no longer function is by converting them into black mass before exporting the material to larger recycling facilities overseas that can recover valuable metals," he said.
However, he noted that repurposing batteries remained costly due to the complex process of dismantling, inspecting and reassembling used battery packs.
"In some cases, the process can be more expensive than sourcing brand-new batteries from China because of China's massive production scale and competitive pricing," he said.
At the same time, demand for used EV batteries was increasing among third-party workshops seeking affordable replacement options for damaged or ageing EVs.
He said initiatives such as MARii's Battery Passport system could improve battery traceability, increase the availability of reusable batteries and potentially lower repair costs for EV owners. – Bernama
