Budget 2026: MAA Calls For Extension Of EV Incentives

By Zairina Zainudin

KUALA LUMPUR, Oct 2 (Bernama) -- The Malaysian Automotive Association (MAA) has urged the government to extend the existing tax incentives for battery electric vehicles (BEVs) in the upcoming Budget 2026 to accelerate the country’s electrification goals and attract long-term investments.

Under the current policy, fully-imported BEVs enjoy zero import duty and excise duty until end-2025, while locally assembled BEVs are exempted from import duty, excise duty and sales tax until 2027.

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MAA president Mohd Shamsor Mohd Zain said the association is proposing that these incentives be extended to 2027 for completely built-up (CBU) BEVs and to 2030 for completely knocked down (CKD) BEVs.

“BEV’s market share is still low, at only 4.0 per cent of total industry volume (TIV) as of June 2025, despite growing by 91 per cent from the same period in 2024.

“So there is an urgent need to continue the existing incentive to sustain the growth momentum of electric vehicle (EV),” he told Bernama, adding that MAA’s budget wish list has been submitted to the government during the Budget Dialogue months ago.

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Mohd Shamsor highlighted that BEV models brought in as CBU often feature the latest technology, advanced safety systems and high performance.

He said this is important to boost consumer confidence in EV technology, thereby accelerating the transition from internal combustion engine (ICE) vehicles.

Accelerate Charging Bays Nationwide

Mohd Shamsor stressed that extending incentives would not only sustain demand but also help fast-track the development of charging infrastructure.

“Longer duration of incentives will stimulate demand for BEVs and accelerate establishment of EV charging bays (EVCBs) nationwide, which stands at 4,161 bays as at March 31, 2025,” he said, noting that the government targets to have 10,000 bays by Dec 31 this year.

He also highlighted the role of Chinese original equipment manufacturers (OEMs), which have been increasingly active in Malaysia.

Mohd Shamsor opined that by strengthening confidence among BEV OEMs, especially those from China, they are more likely to remain and invest in setting up CKD operations in Malaysia.

This can create job opportunities, especially for local Technical and Vocational Education and Training (TVET) graduates who will be at the forefront of the EV transformation, he said.

Hybrid Incentives to Ease EV Transition

To accelerate EV development in the country, Mohd Shamsor said MAA has proposed a 75 per cent reduction under the current Customised Incentives scheme for locally assembled hybrid electric vehicles (HEVs), to be effective for over two years until 2027.

“Promoting HEVS is an ideal approach to phase out the conventional ICE vehicles and boost the transition towards BEV,” Mohd Shamsor said.

He said making HEVs more affordable is key, as it would accommodate customers with concerns on BEVs in terms of range anxiety, limited availability of EV charging bays nationwide and the long charging time.

The government aims for electrified vehicles (xEV) to account for 15 per cent of TIV by 2030 and 38 per cent by 2040.

xEV includes BEV, hybrid electric vehicle (HEV), plug-in hybrid electric vehicle (PHEV) and fuel cell electric vehicle (FCEV).

Prime Minister Datuk Seri Anwar Ibrahim, who is also the Finance Minister, is scheduled to table the Budget 2026 in Parliament on Oct 10.

-- BERNAMA