Published on August 11th, 2018 | by Daniel Sherman Fernandez


EEV tax incentives just help the rich?

For most part of 2016-2018 there have been very big objections against the plug-in hybrid (PHEV) vehicle tax breaks that some luxury car manufacturers have enjoyed in Malaysia. It’s undeniably true that plug-in hybrid vehicles are very expensive to produce…..much more expensive than regular petrol of diesel driven versions.

The “Energy Efficient Vehicle” tax incentives scheme was created to reduce our carbon footprint, reduce the use of fossil fuel and to provide Malaysians with the opportunity to own more efficient running vehicles over their ageing petrol and diesel guzzling vehicles. In a country where there is a high import tax on vehicles, the EEV incentives brought car prices down….really down…. and many Malaysians traded in their big capacity or older vehicles for leaner running modern high technology vehicles which were plug-in hybrids.

It was also the function of Greentech Malaysia to push the hybrid, electric car movement fast forward in Malaysia. Somewhere along the way this program got a little missed by middle and lower middle class Malaysians who have been waiting for the opportunity to own a ‘nice’ car. Why?

Well, its simple. Car manufacturers globally are spending millions developing plug-in hybrids and electric vehicles that will return better battery range with added luxury. It seems that low emissions and luxury have to sit together. The idea of producing a plug-in hybrid or electric vehicle starts at the top of the food chain. BMW, Mercedes, Volvo and Porsche are working hard with their luxury range.

Think about it….you do not see a Mercedes Benz A-Class with PHEV or a BMW 1-Series PHEV. The lowest range starts with the BMW 330e and the Mercedes C350e. Then it works its way up the model range. Now there are affordable electric cars (EV) like the VW Golf E, Renault Zoe and the Nissan Leaf which will suit middle class Malaysians perfectly. But they have one big issue. They have range anxiety as they only have their battery power to move them…… petrol engine to assist when the batteries run flat. With limited charging infrastructure from Kota Tinggi to Kangar, Malaysians are afraid to buy a full EV.

So, while the cost of charging infrastructure is being debated between Greentech Malaysia, ABB, Bosch and the car manufacturers, only the rich Malaysians enjoy our EEV status as they get to buy PHEV BMW’s and Mercedes Benz’s are great selling prices.

Middle class Malaysians enjoy a small EEV rebate with their Hyundai Ioniq, Mazda CX5, Perodua Myvi, Honda City and Honda Jazz to name a few.

It is not the fault of the government, or the issue with car manufacturers or the lack of tax incentive understanding.

It’s the old saying of the ‘chicken and egg’ situation. Who will pay for the charging infrastructure for EV’s (government, private funders, Bosch) and wait for their return on investment whilst Malaysians learn to adopt EV cars.

Or……will it be the EV car manufacturers that need to invest in the charging infrastructure in order to sell their EV’s? Is the government willing to forgo all the billions in import duties on imported electric cars for cleaner breathing air?

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