Published on April 23rd, 2019 | by Daniel Sherman Fernandez1
Lower Road Tax Will Not Spur EV Sales
We have seen the sudden huge drop in plug-in hybrid sales and sales promotion by car companies in Malaysia pending the NAP 2019. With almost 47,000 plug-in hybrid and hybrid vehicles already running in the country, Malaysia has done well in promoting a greener driving community the past few years as these vehicles were awarded a fantastic tax reduction which promoted Malaysians to own them.
Our high vehicle import tax system does not encourage green motoring unless a huge tax incentive is given as this is why most of the 47,000 PHEV and hybrid car owners took ownership. Only a handful bought these cars to save on emissions and fuel and this is a fact.
The recent 50 per-cent discount given for plug-in hybrid and hybrid vehicles however will not encourage Malaysians to run out and buy a new hybrid as most plug-in hybrid and hybrid vehicles carry a 1999cc or lower combustion engine capacity. The current road tax for a Mercedes C350 e or Volvo XC90 is below RM390.00 a year which anyone with a calculator will realise is just a saving of less than RM195.00 a year.
The real saving in buying a plug-in hybrid or hybrid vehicle is the tax free selling price where the savings can be RM100,000 or more.
So, the awarding of 50 percent road tax for electric, plug-in hybrid and hybrid vehicles is not going to spur the sales of these vehicles and instead it is the big import tax discount that makes the difference to Malaysian car buyers.