Tesla prices will spike early next year, will the brand still stick around much longer?
If you have been eyeing a Tesla Model 3 or Model Y in Malaysia, the window of opportunity to secure current pricing is closing fast. Unless the goverment changes its policy, a significant price surge for Tesla vehicles starting is anticipated 2026 as excise duties and import taxes return to fully-imported electric vehicles.
With the expiration of key tax holidays for fully imported (CBU) vehicles looming, here is everything Malaysian buyers need to know about the expected price increases.
Tesla Prices Are Going Up Next Week
The primary driver for the expected price hike is the expiration of the government’s tax exemption incentives for fully imported (CBU) EVs, scheduled to end on December 31, 2025. Currently, Tesla vehicles sold in Malaysia are imported fully built. They enjoy a “tax holiday” that waives import duties and Sales and Service Tax (SST), allowing Tesla to price models like the Model 3 aggressively (starting around RM181,000).
Once this exemption expires on January 1, 2026, the following taxes are expected to be reinstated:
- Import Duties: A significant percentage levied on foreign-made cars.
- Sales and Service Tax (SST): Creating an additional cost layer on top of the retail price.
Without new government intervention or an extension of these incentives, these taxes will be passed directly to the consumer.
No Local Assembly Investment
From the very beginning, Tesla Malaysia’s efforts have been rather half-hearted. The government themselves offered Tesla a ‘home’ in Cyberjaya and an AP-free business model. In contrast, all other new EV companies had to find their own commercial lots to rent and local partners for AP support.
While many of the popular EV brands will mitigate tax hikes by assembling cars locally (CKD), Tesla has not announced any immediate plans for local assembly in Malaysia.
Because Tesla relies entirely on direct imports, its vehicle lineup is fully exposed to the reinstatement of CBU taxes. Unlike competitors with established local assembly lines, Tesla cannot currently bypass these duties, making a price increase inevitable under the current policy framework. Even without its AP-free business, prices will probably go up.
Automotive industry analysis suggests a minimum price hike of 20% to 30% starting in 2026 though no price hikes have officially been announced. To put this into perspective, consider the entry-level Tesla Model 3, which is currently a popular choice due to its sub-RM200k price point.
- Current estimated price: ~RM181,000
- Projected 2026 price: >RM230,000
This jump would push the Model 3 out of the “affordable luxury” bracket and into a much higher premium segment, potentially putting it out of reach for many prospective buyers who were budgeting for the current rates.
Tesla Malaysia has reportedly encouraged prospective buyers to finalize bookings with vehicles brought in before December 28, 2025 still benifiting from tax exemptions. You could lock in savings now, but the future of the Tesla brand in Malaysia remains uncertain.
They probably won’t pack things up and leave as soon as 2026 rolls around, but it’s also unclear how committed they are to further expansion in our market. CKD plans, as mentioned, are all but missing and for now they still trail many rivals in terms of sales and service centres nationwide though they are reportedly expanding to Kuching.
Regardless, there will still be many buyers out there who just want a ‘cheap’ new Tesla and that era is likely coming to an end. The brand that disrupted the premium market some 2+ years ago with the introduction of the Model Y at extremely reasonable prices will now be forced to compete against premium makes with established CKD facilities.
