The all electric Proton e.MAS 5 has helped Proton secure a sizeable 33% Malaysian automotive market share in January 2026
Malaysia’s efforts to expand the adoption of electric vehicles may slow following recent changes to petrol subsidies, which have reduced the cost advantage of switching from fuel-powered cars, according to a recent report by a market research firm.
The research firm stated that the new targeted RON95 subsidy mechanism, which has lowered the pump price to MYR1.99 per litre for eligible Malaysians, may weaken the financial incentive for middle- and lower-income groups to transition from internal combustion engine vehicles to battery electric vehicles.
Under the current system, most Malaysians are entitled to subsidised fuel capped at 300 litres per month through MyKad verification. Analysts indicated that this measure reduces the overall cost of operating petrol-powered cars, making them comparatively more affordable than electric vehicles.
The firm noted that the subsidy could delay the transition, estimating that it may take at least five additional years for electric vehicle adoption to increase further and for petrol vehicle sales to reach their peak. The report added that, at present, many consumers have limited financial motivation to shift away from conventional vehicles.
Electric vehicle adoption has increased in recent years, accounting for 5.5% of total vehicle sales in 2025. However, analysts stated that growth could stabilise if petrol prices remain affordable.
Infrastructure remains a consideration. The government has set a target of installing 10,000 public charging stations nationwide. As of February 2026, approximately 56% of this target had been achieved. While the rollout of fast chargers has exceeded its objective, the number of slower AC chargers remains at around 40% of its designated target.
Malaysia aims for electric vehicles to account for 20% of new vehicle sales by 2030 and 80%, including hybrids, by 2050.
