The Malaysian tax department including MITI, gave up RM3.3 billion in tax revenue over four years due to the EV tax holiday.
Recently, MITI Minister Datuk Seri Johari Abdul Ghani revealed this figure while reviewing EV tax holiday from 2022 to 2025.
The massive RM3.3 billion figure accounts for uncollected vehicle import duties, excise duties and sales tax on fully imported EVs during the four-year incentive window.
The full car import tax exemptions for imported CBU EVs expired on December 31, 2025, and were not extended even after a lot of debate from industry players and also Malaysian car buyers.
However, tax exemptions for locally assembled (CKD) EVs remain in place until December 31, 2027, to support domestic automotive manufacturing.
Government officials noted that while the tax holiday significantly boosted EV sales (particularly imported models from foreign automakers), private sector investment in the necessary public charging infrastructure fell short of expectations over the four-year period. Revenue collected from imported EV duties going forward is expected to be reinvested into expanding public charging networks.
Meanwhile, following the expiration of the 2022 to 2025 import car tax free window for fully imported vehicles, Malaysia’s EV landscape shifted to prioritize local assembly (CKD) and protect domestic automotive investment.
The full tax exemptions for completely built-up (CBU) imports expired on December 31,
2025 and standard duties and taxes apply.
30% import duty, 10% excise duty, and 10% Sales and Services Tax (SST) applied sequentially. (Note: Imports from countries with Free Trade Agreements, such as China under ACFTA, benefit from lower or zero import duties, though excise duties and SST still apply).
Full exemptions from excise duties and sales tax remain in place until December 31, 2027. Import duties on knocked-down components for local assembly are also waived through 2027.
To prevent cheap foreign imports from undercutting the development of local assembly plants, the Ministry of Investment, Trade and Industry (MITI) implemented strict import requirements for all CBU EVs under the Franchise Approved Permit (AP) scheme. A fully imported EV must have a pre-tax import value of at least RM200,000. After factoring in standard duties, logistics, and dealer margins, retail prices for imported EVs effectively start above RM300,000.
CBU imports must feature a motor output of at least 180 kW (~245 PS).
Mass-market, entry-level, and mid-tier imported EVs are effectively blocked, leaving the CBU segment exclusively for high-end luxury vehicles. Foreign carmakers seeking to sell volume EVs in Malaysia must assemble them locally (CKD).
All battery electric vehicles (BEVs) enjoyed a full exemption from road tax through December 31, 2025.
The Ministry of Transport established a power-output-based road tax scale (based on kilowatt output instead of engine capacity) designed to keep EV road tax significantly lower than comparable Internal Combustion Engine (ICE) vehicles once implementation begins.
Taxpayers can claim up to RM2,500 in personal income tax relief annually for expenses related to EV charging equipment, installation, rental, or public charging subscription fees.
