Tax exemption policy is coming to an end, Malaysia's electric vehicle registrations in November increased by 25% month-on-month to 5,417 units

[PCauto] According to the latest data, electric vehicle registrations for the month reached 5,417, marking a month-on-month increase of 25% compared to October's 4,334. Behind this figure lies a final rush by consumers before policy incentives expire.

Analysis by the BIMB Research Center indicates that this surge was largely driven by imported models from foreign brands such as Tesla and BYD. Meanwhile, local brand Proton is also contributing, collectively pushing the electric vehicle market share to 4.7%.

So far this year, electric vehicle sales have exceeded 40,000 units, nearly double last year’s total of 22,000 units. This growth is attributed not only to the stimulus of the duty-free import policy but also to rising consumer acceptance of new energy vehicles.

However, as the policy window closes, the market is poised for change. Starting next year, fully imported electric vehicles will no longer qualify for duty-free benefits. Along with the impact of rising consumption taxes, prices of locally assembled electric vehicles are expected to increase by 10% to 30%. Locally produced electric vehicles will remain eligible for duty-free policies until 2027.

Tesla, leveraging import advantages with its Model 3 and Model Y, has secured a strong market position. BYD has attracted consumers with a diversified model lineup, while Proton, as a local representative, is accelerating its expansion by capitalizing on policy benefits.

However, with the phasing out of the import tax exemption policy, foreign brands may need to adjust their pricing strategies, while local brands should seize the policy window to enhance their competitiveness.

Although short-term sales may fluctuate due to policy adjustments, in the long term, improvements in charging networks, reductions in technology costs, and growing consumer environmental awareness will continue to drive significant growth potential for electric vehicles.

The BIMB Research Center recommends that the government and enterprises collaborate to accelerate infrastructure development while also promoting upgrades in the local industrial chain. This will help address challenges posed by market shifts and ensure sustainable growth in the electric vehicle market. For consumers, a reasonable assessment of needs and budgets during this policy transition period may help identify more suitable options amid market fluctuations.