After RM3.3B In Forgone Taxes, MITI Signals End Of 'Free Ride' As New EV Levy Studied

If you've been eyeing a shiny new electric vehicle (EV) or already drive one around Klang Valley, you might want to brace your wallet.

The Malaysian government is officially studying a new sales levy on every EV sold in the country. The goal? To build a dedicated fund for expanding Malaysia's public EV charging network.

During a Dewan Negara sitting on Tuesday, Investment, Trade and Industry (MITI) Minister Datuk Seri Johari Abdul Ghani dropped a truth bomb that left many automotive observers stunned: Malaysia forgave a massive RM3.3 billion in tax revenues over the past four years to spur EV adoption, yet public charger investments completely fell flat.

For the last four years, Malaysia rolled out the red carpet for imported (CBU) EVs with full exemptions on import duty, excise duty, and sales tax. The hope was that auto companies would reinvest their profits into building charging stations across highway stops, malls, and residential zones.

Instead, Malaysia ended up with plenty of high-tech cars on the road, and a severe shortage of plugs.

"After four years, when we looked for public charging stations, the investment from EV industry players was simply not there," Johari stated frankly in Parliament.

Because Putrajaya cannot afford to throw taxpayer money at a China-scale charging rollout on its own, MITI says car manufacturers and distributors can no longer expect a "free ride" without contributing to basic infrastructure.

Read: How To Buy Your First Electric Car Without Regrets: A Complete First-Timer's Guide

If you live in an apartment, condominium, or People's Housing Programme (PPR) flat, you already know the pain: owning an EV without a private home charger feels almost impossible.

Johari explicitly highlighted high-rise residents as the primary victims of the current charger deficit. Without accessible public chargers nearby, EV ownership remains restricted to landed home owners who can plug in overnight.

Proceeds from the proposed EV levy would go directly into a dedicated fund to accelerate public charging hubs, especially in high-density residential areas.

Read: Is Malaysia Being Too Strict? How We Compare To Thailand’s 'EV Hub' Strategy

The end of the import tax holiday means the era of cheap fully imported (CBU) EVs is officially winding down. However, locally assembled (CKD) EVs will retain tax exemptions until December 31, 2027.

Why the distinction? MITI is taking a firm stance on foreign manufacturers.

"If companies bring in all their components from overseas, assemble and sell vehicles here, and expect incentives, we cannot allow that," Johari warned.

To get future government perks, car brands must integrate local Malaysian vendors into their supply chains, following the footsteps of Proton and Perodua, which support a massive network of 733 local Tier-1, Tier-2, and Tier-3 manufacturers.

Read: MITI Won’t Cap EV Charging Rates: What "No Price Control" Means For Malaysian Drivers

The Investment, Trade and Industry Ministry (MITI) is studying a sales levy on every new electric vehicle sold to establish a dedicated public charging fund. This mechanism ensures that nationwide infrastructure can grow sustainably without relying solely on vehicle manufacturers or distributors.

Over a 4-year period, Putrajaya waived import duties, excise duties, and sales tax for imported completely built-up (CBU) EVs to encourage market entry. This resulted in RM3.3 billion in uncollected tax revenue. Minister Datuk Seri Johari Abdul Ghani revealed that despite these massive incentives, private sector investment in public charging infrastructure remained far below expectations.

Yes. Full tax incentives for imported CBU EVs have ended. However, tax exemptions for locally assembled (CKD) EVs will continue until December 31, 2027. MITI emphasized that future perks will strictly reward car companies that build local technology and support Malaysian vendor supply chains (similar to Proton and Perodua’s 733 local suppliers).

Lack of home charging access is the biggest barrier for non-landed property residents. The fund raised from the proposed EV levy will be used to deploy accessible public charging hubs in high-density communities, ensuring apartment and PPR dwellers are not left behind in Malaysia's transition to electric mobility.