Thinking about going electric, but not quite ready to ditch the petrol engine completely? The Malaysian Automotive Association (MAA) thinks both hybrid and EV buyers should get a little more encouragement.
Ahead of Budget 2027, MAA has proposed a RM7,000-RM10,000 personal income tax rebate for Malaysians purchasing electrified vehicles, or xEVs.
And importantly, the proposal isn't limited to fully electric cars. Regular hybrids would be included too.
According to MAA president Mohd Shamsor Mohd Zain, the proposal was recently submitted to the Ministry of Finance and is aimed particularly at middle-income taxpayers who are interested in xEVs but remain sensitive to their prices.
Before you start shopping: This is an MAA proposal, not a confirmed Budget 2027 incentive. The government has not announced or approved the proposed RM7,000-RM10,000 rebate.TL;DRMAA proposes a RM7,000-RM10,000 income tax rebate for xEV buyers.That includes hybrids, plug-in hybrids and full EVs, among other electrified vehicles.MAA also wants the existing RM2,500 home-charging tax relief extended beyond 2027.There's a separate proposed RM5,000 rebate for voluntarily scrapping eligible vehicles aged 20 years or more.None of these new proposals has been confirmed by the government.Yes, Hybrids Would Be Included Too
The term xEV is important here. In the automotive industry, MAA says it encompasses hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), battery electric vehicles (BEVs) and fuel-cell electric vehicles (FCEVs).
So under MAA's proposal, you wouldn't necessarily have to buy a fully electric vehicle to potentially qualify. A conventional hybrid would fall within the xEV umbrella too.
Vehicle TypeIncluded Under MAA's xEV Definition?Hybrid (HEV)YesPlug-in Hybrid (PHEV)YesBattery EV (BEV)YesFuel-Cell EV (FCEV)YesMAA believes offering buyers a RM7,000-RM10,000 personal income tax rebate could reduce the financial burden of xEV ownership and make electrified vehicles more affordable.
Mohd Shamsor noted that there is currently no direct purchase subsidy or tax rebate specifically for xEV buyers, with existing individual relief mainly centred around charging equipment.
There's Another RM2,500 EV Incentive MAA Wants Extended
MAA's Budget 2027 wishlist doesn't stop at the proposed buyer rebate.
The association also wants the existing RM2,500 individual income tax relief for home-charging expenses extended beyond 2027.
MAA's argument is that putting more incentives on the consumer side could stimulate actual demand rather than relying primarily on incentives aimed at manufacturers.
Why this matters: MAA wants part of Malaysia's electrification support placed closer to the person actually buying the vehicle, particularly middle-income consumers who remain sensitive to xEV prices.There's an industrial angle too.
MAA believes stronger consumer demand could encourage manufacturers to introduce more CKD or locally assembled xEVs and invest further in Malaysian production. More xEVs on the road could also increase utilisation of the country's growing charging network.
That's particularly relevant given how Malaysia's EV incentive landscape has changed.
As Carz previously reported, the blanket tax exemptions that helped drive fully imported EV adoption ended after 2025, while locally assembled EVs continue to receive incentives until 2027.
MAA has also been pushing for greater long-term policy clarity as Malaysia tries to maintain its electrification momentum.
The association is also proposing an end-of-life vehicle programme specifically targeting vehicles aged 20 years and above.
Under the proposal, owners could receive a RM5,000 personal income tax rebate for each eligible vehicle voluntarily retired and scrapped.
The idea is to encourage owners to replace ageing vehicles with newer locally assembled models, while also renewing Malaysia's vehicle fleet.
This isn't Malaysia's first attempt at encouraging owners to retire older vehicles. As Carz reported earlier this year, Malaysia already introduced a matching-grant programme for owners replacing vehicles aged 20 years or older with new Proton or Perodua models.
Proton subsequently rolled out its own trade-in incentives alongside the government programme, with total incentives reaching up to RM4,000 for eligible models.
MAA's latest proposal would therefore take the vehicle-retirement push in another direction by introducing a RM5,000 personal income tax rebate.
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For now, no such rebate has been confirmed. What we have is an industry proposal from MAA that has been submitted to the Ministry of Finance ahead of Budget 2027.
So don't start deducting RM10,000 from the price of that hybrid or EV you've been eyeing just yet.
The Bottom LineRM7,000-RM10,000 would certainly get buyers' attention, especially with hybrids included. But until the government says yes, treat it as exactly what it is: an MAA proposal for Budget 2027.Still, it's an interesting shift in the conversation around electrification incentives in Malaysia. Instead of focusing solely on manufacturers and vehicle taxes, MAA wants buyers themselves to receive a more direct financial incentive.
And for someone already deciding between a petrol car, hybrid or full EV, up to RM10,000 could make that decision considerably more interesting.
FAQHas the RM7,000-RM10,000 tax rebate been approved?No. It is a proposal from MAA submitted to the Ministry of Finance ahead of Budget 2027. It has not been announced as a government incentive.
Would hybrids qualify under MAA's proposal?Yes. MAA's xEV definition includes HEVs, PHEVs, BEVs and FCEVs, so the proposal isn't limited to fully electric vehicles.
How much is MAA proposing?MAA is proposing a personal income tax rebate of between RM7,000 and RM10,000 for xEV purchases.
What is MAA proposing for old cars?MAA is also proposing a RM5,000 personal income tax rebate for eligible vehicles aged 20 years or more that are voluntarily retired and scrapped.
Note: The measures discussed above are proposals submitted by the Malaysian Automotive Association ahead of Budget 2027. They should not be interpreted as confirmed government incentives.