Budget 2025: Auto industry wants road tax exemption incentive for EVs extended

KUALA LUMPUR: Automotive industry players are seeking a deadline extension for the full road tax exemption incentive for electric vehicles (EVs) and for it to be extended to hybrid electric vehicles (HEVs).

The Malaysian Automotive Association (MAA) said the move would enable demand for EVs and HEVs to continue and allow manufacturers to develop more products to meet the government's 2030 carbon-neutral objectives.

The MAA’s request referred to the Road Transport Department's full road tax exemption for EV vehicles from Jan 1, 2022 to Dec 31, 2025. It wants this deadline extended.

The association, which represents new motor vehicle distributors, assemblers and manufacturers in Malaysia, has also proposed the import duty on batteries for EVs and HEVs be abolished.

"A zero import duty on EV and HEV batteries will also promote EV and HEV adoption by consumers because currently, the cost of EV/HEV batteries is posing a deterrent to consumers who wish to adopt EV/HEV,” said the MAA.

At present, the battery for EV and HEV is subjected to 20 per cent import duty.

Meanwhile, national carmaker Proton Holdings Bhd has expressed hope for the industry to be given grants to stimulate EV industrialisation without compromising the existing automotive ecosystem.

"We hope for grants for EV charging installations to establish public charging facilities at condominiums and apartments. This will enhance accessibility for all income groups, improving mobility and promoting the adoption of electric vehicles,” it said.

To provide support for emerging technologies, Proton urged the government to allocate some funds for training in EV technology, the establishment of EV training facilities, as well as research and development (R&D) grants for the development of critical EV components.

The carmaker also called for the re-introduction of special funds to assist local suppliers to invest in the development of local R&D, facilitating technology transfer and establishing manufacturing capabilities towards next-generation critical components, focusing on high voltage battery and system repair.