Will EVs really get more expensive in Malaysia? Here’s what’s changing

AT A GLANCE

• Policy Shift: Malaysia is transitioning from incentivising imported electric vehicles (EVs) to fostering a domestic assembly ecosystem.
• New Thresholds: From July 1, imported CBU EVs must meet a minimum 180kW motor power and RM200,000 CIF value.
• Price Impact: Lower-priced imported models may disappear, while the affordable segment shifts toward locally assembled (CKD) brands like Proton and Perodua.

SHAH ALAM – Concerns over whether electric vehicles (EVs) will become significantly more expensive in Malaysia have been growing following recent policy changes affecting imported models and tax exemptions.

The issue has drawn attention as long-standing incentives that once made EVs more affordable are being gradually phased out, alongside new rules that could reshape how imported EVs are priced and brought into the country.

While EVs remain a key part of Malaysia’s push towards greener mobility, the shift in policy has raised questions among consumers about future pricing, market accessibility and whether the era of relatively “affordable” imported EVs is coming to an end.

What triggered the concern?

Concerns began after the announcement that all fully imported completely built-up (CBU) EVs will be subjected to new requirements starting July 1.

These include a minimum motor power limit of 180 kilowatts (kW) and a minimum cost, insurance and freight (CIF) value of RM200,000, as outlined by the Investment, Trade and Industry Ministry (Miti). The changes mark a tightening of conditions for imported EVs, raising questions over how many current models will still qualify under the new rules.

At first glance, the measures appear technical, but in practice they are expected to filter out a significant number of lower-priced EVs currently in the market. Many of the models that helped drive early EV adoption in Malaysia fall below these thresholds, which is why the announcement quickly sparked concerns that more affordable EV options could gradually disappear.

What are CBU and CKD EVs?

CBU EVs are electric cars that are fully assembled overseas and imported into Malaysia ready to be sold. They do not involve any local assembly, which is why they are quicker to bring into the market but more affected by import taxes and policy changes.

Meanwhile, completely knocked-down (CKD) EVs are shipped into Malaysia in parts and then assembled locally. This supports local factories and jobs, and is now the direction Malaysia is encouraging as part of its EV industry development.

Deputy Investment, Trade and Industry Minister Sim Tze Tzi said imported EVs do not generate enough economic value compared to locally assembled ones. - Photo source: Facebook/ @Sim Tze Tzin

Why is the government changing the policy?

Malaysia’s earlier EV strategy focused on adoption. Generous tax exemptions on CBU EVs made imported models more affordable and encouraged consumers to make the switch.

Now, the focus is shifting toward building a domestic EV ecosystem. The government wants automakers not just to sell cars in Malaysia, but to produce and assemble them here. According to its Deputy Minister Sim Tze Tzin, imported EVs do not generate enough economic value compared to locally assembled ones.

He also pointed out that the reintroduction of taxes on CBU EVs is not a new measure, but simply the end of a temporary incentive period that was always meant to expire.

Will EV prices actually increase?

Price increases are expected to mainly affect fully imported premium EVs, especially luxury brands with relatively low sales volumes that may not justify setting up local assembly operations in Malaysia.

In contrast, the more affordable segment is expected to remain supported through locally assembled models, with options such as the Proton e.MAS, Perodua QV-E and Chery continuing to provide more accessible choices for Malaysian buyers.

Can CKD production replace CBU fast enough?

While several manufacturers have announced CKD plans, most production lines are still developing and not yet operating at full capacity. This indicates that the transition away from imported CBU models will not happen immediately.

With EV demand continuing to rise, there is a risk of a short-term gap if CKD rollout cannot keep pace. In that case, buyers may face fewer affordable options before local production fully catches up.

What it means for Malaysian buyers

For consumers, the immediate impact may be a more limited selection of imported EVs, especially in the lower price range. Some models may become more expensive, while others may no longer be available.

Over time, however, the market is expected to stabilise as more locally assembled EVs enter the scene. Prices may remain competitive, but the mix of available vehicles will likely look different from what Malaysians are used to today.

Ultimately, the issue is not simply about EVs becoming more expensive. It is about a shift in Malaysia’s EV strategy – from relying on imports to building a local industry – and that transition will shape both pricing and availability in the years ahead.