If you’re planning to buy an electric vehicle (EV), it’s important to know that Malaysia’s tax structure for EVs will change soon. This means EV prices, particularly for imported CBU models like Tesla, are expected to rise once the tax holiday expires.
If you’re considering a CBU EV purchase, 2025 may be the best time to buy before the new tax rates take effect.
TLDR;
Completely built-up (CBU) EVs will only be exempted from tax (import duty, excise duty, and SST) until 31 December 2025. If you are considering to purchase an imported EV, submit your order by 31 December 2025.
Completely knocked down (CKD) EVs will still be exempted from tax until 31 December 2027. Some CKDs include: Proton, Perodua, BYD, Stellantis, Zeekr, Chery, and Xpeng.
Table of Contents
Timeline of EV duty exemptions
CBU EV duty exemption will end on 31 December 2025
The completely built-up (CBU) EV duty exemption, introduced under Budget 2022, was extended twice: first from end-2023 to end-2024, and again to end-2025.
However, in the Budget 2026 announcement, there was no mention of another extension, thus confirming that the exemption will officially end in 2026.
Imported EVs will be taxed starting January 2026
Imported fully assembled electric vehicles (EVs) will no longer enjoy duty-free privileges starting 1 January 2026, according to the Ministry of Finance (MOF).
Tesla has hinted on an RM20,000 increase in prices from losing the tax-free privileges.
Read more: Tesla EV prices will likely increase starting January 2026 – Here’s what we know
Higher excise revenue expected
With this change, the government projects overall excise duty collection to increase by 2.3%, reaching RM12.79 billion in 2026, compared to RM12.51 billion in 2025.
This expected growth will be driven by:
- Steady motor vehicle production,
- Introduction of new vehicle models,
- Increased promotional activities, and
- The removal of excise duty exemptions for imported (CBU) EVs.
CKD EV duty exemption is expected to run until 31 December 2027
In contrast, the duty exemptions for locally assembled EVs (CKD) remain in place until 31 December 2027. These include:
- Excise duty and sales tax exemptions for CKD EVs, and
- Import duty exemptions for EV components, valid until the same date.
Push for local assembly and manufacturing (CKD)
The removal of CBU EV exemptions aligns with the government’s push to promote local EV assembly and manufacturing.
Local manufacturers such as Proton which entered the EV market in late 2024, is assembling their Proton eMas 7 in Tanjung Malim, Perak, while Perodua is expected to debut its first EV by end-2025.
At the same time, major international players are strengthening their local presence:
- BYD (China) is developing an assembly plant in Tanjung Malim, Perak.
- Stellantis (Europe) has established a facility in Gurun, Kedah.
- Zeekr (China) is partnering with Proton for assembly in Tanjung Malim, Perak.
- Chery (China) has established a factory in Shah Alam.
- Xpeng (China) to start CKD by second half of 2026.
Malaysia’s long-term EV goals
Malaysia remains committed to its EV roadmap, which outlines ambitious adoption targets:
- 20% of new vehicle sales to be electrified by 2030
- 50% by 2040
- 80% by 2050
These goals reflect the government’s continued push toward cleaner transportation and a more sustainable automotive ecosystem, even as fiscal policies evolve.
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