Although a slew of incentives and tax exemptions have been included in the federal budget for electric vehicles, consumers remain hesitant to give up gasoline-powered vehicles.
A car dealership has called on the government to have a clear roadmap for electric vehicles (EVs) to boost confidence in the industry and hasten adoption of the technology.
G-Mart Group, whose subsidiary EVCar.my imports and sells electric vehicles locally, said Putrajaya needed clear policies to chart the way for EV adoption in the country for the next 20 to 30 years.
Its business development director, Nicholas Dev Kaneson, said the current incentives for EVs, such as import and excise duty and road tax exemptions, were set to end within a few years and would cause uncertainty among consumers.
“What happens if the initiatives don’t continue? What happens if the government changes?
“The instability is at the back of the minds of the people who are thinking, ‘let me wait until things get a little bit clearer and a little more stable before I put my money down’ (to purchase EVs),” he told FMT.
The government included various incentives and tax exemptions for electric vehicles (EVs) in its federal budget earlier this year in view of its environmental, social and governance ambitions.
The import and excise duty exemptions for fully-imported completely built unit (CBU) EVs were extended until Dec 31, 2025.
The excise duty and sales tax exemptions for locally-assembled completely knocked down (CKD) EVs were extended until Dec 31, 2027, while the import tax exemption period for components used in locally-assembled CKD EVs was also extended until then.
EVs are also currently exempted from road tax until Dec 31, 2025.
Putrajaya is also providing manufacturers of EV charging equipment a 100% income tax exemption from this year until 2032 as well as offering these manufacturers a 100% investment tax allowance for a period of five years.
However, sales of EVs remain low as prices continue to be at a premium.
The Malaysian Automotive Association said 2,631 EVs were sold in the country last year compared to a total of 720,658 vehicles equipped with internal combustion engines. The cheapest EV available in Malaysia currently retails for about RM140,000.
Nicholas said the sales of EVs would continue to pale in comparison to gasoline vehicles as long as petrol and diesel prices remained cheap, adding that the price of EVs would remain exorbitant as a result.
He said the government was unlikely to increase fuel prices to boost EV sales as the move would trigger uproar among people from all income brackets.
“Fuel prices are a very taboo topic. If anybody were to touch fuel prices, it’s going to affect the very bottom to the very top (income groups),” he said. “There will be a domino effect, even if prices were to be increased by 10 or 15 sen.”
Alternatively, the government could emulate London and introduce an “ultra low emission zone” in the Kuala Lumpur city centre, barring gasoline-powered vehicles from entering the area or incurring a hefty fee to boost the uptake of EVs, Nicholas added.
Meanwhile, Federation of Malaysian Consumers Associations (Fomca) CEO Saravanan Thambirajah said the government must have policies to protect those who purchase EVs, especially when it comes to the maintenance and repair of the vehicles.
He said Putrajaya should also “revolutionise” market conditions and get local car manufacturers involved in producing their own EVs to lower prices.