If ICE cars follow the new electric-based road tax structure, will it be cheaper or more expensive?

Surely you have heard about it New road tax structure for electric vehicles (EV), announced by the Ministry of Transport this week. Set to apply from 1 January 2026, the electric vehicle road tax structure will replace the electric vehicle road tax. Previous model from 2019 and to encourage the adoption of electric vehicles at a relatively lower rate than that of internal combustion engine (ICE) vehicles.

Unlike ICE vehicles, which are taxed based on engine capacity, electric vehicles do not have an engine, so what is measured in battery-powered cars is power, typically measured in kilowatts (kW) for electric vehicles. , as opposed to PS/hp, which is higher than is common with ICE vehicles in Malaysia. One horsepower is equivalent to 0.746 kW, 100 horsepower = 74.6 kW.

The electric vehicles are then grouped into different engine(s) output power ranges, in the same way as ‘cc’ for engines. We have comprehensively explained the road tax structure for new electric vehicles and you can watch it here along with one Road tax list for all electric vehicles currently sold in Malaysia.

But what about ICE cars, which the majority of Malaysians own and will continue to own for the foreseeable future? Will there be a change in the way road tax is calculated based on power instead of engine capacity? Unfortunately no, the government has confirmed. So, going forward, road tax for electric vehicles will be based on kW and ICE will continue to be based on cubic capacity.

It is ancient. Even before electric vehicles became mainstream here, loopholes were created through the cc-based ICE road tax format, first with downsized turbos and then with plug-in vehicles. -in hybrid. Both of these powertrain developments ‘cheat the system’ with lower capacity engines, supplemented by turbochargers or electric motors in the case of PHEVs to make up for the lack of power deficit.

Various examples include a Nissan Almera worth RM90+k paying the same RM20 road tax as a Perodua Axia E worth RM22k (both 1.0L), a Toyota Vios paying the same tax Similarly, a Honda HR-V Turbo (both 1.5L) and a Mercedes-Benz A200 (1.3L) pay less road tax than a Proton Persona (1.6L). A Toyota Camry owner pays less road tax than his friend who owns a BMW 530i (RM867 vs. RM379). An example of a small engine with very high power is the Mercedes-AMG A45S, a 2.0L engine that produces 421 PS.

An energy-based road tax structure will also apply better to hybrids and PHEVs, as currently, the electrified power in those cars is not taxed. That’s exactly how we got one BMW i8 worth RM1.2 million with its sci-fi look and scissor doors pay only RM90k in road tax (1.5L engine), while Mercedes-AMG GT (4.0L V8) owners pay RM6.5k per year .

And then there’s the topic of used cars. Do you remember the old days when the number on the trunk lid of a car corresponded to the size of its engine? Those cars – mainly European – are now affordable (to buy) and many still have life left with some TLC, but high road taxes relative to the car’s current value have made Many people had to step back. Many older cars with large engines (but relatively low power in today’s context) are scrapped because it costs too much to keep them legal on the road.

Take a look at the list we’ve compiled, comparing ICE cars’ theoretical kW-based road tax (just like for electric vehicles) with their actual road tax. Save for a few exceptions – mainly PHEVs or cars with small turbo engines – many cars will have lower road tax, some substantially so. The biggest difference comes from the pickup truck segment (Hilux and Triton, down over 80%) and supercars/luxury cars from Ferrari and Rolls-Royce (Ghost -92.4%). Is your car on the list? Check how much you would pay if road tax was based on electricity.

We understand that road tax is one large source of revenue for the government, raked in nearly RM3 billion from vehicle owners last year from this avenue alone, so the road tax reduction certainly doesn’t benefit them, especially for high-end cars. For those who think road tax on electric vehicles is still too expensive, we hope that this little exercise has given you some context.

Instead, a kW-based road tax system benefits electric vehicle users, in line with the government’s green agenda. Let’s apply this system on ICE cars – what the authorities have said There are no plans to – and we could see a reduction in road tax on the majority of cars on the road. If anyone complains…

Those are ICE drivers, who are paying higher taxes than electric vehicles of similar capacity, and we’re not even talking about torque and acceleration, the actual things that make electric vehicles possible. feels much more ‘powerful’ than their kW figures suggest. It would be fair if road tax on ICEs and electric vehicles were calculated on the same scale, but we do not expect this to happen for the reasons outlined above. Current exchange rate “It was low and reasonable,” Anthony Loke said.

Propose? ICE cars could adopt a kW-based road tax structure but at a higher tax rate than the current EV model. This will future-proof the structure against the growth of electrified engines and downsizing, while charging for more powerful engines (as it should). The removal of cc for electricity could result in a reduction in road tax revenue, but this could then be balanced by high-capacity cars (the main beneficiaries of kW-based road taxes) consuming more more gasoline, and this general subsidy will be eliminated at any time. What do you think?

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