MAA proposes that new incentives should be for all electrified vehicles, not just battery EVs- paultan.org

The Malaysian Automotive Association (MAA) is proposing that new electrification incentives given under Budget 2024, which is set to be tabled in parliament on October 13, should be for all types of electrified vehicles (xEV) rather than just for battery EVs (BEV) in order to ramp up electro-mobility efforts in the country.

Its president, Mohd Shamsor Mohd Zain, said xEVs, which cover hybrid electric vehicles (HEV), plug-in hybrids (PHEV) and fuel-cell electric vehicles (FCEV) in addition to BEVs, would provide more traction for the segment.

“A step-by-step approach, starting from HEV, is the most ideal way to phase out the existing conventional internal combustion engine (ICE) vehicles. Hybrids are the first step towards the mass usage of electrified vehicles,” he told Bernama.

Mohd Shamsor said MAA hoped that the existing incentives of a RM2,500 rebate and road tax waiver for EVs will be extended to the purchase of all xEVs in both passenger and commercial vehicle categories.

The association also proposed that a personal income tax relief should be given for the purchase of a xEV as well as for the installation of solar panels at home. “The latter will support the energy mix of the government, in which renewable energy will form 17% of the total energy source by 2040,” he said.

On the subject of import and excise duty exemptions, Mohd Shamsor said MAA appreciated the government’s move to extend the two-year import duty and excise duty exemption for completely built-up (CBU) BEV units until 2025 and completely knocked-down (CKD) BEV units until 2027, as announced during Budget 2023.

Nevertheless, he said the association felt that the duration of incentives given to businesses was rather short. He explained that as the automotive industry is very capital-intensive, business plans are usually very long-term in nature.

“The tenure of incentives given to automotive companies should be on a long-term basis, and we encourage consultations with stakeholders and MAA on the most suitable incentive tenure. This will enable both local distributors and their overseas principals to study, prepare and draw up comprehensive long-term investment plans for the Malaysian market,” he told the national news agency.

A long-term policy would also help to build greater confidence among foreign investors, he said. “Short-term and/or ad hoc policies make it difficult for companies to draw up plans to evaluate business feasibility, especially in introducing newer technologies and more high-tech (technology) vehicle models into the local market,” he stated.

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