Budget 2022 perks bring down barriers to electric car ownership

KUALA LUMPUR: The incentives for electric vehicles (EV) are aimed at encouraging ownership of such vehicles among the people and also to support local industry players, says Datuk Seri Mohamed Azmin Ali.

The International Trade and Industry Minister said the incentives were part of an effort by the ministry and came following discussions with the Finance Ministry.

"Based on the discussions, the government had announced full exemptions of import duty, excise duty, as well as sales tax for electric vehicles (EVs)," he told a press conference in Parliament today.

Earlier, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz, in his Budget 2022 presentation in Parliament, said a 100% road tax exemption will also be given to EVs.

"The government sees the potential of EVs as it is energy efficient and also helps to reduce air pollution,” he said.

The government is also giving tax income exemption for individuals of up to RM2,500 on the cost of purchase, installation, rent, hire purchase as well as subscription fees for EV charging facilities.

A few fully electric cars, otherwise known as battery electric cars, are already selling in Malaysia such as Nissan LEAF, Porsche Taycan and Taycan Cross Turismo, and MINI Electric.

BMW Group Malaysia has already been taking pre-bookings for the all-electric BMW iX and iX3 which will arrive next year.

The company is also attracting consumer interest for the i4, an electric coupe.

As for Volvo, it will introduce an all-electric XC40 SUV.

Zafrul also announced that the government will extend the 100% sales tax exemption for completely knocked down (CKD) passenger vehicles and a 50% discount for completely built-up (CBU) cars, including multi-purpose vehicles (MPV) and sports utility vehicles (SUV) for six months until June 30 next year.

This year, Miti expects to attract RM200bil worth of investments, creating an estimated 114,000 jobs, added Azmin.

"Most of the foreign direct investments (FDI) are expected to come from the manufacturing sector, which is about RM140bil," he said.