Malaysia is considering targeted EV incentives

The government is currently studying targeted incentives to make electric vehicles (EVs) more accessible to a broader segment of Malaysians, with evaluations focusing on the total cost of ownership rather than just vehicle retail prices.

Transport Minister Anthony Loke stated that the Ministry of Transport (MOT) is looking into several targeted approaches to widen EV adoption, though any final decisions will only be unveiled through Budget 2027 based on fiscal feasibility and policy efficacy.

He was responding to Bukit Bintang’s MP, Fong Kui Lun, who inquired whether the government plans to offer targeted EV incentives or subsidies to ease public transport expenses alongside the rollout of targeted petrol subsidies, and what mechanisms are under consideration for Budget 2027.

“The government is examining approaches to ensure that EV adoption becomes more affordable and can be enjoyed by a wider group of people,” Loke said in a written parliamentary reply (pdf) dated 2 November 2026.

“The government’s approach does not merely look at the purchase price of the vehicle, but the overall cost of ownership and usage, so that the benefits provided genuinely assist in reducing the public’s transportation expenditure.”

Loke clarified that the targeted RON95 petrol subsidy rationalisation and national EV adoption policies are two separate policy instruments. While targeted RON95 subsidies are aimed at ensuring fuel assistance reaches eligible citizens, the EV framework is driven by tax incentives, charging infrastructure, and local industrial manufacturing.

According to the minister, several targeted measures are under consideration:

Loke stressed that any future assistance must fulfil specific criteria. Current EV support includes an individual income tax relief of up to RM2,500 for residential EV charging facilities (claimable through Year of Assessment 2027), alongside existing incentives for local EV assembly and manufacturing.

While the parliamentary reply confirms the government is studying future consumer incentives, no direct purchase rebates or new consumer subsidies for EV buyers were introduced during the tabling of Budget 2027 by Prime Minister Datuk Seri Anwar Ibrahim last month.

Furthermore, despite the minister highlighting charging infrastructure expansion as a pillar of adoption, Budget 2027 SCALED BACK key tax shields for commercial charging station operators.

Under the revised Green Investment Tax Allowance (GITA Project) for Charge Point Operators (CPOs) taking effect 1 January 2027, the investment tax allowance rate will be cut from 100% to 60% of qualifying capital expenditure, while statutory income set-off will be capped at 70% instead of the current 100% deduction.