Higher EV import prices from July 1 risk slowing Malaysia’s momentum

KUALA LUMPUR – For years, Danil Roslan imagined his next vehicle would be a pick-up.

But after test-driving an electric vehicle (EV) earlier this year, the 36-year-old video content creator found himself rethinking that plan.

“Like most people, I didn’t think EVs were practical in Malaysia, especially with our balik kampung traffic jams,” he told The Straits Times. “Balik kampung” is a Malay phrase meaning “returning to one’s home town or village”, especially during holidays or festive seasons, to visit family.

“But that has been proven wrong. EVs are cool and everyone wants one,” he added.

With his Chevrolet Aveo approaching its 20th year and maintenance costs mounting, Danil has begun shopping for a replacement. An EV tops his wish list.

Whether he can afford one is another question.

Just as growing numbers of Malaysians are warming to electric cars, a new rule set to take effect from July 1 is expected to push the prices of many fully imported EV models sharply higher, potentially putting them beyond the reach of middle-income buyers.

The move has reignited debate over Malaysia’s electric mobility ambitions, with critics warning that efforts to protect the domestic automotive industry could come at the cost of affordability just as more consumers begin warming to electric vehicles.

Malaysia’s trade ministry has been under the spotlight over its handling of EV import rules: Fully imported models are expected to be priced significantly higher under a new framework that raises the entry threshold from around RM200,000 (S$64,000) to upwards of RM300,000, effectively shifting them into the luxury segment.

“If the price goes that high, then it’s no longer something normal people can consider,” Danil said.

Prime Minister Anwar Ibrahim has repeatedly highlighted the fiscal burden of fuel subsidies, which have been reported to run into billions of ringgit monthly amid volatility in global oil markets.

At the same time, Malaysian consumers who were once sceptical about EVs have, over recent years, become more open to electric-powered mobility following tax incentives aimed at accelerating adoption.

For some observers, the latest policy shift signals a renewed emphasis on protecting Proton and Perodua, a stance that has drawn debate given their ownership structures involving foreign partners.

The new regulations will not affect locally assembled EVs by the two national carmakers, which will remain fairly affordable. The Proton e.MAS 5 starts at around RM60,000, while Perodua’s QV-E costs about RM80,000 (excluding the battery).

Malaysia spent years using tax incentives to encourage drivers to switch to electric cars. Now, just as interest is beginning to build, new import rules threaten to push many models out of reach.

Viewed with scepticism a decade ago, EVs have since gained ground, with many models now offering acceleration comparable with high-end petrol-powered cars and ranges similar to internal combustion engines.

While Tesla is widely credited with reshaping global perceptions of EVs, Chinese manufacturers have since become major challengers, aggressively expanding across South-east Asia, including Malaysia.

Government vehicle registration data shows that EV adoption has picked up sharply, with registrations rising 113.7 per cent in the first quarter of 2026. Proton’s e.MAS led sales, followed by China’s BYD.

But the recent policy shift has left would-be buyers like Danil facing uncertainty. Under the revised framework, imported vehicles must have a declared cost, insurance and freight value of at least RM200,000, pushing on-the-road prices to around RM300,000.

The ruling also requires imported EVs to have a minimum motor output of 180kW, from 200kW previously, effectively ruling out lower-powered models such as the BYD Dolphin, Atto 3 and M6, as well as the GWM Ora Good Cat and MG4.

Shahrol Azral Ibrahim Halmi, president of the Malaysian Electric Vehicle Owners Club, said many would-be buyers were disappointed by the new rules.

“Soon, CBU EVs will be more expensive, and there will be fewer choices under RM200,000,” Shahrol said, referring to completely built-up (CBU) or fully imported vehicles.

“Meanwhile, there aren’t that many CKD models yet,” he added, referring to completely knocked-down (CKD) vehicles assembled locally with imported parts.

With imported EVs effectively pushed into the RM300,000 range, they would sit alongside luxury petrol-powered models such as the Mercedes-Benz E-Class and BMW 5 Series.

“EV enthusiasts feel this will deprive them of the latest models and newest technology,” Shahrol said.

“This is especially painful given how fast things are developing within the EV space, such as BYD’s megawatt flash-charging technology.”

While import restrictions are often used to protect local industries, the new rules are also affecting plans by manufacturers seeking to establish local assembly operations in Malaysia.

Under the framework, at least 80 per cent of locally assembled cars must be exported, while the remaining 20 per cent sold domestically cannot be priced below RM100,000.

The export requirement has stalled BYD’s planned assembly plant in Tanjung Malim, Perak, Trade Minister Johari Abdul Ghani told local business publication The Edge in March.

Meanwhile, Shah Fariq Aizal, spokesman for youth-centric political party Muda, said the policy risks framing EVs as luxury goods rather than a pathway to reduce dependence on fossil fuels.

“With diesel and RON97 prices around RM5 per litre, restricting access to ‘cheap’ EVs is a policy that pressures the young and middle class,” he told ST.

“Malaysia cannot become a country where only the rich can enjoy green technology and next-generation transportation.”

Uncertainty over the changes is also affecting current EV owners, who worry about after-sales support for models that may no longer meet the 180kW threshold.

Lawyer Shahir Tahir said after-sales support was a key factor in his decision to buy a BYD Dolphin in 2024, his very first EV.

“Many people bought BYD or other brands after surveying everything, particularly the after-sales services,” said the 39-year-old.

“Knowing Sime Darby is the anchor dealer, consumers will have less worry about its after-sales support.”

Sime Darby Motors, the automotive arm of Malaysian conglomerate Sime Darby Berhad, is BYD’s distributor in Malaysia, helping to build trust in a relatively new Chinese brand.

Encouraged by the Dolphin’s performance, Shahir later sold his second car and bought another EV, the Zeekr 7X by Chinese carmaker Geely, making his household fully electric.

He bought this EV in late 2025 during the special tax exemption period.

“But the policy keeps changing,” he lamented.