Govt defends revised CBU EV policy, says measures needed to support ecosystem growth

KUALA LUMPUR: The government has defended its revised policy for fully imported electric vehicles (EVs), saying the measures are necessary to balance faster EV adoption with the development of Malaysia’s local automotive ecosystem.

Deputy investment, trade and industry minister Sim Tze Tzin told the Dewan Rakyat that the government took a different approach to EVs and internal combustion engine (ICE) vehicles as the two industries were at different stages of development.

He said the import policy for completely built-up (CBU) ICE vehicles had long been based on engine capacity, where only vehicles with engine capacities of 1,800cc and above are allowed to be imported into the country.

“For EVs, the government needs to balance two objectives simultaneously: accelerating EV adoption among the rakyat and developing the local assembly industry, supply chain and the overall EV ecosystem so that Malaysia is not merely a consumer market,” he said.

Sim also said the tax and incentive structures for EVs and ICE vehicles were different, with EVs currently subject to an excise duty rate of only 10%, compared with higher rates for ICE vehicles based on engine capacity, vehicle type and localisation levels.

He said the lower excise duty rate for EVs made it more important to accurately determine import values to ensure the correct tax assessment and reduce the risk of under-declaration.

“Hence, setting a minimum cost, insurance and freight (CIF) value is one of the policy mechanisms to reduce the scope for under-declaration and ensure that government revenue collection is protected,” he said.

Sim was responding to a question from Larry Sng (PBM-Julau) on why the minimum CIF value requirement of RM200,000 and minimum power output of 180 kilowatts apply only to fully imported EVs.

Responding to a question from Ku Abd Rahman Ku Ismail (PN-Kubang Pasu) on measures to address the shortage of EV charging facilities nationwide, Sim said Putrajaya was streamlining policies and incentives to accelerate EV ecosystem development, including expanding charging infrastructure.

He said the government was working with various stakeholders, particularly Tenaga Nasional Bhd, to build more power substations to ensure sufficient electricity supply for EV charging facilities.

Sim said the government was also discussing incentives for charging facility operators to encourage the development of more charging stations.

“If there are no substations, charging facilities cannot be built because there is insufficient power supply,” he said.

“This requires incentives, appropriate policies and the development of the entire ecosystem.”