KUALA LUMPUR, Aug 4 — The government is considering imposing a levy on every electric vehicle (EV) sold to establish a fund for expanding Malaysia's public EV charging network, said Investment, Trade, and Industry Minister Datuk Seri Johari Abdul Ghani.
The proposal is being studied as the government faces constraints in financing a nationwide public charging infrastructure on the scale seen in China.
"We may impose a levy on every EV sold and channel the proceeds into a dedicated fund to build public charging stations because we cannot rely solely on vehicle manufacturers or distributors to undertake such investments," he said during question time in the Dewan Negara today.
Johari was responding to Senator Datuk Leong Ngah Ngah's supplementary query regarding the government's preparedness for the growing adoption of EVs
He added that the government had previously granted exemptions from import duty, excise duty, and sales tax on completely built-up EVs for four years to spur market growth and attract investment.
However, the incentives resulted in RM3.3 billion in forgone tax revenue over the period, while investment in public charging infrastructure fell short of expectations.
"After four years, when we looked for public charging stations, the investment from EV industry players was simply not there," Johari said.
As a result, the government did not extend the incentives for imported EVs but retained tax exemptions for completely knocked-down EVs until December 31, 2027, to continue supporting the development of the domestic EV industry.
Responding to Senator Tan Sri Low Kian Chuan's supplementary query on measures to ensure that EV investments strengthen local vendor participation, increase the use of locally produced components, and facilitate technology transfer, he said that incentives would be granted only to companies that genuinely develop Malaysia's automotive ecosystem.
Companies seeking government incentives must integrate local suppliers into their supply chains and support the growth of domestic vendors and component manufacturers.
"If companies bring in all their components from overseas, assemble and sell vehicles here, and expect incentives, we cannot allow that because it would undermine the automotive ecosystem we have built over the past 30 to 40 years," Johari said.
The minister noted that Proton and Perodua have developed a network of about 733 Tier One, Tier Two, and Tier Three vendors, which account for between 72 and 82 per cent of the country's automotive component manufacturing activities.
Malaysia will continue to welcome EV investments, provided they generate greater economic value through local vendor development, technology transfer, and the creation of high-skilled jobs.
On EV adoption, he said that the lack of public charging infrastructure remained the biggest challenge, particularly for residents of apartments and People's Housing Programme (PPR) projects who were unable to install chargers at their homes.
Although EVs represent the future of mobility, a comprehensive public charging network is essential to support wider adoption across the country.
