Govt mulling levy on EV sales to fund public charging network
Investment, trade and industry minister Johari Ghani says Putrajaya cannot rely solely on vehicle manufacturers or distributors to undertake such investments.
Source: Free Malaysia Today · August 6, 2026 at 10:11 AM · AI-assisted report
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PUTRAJAYA, 6 AUGUST 2026 —
Investment, trade and industry minister Johari Ghani said a comprehensive, nationwide public charging infrastructure is essential to supporting wider EV adoption across the country. KUALA LUMPUR: The government is considering a levy on every electric vehicle (EV) sold for a fund to expand Malaysia’s public EV charging network, says investment, trade and industry minister Johari Ghani.
Market Impact
Speaking in the Dewan Negara today, Johari said the government faced constraints in financing a nationwide public charging infrastructure which he said was essential to supporting wider EV adoption across the country. "We may impose a levy on every EV sold and channel the proceeds to a dedicated fund to build public charging stations because we cannot rely solely on vehicle manufacturers or distributors to undertake such investments," he said.
Johari said the government had granted exemptions on import duty, excise duty and sales tax for completely built-up (CBU) EVs for four years to spur market growth and attract investment. However, he said this resulted in RM3.3 billion in lost tax revenue over the period, while investment in public charging infrastructure fell short of expectations.
"After four years, when we looked at the availability of public charging stations, the investment from EV industry players was simply not there," he said. As a result, the government decided not to extend the incentives for imported EVs but retained tax exemptions for completely knocked down (CKD) EVs until Dec 31, 2027, to continue supporting the development of the domestic EV industry.
No official decision yet on BYD's Tanjung Malim plant In a separate Bernama report, Johari said his ministry had yet to receive official confirmation from Chinese EV maker BYD on whether it would proceed with its planned investment in Tanjung Malim, Perak, under the conditions set by the government.
The ministry’s terms for BYD require the carmaker to export at least 80% of the cars produced in Tanjung Malim and price the remaining 20% above RM200,000 per unit. "Any decision to proceed with, defer, or revise its investment plans is a commercial decision for the company," he said.
On measures to ensure EV investments strengthen local vendor participation, increase the use of locally produced components, and facilitate technology transfer, Johari said incentives would only be granted to companies that genuinely contribute to the development of Malaysia’s automotive ecosystem. He said 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," he said. Johari said Proton and Perodua had developed a network of about 733 Tier 1, Tier 2 and Tier 3 vendors, which account for between 72% and 82% of the country’s automotive component manufacturing activities.
He said Malaysia would continue to welcome EV investments, provided they generate greater economic value through local vendor development, technology transfer and the creation of high-skilled jobs.
Related: Putrajaya