KUALA LUMPUR, May 6 — Starting July 1, imported electric vehicles (EVs) in Malaysia will face a mandatory RM200,000 minimum value and 180kW power floor as the government officially ends tax exemptions for entry-level models.

This new directive from the Ministry of Investment, Trade and Industry (Miti) signals a shift toward premium CBU imports, effectively closing the door on “budget” overseas-assembled EVs.

The announcement today follows the conclusion of a four-year special exemption period for completely built-up (CBU) EVs under the franchise AP system, which expired on December 31, 2025.

While the exemption has ended, Miti has clarified that existing inventory — including vehicles currently held in showrooms, at ports, or in transit — may still be sold under the previous tax-free stipulations until the stock is fully depleted.

Once the new regulations take effect in July, however, all fully assembled overseas imports must meet a minimum Cost, Insurance, and Freight (CIF) value of RM200,000.

Additionally, the minimum motor power requirement has been adjusted to 180kW and above, a slight reduction from the previous 200kW threshold.

These changes were formally communicated to franchise AP holders during an engagement session held on April 30.

For the Malaysian consumer, this shift marks a significant increase in the cost of going green.

Without the special exemptions, CBU EVs will now be subject to a sequential tax structure comprising a 30 per cent import duty, a 10 per cent excise duty, and a 10 per cent Sales and Service Tax (SST).

These taxes are applied cumulatively to the vehicle’s CIF value, drastically altering the final retail price.

Industry projections suggest that a hypothetical EV with a minimum CIF value of RM200,000 will see its cost rise to approximately RM286,000 after taxes, even before accounting for distributor margins and logistics.

For vehicles imported from non-Free Trade Agreement (FTA) countries, retail prices are expected to start between RM300,000 and RM350,000.

Even for models originating from FTA partners like China, which benefit from a lower 5 per cent import duty, the mandatory RM200,000 floor means showroom prices are unlikely to fall below the RM250,000 mark.

Miti maintains that these measures are necessary to ensure a transparent and balanced policy environment that supports the long-term development of the local automotive industry.

By setting these high entry barriers for imports, the government aims to protect national economic interests and encourage manufacturers to invest in local assembly (CKD) operations for more affordable EV models.