Southeast Asian Country Moves to Tighten Rules on Imported EVs

A new directive from Malaysia's Ministry of Investment, Trade and Industry (MITI) signals a shift toward importing premium vehicles, effectively shutting the door on low-cost EVs from abroad.

The announcement was made on May 6 after the end of the four-year special tax exemption period for completely built-up (CBU) EVs under the AP permit system, which expires on Dec. 31, 2025.

Although the tax exemption period has ended, MITI clarified that existing inventory - including vehicles currently on display at showrooms, at ports or in transit - can still be sold under the previous tax exemption rules until stocks run out.

However, when the new rules take effect in July, all fully imported EVs from abroad must meet a minimum CIF value (the value of imported goods including freight and insurance to the importing country's port or border gate) of RM200,000.

In addition, the minimum power output requirement has been adjusted to 241 horsepower or more, slightly down from the previous threshold of 268 horsepower.

These changes were officially communicated to authorized permit holders at a consultation meeting held on April 30.

For Malaysian consumers, the change marks a significant increase in the cost of switching to greener vehicles.

Without special exemptions, fully imported EVs will now be subject to a sequential tax structure including a 30% import duty, a 10% excise duty and a 10% sales and service tax (SST).

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

Industry projections show that a hypothetical EV with the minimum CIF value of RM200,000 (US$51,000) would see its cost rise to around RM286,000 (US$72,940) after taxes, even before distributor margins and logistics costs are included.

For vehicles imported from countries outside Free Trade Agreements (FTA), retail prices are expected to start at RM300,000-350,000 (US$76,500-89,300).

Even for models originating from FTA partners such as China, which benefit from a lower 5% import duty, the mandatory RM200,000 minimum price means showroom prices are unlikely to fall below RM250,000 (US$63,800).

MITI said these measures are necessary to ensure a transparent and balanced policy environment that supports the long-term development of the domestic automotive industry.

By setting such high import barriers, the Malaysian government aims to protect national economic interests and encourage manufacturers to invest in domestic completely knocked down (CKD) assembly to produce more affordable EV models.

In 2025, Malaysia's best-selling EV was the domestic Proton eMas7, a twin model of the Geely Galaxy E5. In second place was the imported BYD Sealion 7, priced at RM183,800-199,800 (US$46,900-50,960). Most of the rest of the top 20 were imported vehicles.

My Anh (according to Malay Mail)