Despite consumer enthusiasm, Malaysia’s EV market still lags that of regional peers. Analysts do not expect the market to catch up in the short term.
According to an op-ed in the Business Times, In the first eight months of 2025, 23,396 EVs were registered in Malaysia – a 63 per cent year-on-year increase. Yet, EVs still accounted for just 4.2 per cent of total vehicle sales during that period, while in neighbouring Thailand, EVs make up 20 per cent of new car sales. In Singapore and Vietnam, the figure is 40 per cent.
The column quoted Aritra Jana, partner at Kearney, who estimates that EV adoption in Malaysia could reach 9.6 per cent by end-2025 though it would still leave Malaysia far behind the regional curve.
IT said that the Malaysian government has pledged to make EVs 15 per cent of new car sales by 2030.
It also quoted Yichao Zhang, partner at AlixPartners, who observed that Malaysia’s market is at an early stage of adoption, dominated by early adopters rather than the mass market. “We don’t expect it to catch up with regional peers in the short term,” he added.
Among others, one major issue cited is that Malaysia’s current EV incentives – which include import and excise duty exemptions, sales tax waivers on locally assembled EVs, and individual income tax relief – primarily target consumers.
It also noted that experts argue that while the Malaysian government has in place the Green Investment Tax Allowance (GITA) as a major tax incentive scheme to encourage both companies and projects to invest in green technology and solutions, these policies fall short in accelerating crucial charging infrastructure development or bridging the cost gap with internal combustion engine (ICE) vehicles.
Another reason cited is the installing of alternating-current charger – the cheaper but slower option – costs around RM25,000 to RM30,000 per bay, while faster direct-current units, which deliver 60 to 80 kilowatts of power, can run up to RM180,000 each.
It noted that banks hesitate to provide large amounts of financing because the industry lacks utilisation data. Though they do still lend, they do so in smaller amounts so they can monitor the industry and utilisation growth.
