KUALA LUMPUR (Dec 1): Fitch Solutions Country Risk and Industry Research expects passenger electric vehicle (EV) sales in Malaysia to expand rapidly in 2023, albeit from a low base, due to the introduction of incentives to boost adoption.

In a report on Wednesday (Nov 30), the firm forecast passenger EV sales to increase by 45.6% in 2023 to reach an annual sales volume of around 4,449 units.

“We expect plug-in hybrid electric vehicles (PHEVs) to lose market share in 2023, as the introduction of more battery electric vehicles (BEVs) offer consumers additional models to choose from.

“We forecast that total EV sales as a percentage of total sales to breach the 1% mark by 2024, as an expected strong performance in both PHEVs and BEVs accelerates EV adoption,” it said.

Fitch Solutions said Malaysia has unveiled measures to promote and stimulate EV adoption through incentives.

It said a road tax exemption for EVs has now been implemented, along with a subsidy of RM2,500 for EV charging infrastructure purchases by consumers.

Furthermore, it said a 100% reduction in import duties on completely built-up EVs lasting up to Dec 31, 2023 has been introduced.

Completely knocked-down EVs will be eligible for the suspension of duties until Dec 31, 2025, along with sales tax and excise duty exemptions, which will further improve the affordability for consumers due to the inherently high taxes on importing vehicles into the country.

Fitch Solutions said Malaysia is well positioned to increase the assembly of battery packs, as existing players in the country take advantage of potentially higher demand for batteries due to automakers ramping up their EV offerings.