KUALA LUMPUR (Feb 21): Fitch Solutions Country Risk and Industry Research anticipates that passenger electric vehicles (EV) sales in Malaysia will expand in 2023, albeit from a low base, as a result of the implementation of incentives to encourage adoption.

In a report on Monday (Feb 20), the firm said that according to its projections, sales of passenger EVs will rise by 82.0% in 2023, reaching a volume of roughly 5,840 units annually.

“As more battery electric vehicles (BEVs) are introduced and give consumers more options, we predict that plug-in hybrid electric vehicles (PHEVs) will lose market share in 2023.

“Since predicted good performance in both PHEVs and BEVs promotes EV adoption, we predict that total EV sales as a percentage of total sales will surpass the 1% threshold by 2024,” 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 (US$600) 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 (CKD) 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.

The firm said Volvo Car Malaysia (VCM) has revealed intentions to export automobiles to Vietnam and the Philippines in 2023, in an effort to turn Malaysia into a hub for electric vehicles.

“With the Swedish brand’s return to the nation (via PT Leading Vision Otomotif), the firm started exporting automobiles to Indonesia in 2022; Thailand has been on its export list for some time.

“The XC40 Recharge Pure Electric and C40 Recharge Pure Electric are currently both locally built (CKD) in Shah Alam, with the former debuting first in March 2022 and the latter following in December 2022,” Fitch Solutions said.