According to the Malaysia Energy Handbook 2020 published by the Energy Commission, the transportation sector accounts for the biggest energy consumption at 36.4%. The sector is recognised as the second biggest driver of CO2 emissions in the country with a consumption that is equivalent to 28.8% of total fossil fuel combustion.
Recognising this challenge, Malaysia has made a proactive effort and subsequently achieved significant progress to decarbonise its transportation sector. Earlier this year, the government announced a target of placing 1.5 million EVs on the road by 2040 followed by numerous initiatives aimed at advancing the industry. The mission has been well received by key stakeholders from power utilities, industry players, automobile manufacturers to property developers with a common goal of helping the nation decarbonise its transportation sector, ultimately achieving its climate goals.
One key player in championing the implementation of EVs in Malaysia is the Zero Emission Vehicle Association (ZEVA). Established in 2019, ZEVA is a non-governmental organisation (NGO) set up to bring together like-minded stakeholders in the transportation ecosystem focusing on advocating for a cleaner environment via the adoption of Battery Electric Vehicles (BEVs). The consist of utilities and power producers such as Tenaga Nasional Berhad and Sarawak Energy; automobile manufacturers such as BMW Group Malaysia and UMW Toyota Motor; industry players such as Green EV Charge, Chargehere EV Solution and SolarVest; as well as other interested parties such as Accenture.
ZEVA is a non-governmental organisation (NGO) set up to bring together like-minded stakeholders in the transportation ecosystem focusing on advocating for a cleaner environment via the adoption of Battery Electric Vehicles (BEVs)
Focused on its mission to improve EV uptake in the country, the organisation is working closely with the government to propose and activate various initiatives towards this purpose. Part of its proposal covers infrastructure development, establishing matching grants for research and development (R&D) and extending existing incentives from 2024 to 2030, allowing room for the industry to respond and grow.
In 2022, the Malaysian government introduced several incentives to drive the adoption of EVs. These incentives include tax exemption and free road tax for EVs as well as subsidies for the installation of charging infrastructure. Since then, Budget 2023 incorporated extensions for EVs on duties and tax exemption – fully-imported (Completely Built Up) EVs will be extended for an additional year to December 31, 2025, similarly, the excise duty and sales tax exemption for locally-assembled (Completely Knocked Down) EVs have also been prolonged for an extra two years. Meanwhile, 100% income tax exemption from 2023 to 2032 year of assessment will be given to EV charging equipment manufacturers alongside a five year 100% investment tax allowance. As a result, Malaysia saw a boom in the number of EVs on the road with 860% growth in 2022 compared to the previous year, proving that an extension in incentives is much needed to grow this further.
Naturally, any new implementation comes with its set of challenges. For EVs in particular, accelerating interest and uptake would mean addressing range anxiety due to the lack of charging infrastructure, the high cost of EVs, and the limited range of available models. Through stakeholder collaboration, ZEVA is working on addressing these challenges and enabling a more comprehensive EV charging infrastructure, lowering EV taxes and expanding the local selection with more affordable and longer-range EV models. This joint effort is done concurrently with ZEVA’s efforts to raise awareness of the benefits of EVs among the public.
In an exclusive interview with ZEVA’s president, Wan Ahmad Zam Zam bin Wan Abd Wahab, Energy Watch gathers insight into the exciting progress of the EV industry in Malaysia.