4-6-2024 (KUALA LUMPUR) The Malaysian government has announced that electric vehicle (EV) users will be subject to motor vehicle licence fees based on their vehicle’s motor power starting from January 1, 2026. This new fee structure, unveiled by Transport Minister Loke Siew Fook today, aims to strike a balance between encouraging the adoption of zero-emission vehicles and managing the impact on government revenue.
Addressing reporters at a press conference at the Transport Ministry in Putrajaya, Loke clarified that the revised fee rate would only be applicable to two categories of zero-emission vehicles: battery electric vehicles (BEVs) and fuel cell electric vehicles (FCEVs). “On average, the new motor vehicle licence fee is 85% lower compared to the current fee rate,” he affirmed, highlighting the government’s commitment to incentivizing the transition to cleaner transportation alternatives.
Currently, EV owners in Malaysia are exempt from paying road tax, an initiative that will remain in effect until December 31, 2025. However, with the impending introduction of the new fee structure, the government aims to establish a sustainable framework for the long-term growth of the EV market while ensuring fiscal responsibility.
Loke elaborated on the specifics of the new fee structure, explaining that the power range of vehicles has been divided into “blocks” for the determination of the road tax fee. Block 1 encompasses ZEVs with electric motor power ranging from 1 watt to 100 kilowatts (kW), while Block 2 covers vehicles with power outputs between 100,001 watts and 210kW. Block 3 is reserved for the most powerful EVs, with motor power ranging from 210,001 watts to 310kW.
The fee structure is designed to be progressive, with incremental increases based on the vehicle’s motor power. In Block 1, the road tax fee increases by RM10 for every 10kW increase in power, meaning that a 70kW vehicle would be subject to a fee of RM40, while an 80kW vehicle would be charged RM50. Similarly, in Block 2, the fee increments are RM20 for every 10kW increase, and in Block 3, the increment is set at RM30 for every 10kW.
To illustrate the implications of the new fee structure, Loke provided examples citing popular EV models. He stated that the road tax for the 130kW BYD Dolphin premium standard range would be RM120, compared to the existing fee of RM624 if the tax exemption were not in place. Similarly, for the 220kW Tesla Model Y, the road tax would be RM305, a significant reduction from the current fee of RM2,583.
Recognizing the need for periodic review and adjustment, Loke emphasized that the fee structure would be reassessed at least every five years. This measure aims to ensure a smooth transition to zero-emission vehicles while managing the impact on government revenue streams.
In addition to the new fee structure, Loke also announced that vehicle manufacturers would be required to issue special plates for EVs, distinguishing them from internal combustion engine cars. This move is expected to facilitate easier identification and monitoring of the growing EV population on Malaysian roads.
