Malaysia EV policy 2026: Why EVs could become more expensive from July 1

KUALA LUMPUR: Malaysia’s EV market is going through another policy shift, and this one could have a major impact on the type of electric cars that brands can bring into the country.

The issue mainly involves fully imported EVs, also known as CBU EVs, and new conditions that are set to begin from July 1, 2026.

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Here are five simple things to know.

1. Fully imported EVs will need to meet new conditions

From July 1, 2026, CBU EVs brought into Malaysia will need to meet two main requirements. According to MITI’s announcement, fully imported EVs must have a minimum CIF value of RM200,000 and a minimum motor output of 180 kW, which is equal to around 245 PS.

CBU means the car is imported as a complete vehicle. CIF stands for cost, insurance and freight, which is basically the declared value of the car before local taxes, dealer margins, logistics, registration costs and other expenses are added.

So, the RM200,000 figure is not the showroom price. It is the import value.

2. The real selling price could be much higher than RM200,000

This is where many buyers may get confused. A minimum CIF value of RM200,000 does not mean these EVs will be sold for RM200,000.

Once other costs are added, the final retail price could be much higher. This is why some industry reports like Paul Tan's have suggested that the new rule could effectively push many CBU EVs closer to the RM300,000 price range.

That would change the market quite a lot, because many EVs currently compete below RM300,000. If imported EVs are forced upwards in price, the more affordable EV segment could become much smaller.

3. Affordable imported EVs could be affected the most

The new 180 kW power requirement is also important. Many lower-priced EVs are not built to be high-powered performance cars. They are designed to be efficient, practical and affordable.

Because of that, some EVs may not meet the new power requirement. Others may meet the power requirement, but may not meet the minimum CIF value. This means certain imported EVs could either become too expensive to sell competitively, or may no longer be eligible under the new conditions.

The biggest impact is expected to be felt in the lower and middle part of the EV market, especially where buyers are looking for EVs between roughly RM100,000 and RM300,000.

4. Local assembly will become more important

The new conditions are aimed at CBU EVs. That means locally assembled EVs, also known as CKD EVs, could become more important in Malaysia.

CKD means the vehicle is assembled locally from imported parts. Malaysia has already been offering incentives for locally assembled EVs, and previous reporting noted that CKD EV incentives are set to continue until the end of 2027, while the earlier full import and excise duty exemption for CBU EVs ended on December 31, 2025.

For car companies, this creates pressure to consider local assembly if they want to remain competitive. For buyers, this could mean more brands may eventually assemble EVs in Malaysia, but that process takes time, investment and planning.

5. Buyers may have fewer EV choices in the short term

The most immediate effect could be fewer choices for Malaysian EV buyers, especially those looking below RM300,000.

Premium EVs may be less affected because many of them already have higher prices and higher power outputs. But smaller, more affordable imported EVs could face a tougher time.

This does not mean every EV brand will disappear from the market. It means brands may need to adjust their strategy, but with the ever changing snap announcement in policy, what calculated strategy should they use?

Some may focus on higher-end models. Some may speed up CKD plans. Some may delay launches. Some may rethink whether certain models still make sense for Malaysia and some may even think why should we invest a CKD plant in Malaysia with a long term set goal when policy could change suddenly!

For consumers, the key thing to understand is simple: the EV market may become less crowded at the affordable end, at least for fully imported models, leaving no competition for the national car makers. Some have questioned is no competition a good thing?

Malaysia’s EV policy is moving towards a system where fully imported EVs must be more expensive at the import level and more powerful. At the same time, local assembly is becoming a more important path for car brands that want to keep prices competitive.

For now, the biggest question is how do car companies react before the new rules begin on July 1, 2026?. Until then, buyers may want to pay close attention to current EV prices, launch plans and whether a model is CBU or CKD.

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