Analysts have foreseen electric vehicles (EVs) to gain tractions in Malaysia underpinned by EVs-related investment in the country.

Maybank Investment Bank said in its recent report that EV-related investments began gaining traction in the first half of 2025 in Malaysia as the current exemptions on import and excise duties for completely built-up (CBU) EVs, as well as restrictions on importing CBU EVs priced below MYR 100,000 ($23,881), are set to expire at end-2025.

This momentum is expected to continue into the second half of 2025.

Notably, Malaysian national car Proton has commenced construction of its dedicated EV plant in Tanjung Malim (estimated capital expenditure [capex]: MYR 82 million [$19.58 million]), with an initial annual capacity of 20,000 units targeted for completion by year-end.

The country’s another national automaker Perodua is also doubling its capex to MYR 1.6 billion ($380 million) in 2025 as it prepares to launch its first in-house developed EV by end-2025.

Channel checks indicate that other brands, including Chinese automaker BYD, XPeng, and Dongfeng, are also actively establishing local supply chains for their EV models.

Meanwhile, TA Securities said in a report that 2025 marks a further escalation in competition within the EV space in Malaysia, as new models from a wide range of brands including the Zeekr 009, Renault 5, Mercedes Benz G Class, Xpeng G6, Peugeot e 2008, Porsche Macan Electric, Perodua EMO, and Proton eMas enter the Malaysian market.

Currently, consumers have access to more than 40 EV models, reflecting a rapidly expanding portfolio.

Meanwhile, Chinese automakers such as BYD, Chery, Xpeng, and Geely continue to expand their footprint by offering feature-rich models at competitive prices.

At the same time, premium brands like BMW, Mercedes Benz, and Porsche are stepping up efforts to introduce their electric lineups, aiming to capture early ground in the luxury EV segment.

In the first quarter of 2025, xEV sales, which include hybrid vehicles (HV) and EV, reached 13,600 units, comprising 8,300 HVs and 5,400 EVs.

This marks a solid start to the year and already accounts for nearly one-third of total xEV sales in 2024.

The momentum is expected to continue, with more EV models set to arrive in the second half of 2025 and into 2026, offering consumers greater accessibility and choice.

However, the research house opined that charging infrastructure remains a critical bottleneck in the country.

“Despite the government’s target of 10,000 charging points by 2025, progress has been slow,” it said.

According to PLANMalaysia’s national EV charging network (MEVnet) dashboard, there were approximately 4,161 EV charging bay nationwide, consisting of 1,304 DC fast chargers and 2,857 AC chargers.

This highlights a substantial gap that must be addressed quickly to support the growing EV fleet and ensure a seamless ownership experience.

“Overall, the second half of 2025 automotive sales may see a temporary boost, particularly in EVs, as consumers look to secure current tax exemptions before they expire at the end of December 2025,” TA noted.

This pull-forward demand could benefit brands with competitive EV offerings.

However, it noted uncertainties surrounding the potential introduction of EV road tax may lead some buyers to hold off.

It also highlighted that the removal of the MYR 100,000 ($23,881) price floor for imported EVs which is also set to end in December 2025, is expected to attract more low-cost foreign models, intensifying price competition and squeezing margins.

“While a short-term uplift is possible, the broader outlook remains cautious due to policy risks, affordability concerns, and heightened market competition,” it added.

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