Malaysia doesn't allow import of battery EVs priced below RM 100k, how true is this?

Currently, the cheapest battery EV (BEV) on sale in Malaysia is the Neta V, priced at RM 99,800. The next closest BEV is Great Wall Motors' Ora Good Cat, priced at RM 139,800.

Beyond our borders, the cheapest BEV on sale in Southeast Asia is the Indonesia-made Wuling Air, prices start from THB 395k (~RM 52k) and IDR 243,000,000 (~RM 76k) in Thailand and Indonesia respectively, for the standard 17.3 kWh / 200 km variant.

At the same time, a screenshot of a MITI (Ministry of Investment, Trade and Industry) document detailing the conditions for Franchise Approve Permits (Franchise APs), alleging that imports of BEVs priced below RM 100,000 are not allowed, has been circulating on social media.

If you do a bit of digging, you will see that the same document also states imports of combustion engine cars priced below RM 250,000 are also not allowed.

Obviously, this is not practiced because the Thailand-made Mazda 2 is the cheapest imported car on sale in Malaysia, with a starting price of RM 103,670.

So how true is the RM 100,000 minimum selling price for imported battery EVs?

We’ve reached out to MITI for a clarification and the short and simple answer is that yes, the content of the screenshot is true. Malaysia does not allow import of battery EVs priced below RM 100,000.

MITI explained that the RM 100,000 floor price is inclusive of insurance, which explains why the China-made Neta V can be imported and sold for RM 99,800.

As you would’ve already know, Bank Negara deregulated motor insurance pricing in 2017 and since then, it is no longer possible to quote the same motor insurance cost for every individual buyer, so car dealers no longer quote on-the-road prices with insurance.

On a related note, Intro Synergy Sdn. Bhd., the distributor of Neta vehicles in Malaysia has confirmed that it has collected over 130 orders for the Neta V since bookings were opened in May. Intro Synergy has previously said that deliveries will begin in Q3 this year, meaning by September.

Separately, MITI says it is evaluating an application from a Malaysian entity to be appointed as the Franchise AP holder for Neta vehicles.

As for the RM 250,000 floor price for imported combustion engine cars, MITI says the condition was implemented since 1st January 2012 as part of the Government's efforts to promote the development of the local automotive industry. Prior to the implementation of this condition, approval for new Franchise APs has been suspended since 2006.

However, any form of takeover of the existing Franchise AP holder's rights is allowed and shall not be subject to the minimum price requirement. This explains why the RM 250,000 minimum price condition has had little / no impact to the market.

Going back to the RM 100,000 minimum price condition for battery EVs, it may seem counterintuitive to achieving the goal of promoting EVs but if think about it from the perspective of a government fishing for investments, it makes perfect sense.

The exclusion of budget-friendly sub-RM 100k EVs from the current import and excise tax waiver for imported EVs is ammo to critics who say that the tax exemption for EVs is just elites hijacking the green agenda to provide gifts to their rich friends to buy more toys, while neglecting much-needed public transport upgrades that the masses urgently need to free themselves from buying cars they don't like / want.

The criticism is not wrong because public transport, regardless of the bus or train’s electricity generation source or powertrain type, is the greenest form of transport, greener than any electric car. You cannot talk about low carbon mobility if the focus is limited only to private passenger cars.

With less single occupant private cars on the road, there is less need for more roads and car parks, thus reducing urban heat islands and allow for more green spaces.

But public transport is beyond the scope of MITI’s role and their rationale to prioritize higher range battery EV models is actually the right thing to do, if you view it from their objective of attracting EV investments.

Like all technology, investment value is heavily concentrated on the upper end of the product range. The technology content of a budget electric minicar like a Wuling Air, which is nothing more than a scaled-up golf cart, is quite low. By that same reason, the multiplier effect of extending incentives (which you have to remember, involves Malaysia forgoing tax revenue) to such low-end EVs is quite low.

Even in Thailand, their incentives prioritize higher-end EVs, which the Thai government define as models with battery capacity of 30 kWh or more.

Battery EVs above 30 kWh enjoy a higher THB 150,000 (~RM 19.6k) subsidy, while EVs below 30 kWh get only THB 70,000 (~RM 9.2k). This is on top of the 0 percent import tax and 2 percent excise tax for all battery EV models.

The rationale is the same: Thailand wants to incentivize high value investments, that’s their bigger objective. Moving the masses to more affordable, greener transportation is secondary, even though the green agenda is often used as the pitch.

If you look at this from the viewpoint of social equality, then it doesn’t make sense but the world does not operate on altruism doesn't it?