![Smart #1 could miss EV tax exemption window, Proton hopes extension will be considered 01]()
Proton announced yesterday morning that it will be setting up a new subsidiary called Proton New Energy Technology Sdn. Bhd. to sell a new range of electric Smart models. The Smart brand is now part of a joint venture between Geely and Mercedes-Benz, operating under Smart Co. Ltd, based in Ningbo, near Geely’s headquarters in Zhejiang, China.
Although Proton has yet to confirm Smart’s model line-up for Malaysia, the company says it aims to sell 800 to 1,000 Smart-branded electric vehicles per year, but due to shortage of cars (the Smart #1 is sold out in China until 2023), Proton is only able to commence local sales of Smart models in Q4 2023.
Also read: Geely's Smart #1: Q4 2023 launch, 800 to 1,000 units per year, to be Malaysia's best-selling EV?
![Smart #1 could miss EV tax exemption window, Proton hopes extension will be considered 01]()
This also means that Proton won’t benefit much from the current tax exemptions (import, excise, and road tax) for battery EVs, which will end by 31-December 2023 for fully imported (CBU) models.
Deputy CEO En. Roslan Abdullah explained that Proton is in touch with the government to please consider an extension, so more Malaysians can experience Proton’s answer for electric mobility.
“We have put in an official request for the government to consider an extension, to give us a chance, especially for Malaysians to enjoy the Smart #1 at a reasonable and affordable price,” said Roslan.
![Smart #1 could miss EV tax exemption window, Proton hopes extension will be considered 02]()
In China, the Smart #1 is priced from RMB 190,000 (~RM 125k) to RMB 230,000 (~RM 153k).
Only one battery size is available – 66 kWh, driving range is between 535 to 560 km, depending on variant (based on Chinese WLTP test cycle). The rear-wheel drive Smart #1 makes 272 PS and 343 Nm, regardless of variant.
Currently, battery EVs sold in Malaysia only need to pay the 10 percent sales tax. Import and excise tax, as well as road tax, are waived until 31-December 2023.
Beyond that, only locally assembled EVs (specifically battery EVs, because PHEVs or plug-in hybrid EVs are not entitled) are entitled to the tax exemptions, until 31-December 2025.
| Tax incentive for BEVs, Malaysia |
| |
CKD |
CBU |
| Import tax |
0%
1-Jan 2022 - 31-Dec 2025 |
0%
1-Jan 2022 - 31-Dec 2023 |
| Excise tax |
0%
1-Jan 2022 - 31-Dec 2025 |
0%
1-Jan 2022 - 31-Dec 2023 |
| Road tax |
RM 0
15-Feb 2022 - 31-Dec 2025 |
| Personal income tax |
Up to RM 2.5k rebate for expenses on BEV charging hardware / services |
However, it is not realistic to expect many manufacturers to locally assemble EV models here given the low demand and market size.
Currently, there is only one locally-assembled EV model sold here, the Volvo XC40 Recharge.
![Smart #1 could miss EV tax exemption window, Proton hopes extension will be considered 03]()
However, a factory the size of Proton’s is designed to do full scale manufacturing, including body stamping, welding, and painting. Proton cannot do for Smart the same low volume, very basic assembly work that Volvo does for the XC40, especially not in such short notice.
So yes, in a rather convoluted manner, the companies that invests more in Malaysia, doing larger scale manufacturing, have greater difficulty in taking advantage of the short-term incentive, but that’s another topic for another day.
