The automotive industry is evolving rapidly, with many countries stepping up their efforts to support and integrate electrified vehicles (xEVs). These include not just electric vehicles (EVs) but also plug-in hybrids (PHEVs) and conventional hybrids. While nations like Thailand are making bold moves to push their EV agenda forward, Malaysia still seems to be stuck in a debate about the best approach to take.
As it stands, Malaysia’s Completely Built-Up (CBU) EV tariff exemption is set to end this year, while the exemption for Completely Knocked Down (CKD) EVs will last until 2027. However, there’s been little indication of a solid plan to expand incentives beyond fully electric vehicles. Meanwhile, Thailand is already gearing up for the next stage of its electrification strategy.
The Thai Finance Ministry is set to propose fresh support measures for PHEVs by April, with implementation expected by January 2026. This new tax structure will move away from the usual carbon emissions-based system and instead focus on how far a PHEV can travel on electric power alone. Essentially, the longer the range, the lower the tax – a move designed to encourage the production and purchase of more efficient hybrid models.
A significant shift in Thailand’s approach is the removal of the existing 45-litre fuel tank capacity restriction for PHEVs. This change will provide manufacturers with greater flexibility in designing their hybrid models, potentially making them more practical for long-distance travel.
Currently, Thai PHEVs with an electric range of over 80 km are taxed at 5%, while those with a lower range are subject to a 10% tax. The details of the new rates are yet to be finalised, but the clear message is that Thailand is serious about using PHEVs as a stepping stone before transitioning fully to EVs.
Beyond vehicle taxation, Thailand is also looking at a tiered tax system for batteries. Instead of a flat 8% tax, battery taxes will be adjusted based on factors such as energy efficiency and lifespan. Batteries that last longer and have a higher energy capacity relative to their weight will attract lower taxes, while disposable batteries will face steeper levies.
In another bold move, Thailand is set to require EV importers benefiting from government incentives to start manufacturing domestically from 2025. This policy aims to strike a balance between imports and local production, with an expected 100,000 EVs rolling off Thai assembly lines next year.
All in all, Thailand’s proactive stance makes Malaysia’s hesitation on xEV policy look all the more stark. While Malaysia continues to debate the way forward, Thailand is already implementing strategic measures to drive its EV transition. What’s even more striking is that Thailand isn’t offering indefinite incentives for PHEVs – the country clearly sees them as a temporary bridge to an all-electric future.
Perhaps it’s time for Malaysia to take a leaf out of Thailand’s book. A well-structured PHEV incentive programme, much like Thailand’s, could help Malaysia accelerate its shift towards electrification. The longer we wait, the more we risk falling behind in the race towards a cleaner, more sustainable automotive future.
(Source: Caricarz/Bangkok Post)
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