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Stellantis Urges Targeted EV Incentives for 2026 Budget

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Estimated Reading Time: 5 minutes


Key Takeaways

  • Stellantis advocates for targeted, phased EV incentives in Malaysia for sustainable market growth.
  • This strategic shift ensures consumer confidence and boosts industry competitiveness and resilience.
  • Despite progress, EV penetration and charging infrastructure need continued strategic support.
  • Stellantis invests in local Leapmotor EV assembly (CKD) and strengthens after-sales support.
  • Future incentives must be disciplined and performance-linked, fostering natural market evolution.

Table of Contents


Driving Towards a Sustainable EV Future: Malaysia's Next Phase of Incentives

Is Malaysia ready to pivot from broad EV incentives to a more strategic, long-term approach? The nation's electric vehicle (EV) market is rapidly evolving, sparking a crucial discussion on how to best sustain its momentum. Isaac Yeo, Managing Director of Stellantis ASEAN, advocates for EV incentives in Malaysia to be continued, but in a targeted and phased manner, rather than being open-ended. This vision aims to cement consumer confidence and ensure the local automotive industry remains competitively robust.

Stellantis urges smart EV incentive strategies for the 2026 budget. Explore their proposal for targeted and phased support to boost adoption. This strategic shift is vital, fostering local capabilities and reducing market dependency. We will explore why this approach is critical for Malaysia's electric future, examining its benefits for consumers, industry, and the overall EV ecosystem.


Targeted & Phased: The Smart Approach to EV Incentives

Stellantis champions a phased incentive model to cultivate a resilient EV ecosystem. Yeo highlights that this structured approach offers multiple benefits:

  • Consumer Protection & Market Stability: Phased incentives shield consumers from abrupt price spikes, maintaining market momentum and trust. They provide a stable planning environment for all stakeholders by establishing clear benchmarks for ecosystem growth.
  • Industrial Resilience & Competitiveness: By aligning incentives with local technology transfer and assembly (CKD), Malaysia builds indigenous industrial strength. This prevents over-reliance on imports and enhances the nation's competitive standing against regional counterparts aggressively pursuing EV manufacturing.

This disciplined evolution is key to empowering a self-sustaining market, reducing the need for perpetual dependency on subsidies.


Malaysia's EV Journey: Achievements and Challenges

Since 2022, NAP 2030 incentives have significantly boosted EV adoption, yielding positive developments:

  • Increased consumer interest and willingness to embrace EVs.
  • Expansion of charging infrastructure, mitigating range anxiety.
  • New investments from global automotive manufacturers, affirming confidence in Malaysia.

However, Yeo cautions that EV penetration remains modest, and charging coverage, while improving, still requires more comprehensive and reliable development for widespread daily use. These challenges underline the necessity of continued, strategically refined government support.


Stellantis's Commitment: Localisation and Ecosystem Building

Stellantis is actively investing in Malaysia's EV future, validating its recommendations. Isaac Yeo confirmed significant initiatives:

  • Local Assembly (CKD): Leapmotor EV models will commence local assembly at Gurun, Kedah by year-end, creating jobs and boosting manufacturing capabilities.
  • Enhanced After-Sales & Spare Parts: Reinforcing after-sales via Eurorepar and establishing Malaysia as a regional spare parts hub promise reliable support and lower maintenance costs for EV owners.
  • Skill Development: These investments foster job creation and critical skill transfers to the local workforce.

This commitment highlights Stellantis's confidence in Malaysia's potential as a regional EV hub, contingent on a supportive policy environment.


Beyond Subsidies: Embracing Market Evolution

Incentives are not permanent. Yeo emphasizes that any extension must be disciplined, transparent, and clearly linked to tangible industry achievements, such as local content integration or charging network density.

Crucially, he views the non-extension of incentives as a "natural evolution" for Malaysia's EV market, not a regression. It signals a maturing industry capable of sustained, organic growth. Each policy phase, whether implementing or withdrawing support, must consistently benefit consumers while strengthening Malaysia's industrial competitiveness regionally.


Budget 2025: Current Incentives & Future Implications

Malaysia's Budget 2025 has established a strong foundation for EV adoption:

  • CBU EV Exemptions: Full import/excise duty exemptions until December 31, 2025.
  • CKD EV Exemptions: Full import/excise/sales tax exemptions until December 31, 2027, strongly incentivizing local manufacturing.
  • Home Charger Relief: Individual tax relief up to RM2,500 for home charging installation (until assessment year 2027).
  • E-Motorcycle Rebates: Up to RM2,400 for CKD electric motorcycles.
  • Infrastructure Support: Investment tax incentives for EV charging operators and equipment manufacturers.

These existing incentives provide a critical runway. Discussions for Budget 2026 will determine how these supports transition into a more targeted framework, ensuring sustained, strategic growth.


Charting a Strategic Path for Malaysia's EV Growth

The insights from Stellantis ASEAN offer a crucial message: Malaysia's EV future hinges on a strategic pivot from broad incentives to a targeted, phased approach. This cultivation of a resilient ecosystem fosters local innovation, boosts consumer confidence, and positions Malaysia as a formidable player in the global EV market. With ongoing industry investments and visionary governmental policy, Malaysia is well-positioned for a vibrant, electric future.


Join the Conversation: Your Vision for Malaysia's EV Future

As Malaysia advances in its EV journey, the dialogue around smart, sustainable incentives is paramount. What are your thoughts on targeted EV incentives for the 2026 Budget? How do you foresee EV ownership and infrastructure developing in Malaysia by 2030? Share your insights, questions, and predictions in the comments below! Explore our other comprehensive articles on sustainable mobility and future automotive trends to broaden your perspective.


Frequently Asked Questions (FAQs)

Q1: Why does Stellantis propose "targeted and phased" EV incentives?
A1: This approach protects consumers from sudden cost increases, maintains market momentum, and establishes clear benchmarks. It fosters local technology transfer and industrial resilience, preventing over-reliance on subsidies and ensuring Malaysia's regional competitiveness.


Q2: How is Stellantis investing in Malaysia's EV ecosystem?
A2: Stellantis is localising production by commencing CKD assembly of Leapmotor EVs in Gurun, Kedah. They are also enhancing after-sales via Eurorepar, establishing Malaysia as a regional spare parts hub, and creating local jobs and skill transfer opportunities.


Q3: What current EV incentives are available in Malaysia under Budget 2025?
A3: Full import/excise duty exemptions for CBU EVs (until Dec 2025), full tax exemptions for CKD EVs (until Dec 2027), individual tax relief for home charger installation (until 2027), rebates for CKD electric motorcycles, and investment tax incentives for charging operators.


Q4: What if EV incentives are not extended after their current deadlines?
A4: Isaac Yeo views this as a "natural evolution" for Malaysia's EV market, not a setback. It signals a maturing industry capable of sustained growth driven by market demand, shifting focus to self-reliance and innovation.


Q5: How can potential EV owners prepare for future changes in incentives?
A5: Stay informed about government policies, especially for Budget 2026. Consider CKD models for potentially longer incentive periods. Focus on total cost of ownership (fuel/maintenance savings) and utilize current tax relief for home charger installation.


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