Gov't currently working on new EV road tax structure, to be revealed end-2023 – high cost concerns noted –

Currently, there’s some uncertainty about road tax for electric vehicles (EVs), which is free until 2025. After the exemptions end, and assuming there are no further exemptions, EVs will be attracting very high road tax based on the current structure – how about RM4,503 per year for a Volvo XC40 Recharge Pure Electric (an XC40 PHEV pays just RM90) or RM903 for the BYD Atto 3?

Pretty high all right. But a new EV road tax structure is currently being worked on by the transport ministry, and according to minister Anthony Loke, the new structure is set to be unveiled at the end of this year. It will also feature in the ministry’s Budget 2024 proposals.

Loke said that a new structure is essential because the previous administration’s road tax exemption for EVs is only until 2025. “Consumers are generally concerned about the EV road tax structure because if based on the old formula, the cost impact is high and can reach RM4,000 to RM5,000 a year,” he said at the Green Mobility and Transport Forum in Cheras today, reported by Bernama.

Under the current structure, the Volvo XC40 EV attracts RM4,503 road tax while it’s RM90 for the PHEV

“I have directed officers at MoT to study this matter based on feedback from consumers and companies providing EVs. This is part of our efforts to encourage users to switch to this type of vehicles,” he said, adding that policies on EV usage should be clear to facilitate efforts to migrate to more sustainable forms of transport.

Loke’s remarks are pretty strong hints that the new road tax structure for EVs will be friendlier to pockets. It’s also consistent with what he has said before on this topic.

“There will be a study on how to impose road tax against EVs. There should be a comprehensive study on the structure fees so it is aligned with our policies. In our efforts to encourage the use of EVs, there should be incentives from various aspects such as competitive road tax fees, and facilities such as charging stations,” he was quoted as saying in February.

Road tax for EVs in Malaysia – click to enlarge

While ICE vehicles have their road tax calculated based on engine capacity, EVs follow a kilowatt-based system. The final road tax amount for an EV is calculated based on the total power rating of the electric motor(s), with different power brackets determining the base rate and accompanying progressive rate (if applicable). There are categories for saloons and SUVs or jip, as JPJ classifies them. The latter is lower.

Perhaps the best EV vs ICE road tax example is the above-mentioned XC40, which is available as a full EV (Recharge Pure Electric), priced at RM278,888. Its 300 kW output attracts road tax of RM4,503 per year. The same SUV with a 1.5L plug-in hybrid powertrain is priced at RM268,888, but the road tax is just RM90. The owner of the 2.0L mild hybrid version pays RM380.

A more affordable EV is the BYD Atto 3, which will have a road tax of RM903 per year. Sounds much lower, but a similarly-sized Honda HR-V in e:HEV RS hybrid guise with a 1.5L engine pays 10 times less road tax at RM90. A change is needed for EVs to appeal to a wider audience.

Source: Read Full Article