Impact POSITIVE

Measures

• Full exemption of import and excise duty for electric vehicles (EV) for CBU (completely-built-up) extended until 31st December 2024 (CKD exemption is still the same until 31st December 2025).

• Approved Permit (AP) fee exemption for EV importation until 31st December 2023.

• 100% income tax exemption (FY2023 until FY2032) and 100% investment tax allowance for manufacturer of EV charging equipment.

• 500 unit of EV charging infrastructure for the whole Malaysia by GENTARI, subsidiary of Petronas.

• EV charging infrastructure partnership by Tenaga Nasional Berhad (TNB) included under RM165m investment until 2025.

• 50% excise duties exemption on CKD (completely-knocked-down) vehicles purchases for tourism (rental cars and tourist bus)

• Full exemption of excise duties and sales tax for individual taxi owners for sales, ownership transfer and disposal of taxi expanded to executive taxi and airport taxi owners.

• Full subsidies of licensing for taxi, bus and e-hailing under MyPSV program to encourage youth involvement in the sector.

Comments

• We are positive on the wide incentives for the EV industry. EVs are slowly but surely gaining attention and interest is heightening as evidenced by the expanding range of vehicles being offered by automakers.

• Battery electric vehicles (BEVs) new launches are expected to be boosted by the sales tax, import and excise duties exemption (CKD up to 2025, while CBU up to 2024) and other EV facilities incentives.

• Absence of sales tax exemption registration deadline extension (currently until March 2023) for other passenger vehicles is as expected since the exemption has been running for 2 years.

• Various exemptions for individual taxi owners and licensing subsidies program could spark more volume for the affordable national segment.

Beneficiaries

• Potential beneficiaries for the electric vehicles (EV) exemption and subsidies would be SIME (OP; TP: RM2.60) and BAUTO (OP; TP: RM2.30) given their wide offerings of EV models.

• Potential beneficiaries for the taxi and e-hailing market are Perodua of MBMR (OP; TP: RM4.30) and Proton of DRBHCOM (MP; TP: RM1.55) given their presence in the affordable market segment.

Source: Kenanga Research - 8 Oct 2022