KUALA LUMPUR, Dec. 31 (Xinhua) -- Malaysia's electric vehicle (EV) market is expected to gain momentum in 2025, driven by localization investments and new models from local automakers, analysts said.

The combination of policy-driven incentives and automaker strategies is expected to shape the future of the nation's EV landscape.

Maybank Investment Bank said in its recent report that Malaysia's incentives for completely built-up EVs, including duty exemptions and import restrictions for lower-priced models, will expire at the end of 2025. This would prompt mass premium EV makers to localize assembly to maintain competitive pricing.

Malaysia's EV adoption is forecast to reach 3 percent of total industry volume (TIV) in 2025, while hybrid electric vehicles (HEVs) could account for 5 percent, based on Maybank's TIV projection of 750,000 units for the year.

MIDF Research also highlighted the government's focus on promoting Malaysia as a hub for affordable EV production.

As EV still plays a minor role in TIV, CGS International suggested that removing fuel subsidies in mid-2025 and accelerating charging infrastructure could trigger an inflection point for EV adoption.

CIMB Securities, in its recent report, predicted higher adoption of battery electric vehicles (BEVs) as competition intensifies ahead of the 2026 duty exemption expiry for imported models, and domestic assembly will take precedence.

Malaysia's national automakers are stepping into the EV market amid the government's EV push.

Malaysian automaker Proton recently unveiled its first electric SUV in collaboration with its partner. Perodua, meanwhile, plans to launch a B-segment hatchback EV in late 2025, aiming for initial monthly production of 500 units, positioning the model as Malaysia's most affordable EV.

Meanwhile, according to Maybank, the growing range of EV models in Malaysia could drive investment in public charging infrastructure.

However, it noted that government incentives remain critical to accelerate this agenda, given the slow progress towards achieving the national target of 10,000 EV chargers by 2025.

At the current rate of 111 installations per month, achieving this goal would require a fivefold increase in deployment, the research house added.

Despite the increasing adoption of EVs, analysts still anticipate a decline in Malaysia's automotive TIV in 2025. While the EV segment shows growth potential, traditional automotive segments continue to face headwinds.

Maybank noted that Malaysia's mass premium automotive segment, comprising vehicles priced between 100,000 and 200,000 ringgit, is entering a downcycle after two strong years.

Similarly, CGS International also foresees Malaysia's TIV normalizing to 780,000 units in 2025, after three years of record sales.

However, it also highlighted opportunities for local automakers to expand export markets and strengthen brand equity as domestic assembly capabilities improve alongside a more skilled labor force.

Overall, the year 2025 is set to be a critical inflection point, with localization, infrastructure development, and government policies determining the pace of EV adoption.

As automakers and policymakers ramp up efforts, the coming years will reveal whether Malaysia can achieve its ambitions of becoming a regional EV hub. (1 ringgit equals 0.22 USD) Enditem

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