Transport Ministry Announces New Road Tax Structure For EVs, To Cost 85% Less

Alex Cheong Pui Yin

4th June 2024 - 2 min read

Transport Minister Anthony Loke has said that a new road tax structure will be implemented for electric vehicles (EVs) starting from 1 January 2026, which will be based on the power of the electric motor. Applicable to battery electric vehicles (BEVs) and fuel cell electric vehicles (FCEVs), EV owners can expect a reduction of 85% in the fees paid, as compared to the current rate for internal combustion engine vehicles.

According to Loke, the fee will rise in tandem with the increase in electric motor power, which typically mirrors enhancements in purchase price, size, segment, and vehicle weight. He also explained that the new structure will adopt a block-based system to determine the road tax rate.

Specifically, each block will cover a range of 100,000 watt (W) in motor power, increasing from 1W all the way up to 1,010,001W and more. Depending on the block that your vehicle falls under, you’ll be subjected to an increment of RM10 to RM350 in fees for every increase of 9,999W in motor power. Meanwhile, the minimum road tax rate starts at RM20 (from 1W to 50,000W), and is capped at a maximum of RM20,000.

“So for instance, the BYD Dolphin Premium Standard Range vehicle with a capacity of 130kW will only be charged a fee of RM120, significantly lower than the existing LKM (Lesen Kenderaan Motor) fee of RM624,” Loke elaborated, adding that the Tesla Model Y with a capacity of 220kW will incur a fee of RM305, in comparison to the current LKM fee of RM2,583.

Aside from that, the minister also noted that the rates will be reviewed every five years; this is to ensure a smooth transition to zero-emission vehicles and to mitigate any abrupt impact on the government’s revenue. He reassured as well that the government will soon gazette the rates for the EV segment, underlining its commitment to the sustainability agenda.

For context, EV owners are currently exempted from paying road tax until 31 December 2025 – a perk that was introduced under Budget 2022.

(Source: Free Malaysia Today)

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Alex Cheong Pui Yin

Previously covered recruitment-related stories and had a short stint as a copywriter for the property industry. She subsequently developed an interest in investment and robo-advisors.

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