Malaysia's EV price war 'natural consequence' of maturing market

The electric vehicle (EV) price war in Malaysia is a natural consequence of a maturing market, according to the Malaysia Automotive Robotics & IoT Institute (MARii) chief executive officer Azrul Reza Aziz.

The price competition signals the growing presence of players in the local market, a natural outcome of market-driven dynamics where increased competition leads to greater affordability and encourages wider adoption, Azrul Reza added.

"While price competition enhances affordability and accelerates EV adoption, long-term sustainability will depend on how effectively automakers localise production, optimise supply chains, and integrate advanced technologies," he told Business Times.

Maintaining Consumer Trust and Financial Viability

The price battle was sparked by a significant price cut of the 2025 Atto 3 model by Chinese automaker BYD two weeks ago, without compromising on its features. The Chery Omoda E5 electric SUV also saw a price drop last week

The Atto 3 Ultra now sells for RM123,800, a RM44,000 drop from its 2023 launch price, likely in response to Proton's recent launch of the eMas 7.

Proton's special launch package was extended recently, reducing the eMas 7's price to RM105,800 for the Prime variant and RM119,800 for the Premium variant.

Meanwhile, Chery Malaysia cut the Omoda E5's price to RM119,800, offering consumers a savings of RM27,000. This new price comes just ahead of the Raya holidays and marks the first anniversary of the EV's release in Malaysia.

Azrul Reza said the price reductions appear to be a one-off strategy to clear existing models, likely in anticipation of new models entering the market.

Given that Malaysian consumers are generally well-educated in brand selection, he said the purchasing decisions are influenced by more than just pricing, including factors such as technology, reliability, after-sales service and long-term ownership value.

"To maintain trust, automakers should adopt transparent pricing strategies, ensuring that price fluctuations are well-communicated, while also offering value-added incentives such as extended warranties, free charging packages or software updates that enhance the overall ownership experience," he added.

From a financial perspective, Azrul Reza said localisation will be critical post-2027 for manufacturers to fully benefit from government incentives under National Automotive Policy 2020.

He pointed out that the automakers must accelerate efforts to localise EV component manufacturing, battery technology and power electronics to strengthen cost competitiveness and supply chain resilience.

He added that exploring export opportunities in Asean markets could help mitigate domestic pricing pressures.

Strengthening EV Charging Infrastructure

As the number of EVs in Malaysia rises, Azrul Reza said the development of a robust and comprehensive charging infrastructure becomes increasingly important.

As of January this year, Malaysia had made significant progress, with over 1,095 DC fast chargers installed, achieving 72 per cent of the national target. More than 2,500 AC chargers have been deployed, accounts for 30 per cent of the national goal.

Kenanga Research said the number of proposed charging stations is currently at 4,299 with a total of 3,611 built to date. This should more than double to 10,000 by end-2025.

Meanwhile, the firm said the new registration for battery EVs (BEVs) leapt from 274 units in 2021 to over 3,400 units in 2022, before rising to 13,301 units in 2023 and 21,789 units in 2024, based on the Ministry of Transport data, or three per cent of the total industry volume (TIV).

Kenanga Reserach expects more favourable incentives from the government which has set a national target for EVs and hybrid vehicles of 20 per cent of TIV by 2030 and 38 per cent by 2040.

"The government will speed up the approval for charging stations," it said.

Azrul Reza said the state governments are also stepping up to support the growing demand for EV infrastructure.

For example, Johor has set an ambitious target of 1,245 charging stations by 2030, positioning the state as an EV hub in Malaysia.

He added that the government is working closely with private sector players, highway concessionaires and commercial property owners to expand EV charging access along highways, urban centres and residential areas.

"These strategic efforts, combined with ongoing incentives such as green investment tax allowances, streamlined approval processes and public-private partnerships, demonstrate Malaysia's proactive approach in developing a robust and accessible EV charging infrastructure, ensuring seamless EV adoption across the country," Azrul Reza said.

Read More: Here