PUTRAJAYA: Beginning Jan 1, 2026, a newly introduced road tax structure tailored for electric vehicles (EVs) will take effect.
Transport Minister Anthony Loke disclosed that the average EV road tax rate would see a significant reduction – by approximately 85 per cent – compared to the current rate for internal combustion engine (ICE) vehicles.
"The fees will correspondingly escalate with the increase in electric motor power, which typically mirrors enhancements in purchase price, size, segment, and vehicle weight," he said during a press conference held at the Transport Ministry.
To ensure a smooth transition to zero-emission vehicles and to mitigate any abrupt impacts on government revenue, Loke said that the rates would undergo a thorough review every five years.
Elaborating on the underlying principle of the EV road tax, he detailed a block-based system categorised by motor power range, with each block having designated minimum and maximum Motor Vehicle License (LKM) fee rates.
"For instance, block 1 encompasses ZEVs with motor power ranging from 1 watt to 100,000 watts, while block 2 covers ZEVs with motor power from 100,001 watts to 210,000 watts," he said.
Within each block, the LKM fee incrementally increases with every 9,999-watt rise in motor power.
Providing examples to illustrate this progression, he said: "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 fee of RM624.
Similarly, Loke said that for the Tesla Model Y with a capacity of 220kW, the fee would be RM305, compared to the current LKM fee of RM2,583.
He assured that the government would soon gazette the fee rates for the EV segment, underscoring the commitment to advancing sustainable transportation initiatives.