Xpeng and Zeekr's Risk in Malaysia (Post-2025 EV Tax Exemption) Full EV car from china brand.. How to survive after ending EV free Tax.

Xpeng and Zeekr's Risk in Malaysia (Post-2025 EV Tax Exemption)

The concern that the businesses of pure-CBU (Completely Built-Up, or imported) EV sellers like Xpeng and Zeekr in Malaysia could collapse, potentially leading to a market exit, is a valid concern based on recent developments.

EV CAR TAX Free is End

1. Government's Official Stance: End of CBU Tax Exemption Confirmed

The most critical news is that the Malaysian Ministry of Finance (MOF) has officially confirmed that the tax exemptions for imported CBU electric vehicles will not be extended beyond the current deadline.

• Policy Detail: Full exemptions from import and excise duties, currently enjoyed by CBU EVs, are scheduled to end on January 1, 2026.

• Implication: This definitive announcement means that from 2026 onwards, CBU imported vehicles, like the Xpeng X9, will be subject to full duties and taxes. This is expected to cause a "price shock," potentially raising the final cost of these vehicles by $20\%$ to $40\%$ or more.

• Government Focus: The government's decision signals a strong pivot towards prioritizing local assembly (CKD) investments, as the CKD incentives are extended until the end of 2027.

2. Xpeng's Response: Considering Local Production

In response to the imminent "tax wall," the brands reliant solely on CBU imports are scrambling to develop a localization strategy.

• Xpeng CKD Exploration: Recent local news reports indicate that Xpeng is actively "mulling CKD production" in Malaysia, with a potential start date aimed for the second half of 2026. This would be a move to leverage the extended CKD incentives and regain price competitiveness.

• Zeekr's Status: As of now, there is no widely reported confirmation of concrete CKD plans from Zeekr, leaving their long-term price strategy highly uncertain.

3. Conclusion: A Critical Juncture for CBU-only Brands

The removal of the tax holiday places pure-CBU importers like Xpeng and Zeekr at a critical crossroads:

Scenario	Impact on Xpeng / Zeekr
Fail to Localize (CKD)	High Risk: Vehicle prices become uncompetitive, leading to a sharp decline in sales and making an eventual market exit a distinct possibility.
Successfully Localize (CKD)	Sustainable: They can secure the extended CKD incentives (until 2027) to maintain competitive pricing and establish a long-term presence in the Southeast Asian market.

In short, the prevailing view in the local industry is that any brand without a solid plan to switch to CKD production by 2026/2027 faces severe difficulties in the Malaysian market.