T15 fuel subsidy criteria may push consumers to downgrade vehicles or switch to EVs – MIDF Research

The proposed T15 income bracket criteria for the RON95 fuel subsidy that is to be finalised by the middle of this year may drive consumers to downgrade their vehicles or change to electric vehicles, according to MIDF Research, reported Bernama.

The upcoming change in policy may influence buyers to lower-cost internal-combustion engined vehicles or switch to EVs, the latter particularly before the tax exemptions for fully imported (CBU) EVs expire at the end of this year.

“Meanwhile, the auto sector’s revised excise duty has been extended, which will expand duties on completely knocked down (CKD) components. The tax, set to be effective January 2026, is expected to drive CKD car prices up by 10% to 30%,” said MIDF Research.

Last week, economists voiced support for a two-tier pricing structure for RON 95 petrol instead of cash aid, and said that charging for the fuel by vehicle type would not stop the wealthy from purchasing subsidised RON 95 petrol while driving more affordable cars.

When announced at the tabling of Budget 2025, prime minister and finance minister Datuk Seri Anwar Ibrahim said that the upcoming cut in RON 95 petrol subsidy would see the nation’s top 15% of earners pay more for the fuel.

With no elaboration on who exactly constitutes the T15, many searched and found statistics that pointed to RM12,000 or RM13,000 income as the point where a Malaysian household is classified as T15. For a working couple, that is RM6,000 salary each. Anwar has since walked back on his T15 definition.

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