The electric vehicle (EV) market recorded its strongest monthly performance in August 2026, with 8,833 battery electric vehicles (BEVs) registered, driven overwhelmingly by the Proton e.MAS 5, according to Kenanga Investment Bank.
The research house said the Proton e.MAS 5 accounted for 4,770 registrations, representing 54% of total EV sales during the month, marking the first time a single model captured more than half of monthly registrations since Malaysia’s EV market surpassed 1,000 units per month.
However, Kenanga noted that the record performance masked weaker sales across the broader EV market. Excluding the Proton e.MAS 5, registrations for other EV models declined 10% to 4,063 units from 4,535 units in July.
The research house attributed the weaker performance among competing brands partly to dwindling completely built-up (CBU) inventories, particularly BYD, whose sales declined 46% month-on-month and 35% year-on-year.
National Carmakers Strengthen Market Dominance
Malaysia’s total industry volume (TIV) declined 3% month-on-month and 4% year-on-year in August, partly due to fewer working days during the month.
Passenger vehicle sales stood at 67,058 units, down 3% from July and 2% from a year earlier.
Despite the overall decline, national carmakers continued to strengthen their market position, accounting for 66% of TIV in the first eight months of 2026, compared with 54% during the corresponding period last year.
Perodua commanded a 41% market share, up from 38%, while Proton expanded its share to 25% from 16%, supported by sustained demand for affordable vehicles and new model launches.
Proton’s August sales increased 18% month-on-month and 38% year-on-year, driven by the e.MAS 5, e.MAS 7 and Saga, alongside demand for its X70, X50, X90 and S70 models.
Kenanga estimated that Proton had approximately 50,000 outstanding orders as of August, translating into a waiting period of three to six months.
Perodua, meanwhile, recorded an 8% decline in sales both month-on-month and year-on-year, although demand remained supported by the Traz, Axia, Bezza, Myvi and Ativa.
The national carmaker had an estimated order backlog of 40,000 units, with delivery waiting periods ranging from two to five months.
Kenanga expects Perodua’s recent price reductions of up to RM4,700 for the second-generation Axia, alongside continued promotional activities, to support sales momentum in September.
Toyota Leads Non-National Segment
Among non-national marques, Toyota maintained its leading position in August with a 32% share of the segment, followed by Honda at 22%.
Mazda ranked third with 5%, overtaking Chery and BYD, which each commanded approximately 4%.
Kenanga said Toyota’s performance was supported by demand for its Hilux, Corolla Cross hybrid, Vios and Yaris, alongside the introduction of the Yaris Cross in hybrid and petrol variants.
The research house also attributed stronger Hilux demand to the introduction of BUDI Diesel in July, which replaced the previous cash rebate arrangement with direct fuel subsidies at the pump through MyKad verification.
Toyota had an estimated order backlog of 10,000 units, while Mazda and Honda recorded approximately 3,500 and 3,000 outstanding orders, respectively.
Kenanga expects the transition towards locally assembled vehicles to become increasingly important for Chinese automotive brands following the expiry of tax incentives for imported EVs.
It identified potential localisation opportunities involving BYD, Chery, Jaecoo, Xpeng, GWM and other manufacturers as the industry adjusts to the revised incentive framework.
EV Sales More Than Double In First Eight Months
Kenanga said cumulative EV registrations reached 47,508 units in the first eight months of 2026, representing growth of 103% year-on-year.
The figure has already exceeded the 44,813 EV registrations recorded throughout 2025, when EVs accounted for approximately 5.5% of Malaysia’s total vehicle sales.
Nevertheless, the research house expects Malaysia’s transition to BEVs to remain gradual, citing charging infrastructure limitations and subsidised fuel prices that reduce the financial incentive for middle- and lower-income households to switch from internal combustion engine vehicles.
Malaysia has revised its public EV charging infrastructure target to 30,000 charging points by 2030, compared with the earlier target of 10,000 by 2025.
As of July 2026, the country had 6,904 public charging bays, comprising 4,665 alternating current (AC) chargers and 2,239 direct current (DC) chargers.
Kenanga expects Proton to sustain a 40% to 50% share of domestic EV sales, supported by the local assembly of its e.MAS 5 and e.MAS 7 models at Tanjung Malim.
Automotive Sales Outlook Remains Stable
Looking ahead, Kenanga expects September vehicle sales to remain around August’s level, supported by ongoing promotional campaigns, new model launches and sustained demand for commercial vehicles.
Year-to-date TIV stood at approximately 530,000 units as of August, up 2% year-on-year and within the research house’s expectations.
The industry’s total outstanding order backlog was estimated at 113,000 units at end-August, compared with an average of 140,000 units in 2025.
More than half of the outstanding orders were for newly launched models, indicating continued consumer interest in newer vehicles despite intense price competition.
Kenanga said automakers are increasingly relying on discounts and rebates to capture market share, potentially at the expense of profitability.
The research house identified Bermaz Auto and Sime Darby as its preferred automotive sector exposures, maintaining OUTPERFORM ratings and target prices of RM1.30 and RM3.00, respectively.
For Bermaz Auto, Kenanga highlighted its 3,500-unit order backlog, higher-margin Mazda portfolio and estimated dividend yield of 11%.
Meanwhile, Sime Darby’s diversified automotive and industrial operations, particularly its exposure to Australia’s mining industry and data centre-related power supply demand, are expected to support its earnings outlook.
Kenanga also highlighted the potential impact of the revised open-market-value excise duty regulations, scheduled for phased implementation from January 2027, as well as the continued localisation of Chinese vehicle manufacturing in Malaysia.
