Malaysia is buying more EVs than ever — but what happens to the batteries later?

KUALA LUMPUR, May 21 — Rising global fuel prices and ongoing supply uncertainties are prompting more Malaysians to consider switching to electric vehicles (EVs), accelerating the country’s transition towards greener mobility.

The growing interest is reflected in the increasing number of EVs on Malaysian roads, driven by a wider range of models and stronger consumer confidence. The momentum has also been boosted by the entry of the country’s two major local carmakers, Proton and Perodua, into the EV market with more affordable offerings.

According to the Road Transport Department (JPJ), 5,894 EVs were registered in April 2026, a sharp 103.8 per cent increase from 2,892 units recorded during the same month last year.

The rise mirrors the broader recovery of Malaysia’s automotive industry, with Total Industry Volume (TIV) for April 2026 climbing 19.4 per cent year-on-year to 77,819 units from 65,200 previously.

EVs accounted for approximately 7.6 per cent of total vehicle registrations in April, equivalent to about one in every 13 new vehicles registered in the country. Proton led the market with 2,408 registrations, followed by BYD (1,413), Chery (562), Zeekr (357) and Tesla (172).

While the rapid adoption of EVs is widely viewed as a positive step towards reducing carbon emissions and dependence on fossil fuels, concerns are growing over another challenge looming on the horizon — how Malaysia will manage and dispose of EV batteries once they reach the end of their lifespan.

A growing waste challenge

Malaysia could face a significant surge in depleted lithium-ion batteries in the coming decades.

According to the Malaysia Automotive, Robotics and IoT Institute (MARii), nearly 900,000 EV batteries are expected to require disposal or recycling by 2050. Based on an estimated eight-year battery lifecycle and EV registration trends since 2020, around 40,000 batteries are projected to require recycling by 2030, rising to 330,000 by 2040 and 870,000 by 2050.

Improper disposal of these batteries could pose serious environmental and public health risks due to the hazardous materials they contain.

Malaysia Automotive Recyclers Association (MAARA) vice-president Cho Chee Seng said EV battery recycling remains relatively new in Malaysia as large-scale EV adoption only began accelerating in 2022 following government tax and duty exemptions.

“At the moment, not many EV batteries have reached the end of their lifespan for recycling,” he said.

Nevertheless, Cho noted that Malaysia already has a comprehensive regulatory framework to manage the safe disposal and recycling of hybrid and EV batteries through guidelines and policies established by the Department of Environment (DOE).

The framework includes the implementation of Authorised Automotive Treatment Facilities (AATF), licensed recycling centres and the Scheduled Waste SW103 protocol, which regulates the handling, storage, transportation and disposal of hazardous battery materials.

“Companies appointed under the AATF policy must comply with strict regulations on how vehicles are processed, how waste is disposed of and how waste generation can be minimised.

“We (MAARA) have also been working closely with the government in developing Malaysia’s vehicle recycling ecosystem, including providing industry feedback during the formulation of the AATF policy and training our members to handle EV battery waste more effectively as the industry moves towards downstream recycling and repurposing activities,” he told Bernama during the recent Automechanika Kuala Lumpur (AMKL) 2026.

Government pushes circular economy policies

To avoid future waste crises, Malaysia has begun laying the groundwork for a more sustainable EV ecosystem through policies focused on recycling, remanufacturing and circular economy practices.

The Ministry of Investment, Trade and Industry (MITI) has addressed the issue through the National Automotive Policy 2020 (NAP 2020) and the National Remanufacturing Policy (NRP).

Under NAP 2020, the government aims to achieve a 70 per cent recycling rate for End-of-Life Vehicles (ELVs) through research and development initiatives and compliance with MS ISO:22628 standards. The policy also targets the establishment of 21 licensed AATFs by 2030, compared to only five currently operating.

Originally introduced in 2006 under the Third Industrial Master Plan (IMP3) 2006-2020, the NAP serves as a long-term framework to strengthen the competitiveness and sustainability of Malaysia’s automotive sector.

The NRP complements these efforts by promoting a circular economy across five strategic sectors — automotive, marine, machining, electrical and electronics, and aerospace — through the remanufacturing of used components into high-value, like-new products.

The policy aims to position Malaysia as a regional circular economy hub by 2030.

Meanwhile, MARii has introduced ASEAN’s first EV Battery Passport standard, designed to improve battery traceability throughout its lifecycle while ensuring compliance with global Environmental, Social and Governance (ESG) standards.  

The Battery Passport system functions like a digital identity card for EV batteries, recording information such as battery origin, composition, usage history, carbon footprint and recycling data. The initiative is expected to improve transparency, facilitate recycling and support safer second-life applications for used batteries.

To further encourage green investment, the government is also offering tax incentives, including green investment tax allowances and income tax exemptions for green technology services managed by the Malaysian Green Technology and Climate Change Corporation (MGTC).

Industry responds with recycling investments

Industry players are also ramping up efforts to prepare for the expected wave of battery waste.

Econili Battery New Energy Sdn Bhd has established a 24,000-ton-capacity per annum EV battery recycling plant in Perak and plan to setup next plant RM500 million for its Phase Two expansion project in Gopeng 2 years ahead from now.

Its chief executive officer Dr Jayden Goh said the expansion, expected to be completed within two years, would add another 100,000 tonnes of annual recycling capacity.

“This high-tech factory operates using a closed-system process that complies with strict DOE standards, ensuring minimal environmental impact throughout the recycling process,” he said.

According to him, the facility houses Malaysia’s first hydrometallurgical plant for integrated critical metal recovery, producing ‘black mass’ containing lithium, cobalt and nickel — valuable materials used in manufacturing new batteries.

Black mass refers to the powder-like material extracted from recycled lithium-ion batteries after they are dismantled and processed. It contains valuable metals that can be recovered and reused in battery production.

He added that Econili operates a DOE-licensed lithium battery recycling facility supported by proprietary processing technology.

Giving batteries a second life

Beyond recycling, retired EV batteries are increasingly being viewed as valuable assets that can be repurposed for energy storage.

Cho said batteries removed from EVs often still retain 40 to 50 per cent of their usable capacity even after they are no longer suitable for vehicles.

“Batteries collected from several vehicles can be repurposed into Battery Energy Storage Systems (BESS), which can store electricity for residential or commercial use, including solar energy projects,” he explained.

“For example, batteries from several EVs can be combined into a battery pack roughly the size of a table, which can then be used to power a house or even serve as a generator for a pasar malam.

“During the daytime, electricity can be generated through solar energy, while at night the stored energy in the BESS can be used without relying entirely on the grid supply,” he said.

Universities and automakers collaborate

BMW Group Malaysia and Universiti Malaya are among those exploring how retired EV batteries can be repurposed into energy storage systems for rural electrification projects.

Under the collaboration, BMW supplies retired EV batteries to Universiti Malaya’s UM Power Energy Dedicated Advanced Centre (UMPEDAC), where researchers study second-life applications including stationary energy storage systems and sustainable on-campus energy solutions.

The initiative could also benefit rural communities supported by the university’s community engagement and sustainable development centres.

BMW Group Malaysia director of corporate communications and sustainability Sashi Ambi said the company had delivered more than 38,700 electrified vehicles in Malaysia as of March 2026, while over 13,600 batteries had been recollected under its standard practices.

“As these vehicles age, we recollect their batteries responsibly as standard practice. Under our RE:GENERATE initiative, we take this further by exploring how these batteries can be given a meaningful second life,” he said.

The initiative forms part of BMW Group Malaysia’s broader circular economy commitment guided by the principles of RE:THINK, RE:DUCE, RE:USE and RE:CYCLE.

“If the technology can be safely scaled, it could help reduce battery waste, support cleaner rural electrification and offer a more practical electricity solution for communities that still depend heavily on diesel-generated power,” he added during a recent media briefing at Universiti Malaya.

UMPEDAC senior lecturer Assoc Prof Dr Tan Chia Kwang said newer-generation BMW batteries retain higher energy density and can provide up to three days of electricity for a household equipped with a refrigerator.

“Older generation batteries average around 0.5kWh, and through careful grading, sorting and modification, we try to maximise the performance of each pack regardless of generation,” he said.

According to Tan, the solar-battery system is designed to suit rural living patterns, where solar panels charge the batteries during the day before stored energy is discharged at night when electricity demand peaks.

Under optimal conditions, he said, second-life EV batteries could continue functioning for up to 20 years as stationary storage systems.

“If a retired EV battery can continue serving as stationary storage for many more years before final recycling, its total useful lifespan becomes much longer than its first life in a vehicle,” he said.

Battery supply may take longer than expected

Despite growing interest in recycling, Malaysia Electric Vehicle Owners Club (MyEVOC) president Datuk Shahrol Azral Ibrahim Halmi believes Malaysia may not generate enough retired EV batteries in the near future to sustain a large-scale local recycling industry.

He said EV batteries are lasting longer than initially expected, with many still suitable for second-life energy storage applications.

“As a result, the most cost-effective way to process EV batteries that can no longer function is by converting them into black mass before exporting the material to larger recycling facilities overseas that can recover valuable metals,” he said.

However, he noted that repurposing batteries remains costly due to the complex process of dismantling, inspecting and reassembling used battery packs.

“In some cases, the process can be more expensive than sourcing brand-new batteries from China because of China’s massive production scale and competitive pricing,” he said.

At the same time, demand for used EV batteries is increasing among third-party workshops seeking affordable replacement options for damaged or ageing EVs.

He said initiatives such as MARii’s Battery Passport system could improve battery traceability, increase availability of reusable batteries and potentially lower repair costs for EV owners. — Bernama