Malaysia’s electric vehicle (EV) policy, set by the ministry of international trade and industry (MITI), is designed not just to protect national carmakers Proton and Perodua, but to develop the local automotive industry. The aim is to encourage EV makers to set up operations in Malaysia and work more with local suppliers, deputy MITI minister Sim Tze Tzin said.
“We want foreign manufacturers to collaborate with our local vendors in the ecosystem so that they can enhance their capabilities, move up the value chain and position Malaysia to become an exporter of automotive components and parts while also preparing for the future of autonomous driving,” he told reporters on the sidelines of the 2nd Asean Automotive and Mobility Conference this week, reported by The Edge.
In his opening speech at the event, Sim said that the government’s focus is on building a ‘complete ecosystem’ encompassing manufacturing, supply chains, infrastructure, talent and innovation. He pointed out that Malaysia’s automotive sector contributed an estimated RM80 billion to RM95 billion to the country’s GDP in 2025 and employed more than 750,000 people.
The Bayan Baru MP added that Perodua works with about 190 vendors while Proton has a network of 116 vendors, and together, the OEMs spend almost RM15 billion on local parts. Malaysia currently has over 640 automotive parts manufacturers, including between 150 and 180 Tier 1 suppliers serving both local and foreign carmakers.
This is now a hot topic because of MITI’s new regulation for CBU fully imported EVs, which raises the entry barrier in two areas – declared CIF value (cost, insurance and freight) of no less than RM200,000 and minimum power output of 180 kW (245 PS), effective July 1. CIF is before tax and margins, and we expect RRPs for CBU EVs to be at least RM300,000 in the best case scenario.
And that is if the imported EV clears 180 kW output hurdle in the first place. Combined, these two requirements will ‘push out’ a swathe of mid-range CBU EVs, leaving only CKD models and premium CBU options. Ready stock and cars that are in transit are exempted from this new rule. You can read more about it here.
Sim rejects concerns that the new effective minimum price for imported EVs will limit access to cheaper models. “If they want to price EVs between RM100,000 and RM200,000, they can work together with contract manufacturers to manufacture here,” he said. Coupled with MITI’s regulations for new factories, does the government then prefer OEMs to partner with local contract assembly operators over establishing their own plants?
Clearly, that the brand that will be the most impacted by this move is BYD, which entire range is imported from China. The carmakers knew full well that their easy CBU EV business model would one day be no longer viable – as such, some have started CKD, many have at least expressed their intention to locally assemble, and a few are starting soon.
BYD too has CKD plans, but it hit a snag recently when MITI announced new regulations for car factories. In a March 31 statement, MITI minister Datuk Seri Johari Abdul Ghani said that BYD (and all new EV plants after September 2025) will have to abide by a floor price of RM100k, an output split of 80% export/20% domestic sales, and the mandatory inclusion of a paint shop, which is a costly element in a car factory and a sign of ‘serious work’ being done there, so to speak.
Failure to meet any of the newly imposed regulations would mean that BYD would not be issued a manufacturing license to run a CKD operation. It’s clear that the most challenging item on the list is the 80% export requirement, which is unrealistic for BYD as it already has CKD plants in both Thailand and Indonesia, never mind the huge capacity the company has back home in China.
MITI’s statement on March 31 said that these conditions are not unique to BYD, are non-discriminatory and are applicable to all regardless of brands and countries of origin. It applies to all new automotive investments in Malaysia beginning September 2025, “except those using existing local assembly facilities”. Conversely, this also means that existing CKD operations can run without a local paint shop, which Proton eMas and EPMB both do not have.
Going back to Sim’s contract manufacturer suggestion, it’s a path that a couple of Chinese brands have gone down o late. Most recently, MG rolled off its S5 EV from EPMB’s Melaka plant, which also counts GWM, BAIC and Xpeng as clients. The Inokom plant in Kulim, Kedah – owned by BYD’s local partner Sime Motors – assembles EVs for Chery and BMW – will it have excess capacity to support BYD?
If not, could BYD and Sime/Inokom work together to build a fresh plant nearby, while using the local party’s manufacturing license? If MITI allows this, it could well be a potential off-ramp for the impasse between carmaker and government. There’s the small matter of the Tanjong Malim land that BYD has already secured – small change for the Shenzhen-based EV giant surely.
Anyway, here’s a list of possible EV contract assembly partnerships to our knowledge, based on what’s already established, or the current relationship between carmaker and assembler in the ICE realm.
- BAIC/Arcfox – previously signed with EPMB
- BMW/MINI – Inokom
- Changan – rumoured to be Berjaya Assembly, formerly the Oriental plant in Johor
- Dongfeng – previously signed an MoU with NexV, but no word since Neta’s collapse
- GAC Aion – Tan Chong
- GWM – EPMB with the G9 PHEV, but its EVs are still CBU
- Honda – own plant in Melaka, partnering DRB-Hicom, but no plans to CKD EVs
- Hyundai/Kia – Inokom, but no plans to CKD EVs
- Jetour – Berjaya Assembly, but no plans for CKD EVs so far
- Leapmotor – Stellantis’ own plant in Gurun, Kedah. Ex-Naza plant
- Mazda – Inokom, but no plans for CKD EVs
- Mercedes-Benz – DRB-Hicom in Pekan, Pahang
- MG – EPMB
- Nissan – Tan Chong’s own plants in Segambut and Serendah, but no CKD EV plans
- Perodua – own plant in Sg Choh, with plans to purchase or contact assemble at Tan Chong Serendah
- Peugeot – Stellantis’ own plant in Gurun, but no CKD EV plans
- Porsche – Inokom, but no plans for CKD EVs
- Proton – own dedicated EV assembly plant in Tanjong Malim
- Toyota – UMW, now under Sime. But no CKD EV plans
- Volkswagen – DRB, but no CKD EV plans
- Volvo – own plant in Shah Alam
- Wuling – Tan Chong Segambut
- Xpeng – EPMB
We didn’t include the Chery Group above as it deserves special mention. They had the Chery Omoda E5 rolling out from Inokom in Kulim, and the group currently operates its own plant in Shah Alam – the iCaur 03 will soon be CKD assembled here.
There’s more. Chery is building a new factory in Lembah Beringin, Hulu Selangor. It was granted a manufacturing license without the T&Cs imposed on BYD, as the Wuhu carmaker had signed the agreement before the September 2025 cut-off date, according to MITI. The same applies to all existing car plants in Malaysia.
Finally, Zeekr. The Geely-owned premium brand has announced that it will set up its own assembly plant in Tanjong Malim, with the CKD 7X expected to be rolled out in 2027 at the earliest. It remains to be seen if Zeekr is subject to the same new factory requirements as BYD, or if it will be allowed to operate under stablemate Proton’s ‘umbrella’.
Looking to sell your car? Sell it with Carro.
wat’s the fuss? ppl now heading to HEV, now only u start wanna steal some info on EV?
nobody said anything about stealing ev info, the real motive behind this is to enrich umno cronies, securing contracts after contracts to assemble something which is cheaper to import as a whole. the chinese car builders are not like those legacy japanese brands, no matter how cheap our labor cost is, our assembly line cannot undercut the cost of producing the exact same thing in their automated factory in china, so the production here will only be sold here locally, at a price set by umno cronies. congratulations Malaysians, we won against byd!
Why dont just stop all this BULLSHIT! everyone know all this explanation is just a BULLSHIT COVER up of the hypocrisy, arrogance, and weakness of the MITI!
You tell me that, they coming here, they dont need workforce? and they gonna ship all their workmans here from china? BULLSHIT!
all this follow ups explanation is just to JUSTIFY all the MITI SHIT
Yes they will. They’re already doing it. Japanese used to do it with higher management, but China does it with even the low-level production workers.
Even plant maintenance, etc. is done by China companies. Local companies are dying. Keep in mind, most of these bigger “local” companies are owned by local Chinese people. So its not just a “Bumiputera” thing
Local partner with lousy products??? Sod off
Tesla how?
Tesla always has special preference even in China, no local partner needed.
Wei got….Tesla also affected too as heard that especially since still CBU anyways
MITI scared of Trump lah
As I thought, those P1 P2 protection include local suppliers owned by multiple cleptocrats. They’re weak cowards, shivers in front of pure competition.
Other ministry were mulling over 150L ron95 quota, and these clown aren’t allowing sub 100k EV other than P1 P2 (QVE anyone? Or RM60k for only 230km of range?) They’re essentially blocking B40 and lower M40 from owning an EV.
Now one realised the power of these so called suppliers cronies for decades to determine who gets that 100 parts job for EV when compared to 2000 parts available in ICE cars. May the best suppliers win : Owh
Local partner? Sure, that actually benefits us. But if they cannot meet the standards of these big brands, who is to blame? Perodua QVE still source critical parts from China, because we dont have the capacity to produce said parts (i.e battery, electric motor, battery management system).
Strong the rent seeking mentality is. An assembler we will always be. Jobs saved yes, but future generations price will pay.
Cheat me once, shame on you, cheat me twice, shame on me. After the BYD fiasco and then u-turn, then left turn, right turn, upside down turn, no company will ever want to take the risk of invested money then get scammed because the “Rules Changed”.
Of course this is exactly the so called “Local Partner Overloads” are banking on. No competition means can continue to produce and sell 1980s junk tech, easy money.
Once bitten, twice shy,
Or
Once a cheater, always a cheater.
It’s sad to see one cheating themselves keep justifying what they are doing is for your good.
What do you think?
Bullshit la. BYD case is cause someone wants to be the local partner to get free money. Typical bumi policy.
Not Bumi lah….this is the minority 1% MAHA KAYA Umno warlord, normal bumi work hard like mad while this warlord’s getting fat thru their rent seeking
who the hail u fink u r? us? uk? eu? juz a poor underdeveloped state
Are local partners also umno APs hoarders?
15billion ringgit, 15,000,000,000 MYR spent on local suppliers ??? now that my friend is a big eye opener coupled with the 15yo manufacturing tech and quality discrepancies. even with so much investment, cannot move forward, in the end, local supplier just buy from China and rebadge as locally made to be sent, janji kenyang
How about TESLA? they dont have any plan of CKD at all? or MITI just scared of Trump?? hahahahaha
Flip flop policy by Miti, sekejap annoucement by Johari, sekejap further explanation by Sim, Minister and Deputy Minister no proper communication, what a crap policy…..
MITI –> Making Investors Think Twice Instantly