Remember the big news from last August, when BYD Malaysia confirmed plans to set up a local assembly plant in Tanjong Malim, Perak? If you’ve wondered why there has been no update on the progress of the facility, which was expected to begin production in the second half of this year, the reason for that silence has been revealed.
As The Edge reports, the fate of the plant, which was supposed to have been 100% funded by BYD, is up in the air, as the Chinese automaker is said to be relooking at its plans to set up production here, because it reportedly can’t agree with the terms set by the ministry of investment, trade and industry (MITI) with regards to related requirements.
According to the news report, it is understood that the contention is with the terms set by MITI, which would involve BYD exporting as much as 80% of the cars produced in Tanjung Malim, with the remaining 20% of production to be vehicles priced at above RM200,000 per unit.
“These [the 80% export figure and 20% production of EVs at above RM200,000 for the local market] were the terms they couldn’t agree on,” MITI minister Datuk Seri Johari Abdul Ghani told the publication in a brief phone conversation.
He added that there was a need to protect the local auto industry, which provides employment to some 700,000 people. “You must also remember that both Proton and Perodua have 50% local content in their cars, and Proton sells about 150,000 cars a year [while] Perodua sells about 350,000, which is a lot, and these two companies built much of the existing ecosystem for the auto industry in Malaysia. So, we have to protect them,” he said.
Asked if Chery Malaysia’s plans for a RM2.2 billion investment on its Smart Auto Industrial Park assembly plant in Hulu Selangor would proceed, Johari said that the deal has already been concluded, so it stands. The report adds that it is not known how this will impact several other Chinese carmakers such as Zeekr and Xpeng, which are understood to have plans to commence local assembly activities for EVs in 2026 following the end of the tax exemption on CBU EVs at the end of 2025.
The government has also introduced a new minimum price of RM250,000 for CBU fully-imported EVs, which not only covers new brands but also new models from existing brands, hence the growing push by carmakers on the CKD front. This implies a RM50k difference between the reportedly stipulated RM200k minimum for CKD EVs, and the minimum for CBU electric vehicles.
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AI-generated Summary ✨
Comments largely express frustration over Malaysia's protectionist policies, including high minimum prices and export quotas, which are seen as hindering the EV market and foreign investment, notably BYD. Many believe these policies protect local brands like Proton and Perodua, but argue they stifle competition, innovation, and drive prices up. There is concern that these measures may cause investment to shift abroad, slow technological progress, and negatively impact consumer choices, with some calling for more open markets and fair competition.