How does the policy encourage local EV assembly?

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Policy Encourages Local EV Assembly Through Minimum Cost and Power Requirements for Imports

New regulations implemented by the Malaysian Ministry of Investment, Trade and Industry (MITI) aim to stimulate local electric vehicle (EV) assembly by imposing stricter conditions on fully imported EVs. These measures, effective from July 1, establish a minimum cost, insurance, and freight (CIF) value of RM200,000 and a minimum power output of 180 kilowatts (approximately 245 horsepower) for imported EVs. The objective is to steer manufacturers towards establishing local assembly operations rather than relying solely on the import of finished vehicles, thereby fostering growth within Malaysia's automotive sector.
Minimum CIF Value and Power Output for Imported EVs

The core of the new policy lies in setting a baseline for imported EVs. A minimum CIF value of RM200,000 per unit and a minimum power output of 180 kilowatts are now mandated for all fully imported electric vehicles. This effectively raises the entry price for such vehicles, making them less competitive against models that could potentially be assembled locally. Vehicles that were already in Malaysia, at ports, or in transit before the July 1 implementation date are permitted to be sold under the previous regulations.
Exemptions for Brands with Existing CKD Operations

Crucially, the new regulations provide exemptions for automotive brands that have already invested in Completely Knocked Down (CKD) operations within Malaysia. Brands such as BYD, Chery, Jaecoo, BMW, and Mercedes-Benz, which operate local assembly plants, are not subject to these new import restrictions. This allows these manufacturers to continue offering their existing models at competitive prices, while simultaneously incentivising other global players to establish similar local manufacturing footprints.
Extended Tax Exemptions for Locally Assembled EVs

Further bolstering the push for local assembly, the government has extended tax exemptions for locally assembled EVs. These exemptions are set to continue until December 31, 2027. This prolonged period of tax relief is designed to make locally produced EVs more attractive from a cost perspective, directly supporting manufacturers who commit to assembling vehicles within Malaysia and encouraging a transition away from fully imported units.
Strategic Goals for Automotive Industry Growth

The overarching goal of these policy changes is to cultivate local assembly practices and enhance Malaysia's automotive industry. By creating a more favourable environment for local production and making fully imported EVs less accessible, the government intends to reduce the nation's reliance on imported vehicles. This strategic shift is expected to boost domestic manufacturing capabilities, create employment opportunities, and potentially lead to a more robust and self-sufficient automotive ecosystem.

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How does the policy encourage local EV assembly?

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