Malaysian CBU EV policy to help local automotive ecosystem, not just protect national brands – MITI

The ministry of investment, trade and industry (MITI) has rebutted claims that its new policy for CBU fully-imported EVs is only meant to protect national carmakers Proton and Perodua. Deputy minister Sim Tze Tzin said the regulations are also focused on developing the local automotive ecosystem by encouraging foreign brands to set up CKD local assembly operations and work with local suppliers, The Edge reported.

Sim said the said ecosystem does not only serve the local brands, but also European, Japanese and Chinese brands operating in Malaysia. “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 today.

The new policy, which comes into effect on July 1, states that all CBU EVs will need to have a minimum cost, insurance and freight (CIF) value of RM200,000 and a minimum power output of 180 kW (245 PS). This supersedes a ruling announced less than four months earlier, which mandated a minimum selling price of RM250,000 and a minimum power output of 200 kW (272 PS).

The new regs would exclude many sub-RM150,000 EVs currently on the market today – i.e. the Proton eMas sub-brand’s main rivals – based on their power outputs alone. As for those that do meet that criteria, the CIF value does not include either import and excise duties or distributor and dealer profit margins, meaning that they will effectively carry a retail price of at least RM300,000. For the full calculation, you can read our deep dive on the new policy here.

Sim added that foreign companies that want to continue selling EVs between RM100,000 and RM200,000 (we should again stress that the CIF value is not representative of the actual selling price) can do so by simply engaging Malaysian contract manufacturers and suppliers to assemble their cars locally.

“If they want to price EVs between RM100,000 and RM200,000, they can work together with contract manufacturers to manufacture here,” he said.

According to Sim, the government is focusing on building a “complete ecosystem” that supports the local automotive industry, including manufacturing, supply chains, infrastructure, talent and innovation. The automotive sector, he said, contributed an estimated RM80 billion to RM95 billion to gross domestic product in 2025 and supported more than 750,000 jobs.

Sim touted the strength of the local semiconductor industry as being integral of the government’s ambitions in the automotive sector – especially as EVs and autonomous vehicles become increasingly software- and chip-intensive – with the country being the sixth largest exporter in semiconductors.

“Our goal is clear. We want to create a more integrated ecosystem where automotive and semiconductor industries work in synergy. This will allow us to capture greater value, strengthen our technological capabilities, and position Malaysia as a key player in next-generation mobility solutions,” he added.

We should point out that MITI itself has frequently cited the protection of local carmakers as a key driver of its latest EV policies. While the intention to safeguard vendors is noble – the move could help prevent Malaysia from becoming a “dumping ground” for Chinese EVs, as is the case for countries like Thailand – we can’t help but feel there is an ulterior motive here.

For one, the decision to make affordable CBU EVs not just more expensive (and massively so, usually enough of an incentive for carmakers to invest in local manufacturing), but flat out banned altogether, only serves to aid Proton and Perodua without making any meaningful difference to parts makers. The constant flip-flopping on policies also means that foreign carmakers have less time to plan cohesive and coherent CKD plans – all the while the Proton eMas 5 and 7 continue to sit at the top of the sales charts.

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