Malaysia's New EV Import Rules Squeeze Chinese Automakers' Market Access
The Malaysian government has implemented new, stricter regulations for the import of completely built-up (CBU) electric vehicles, a move expected to curtail market opportunities for Chinese automakers. Effective from 1 July 2026, the Ministry of Investment, Trade and Industry’s rules require imported CBU EVs to meet a minimum Cost, Insurance, and Freight (CIF) value of 200,000 ringgit (approximately Rp882.6 million) and have a motor power of no less than 180 kW (about 241 hp).
As the final selling price includes taxes, operational costs, and profit margins, vehicles meeting these requirements are anticipated to be priced well above the 200,000 ringgit threshold. This directly impacts Chinese manufacturers like BYD, whose current lineup in Malaysia consists of models with starting prices below that limit. Popular vehicles such as the BYD Dolphin and Atto 3 base variants also fall short of the 180 kW power requirement.
In addition to the import rules, the government has set strict conditions for new manufacturing projects. Any new assembly plant approved after 1 September 2025 must produce vehicles with a minimum price of 100,000 ringgit, export at least 80 percent of its production, and conduct high-value localisation processes including welding, painting, and final assembly within Malaysia. While these measures challenge direct imports, some Chinese firms are adapting through local partnerships. Leapmotor is set to begin local assembly of its C10 model in June 2026 at a Stellantis facility in Kedah, and Xpeng has announced plans to produce a right-hand drive version of its G6 model through a partnership with local manufacturer EPMB. By utilising existing manufacturing infrastructure rather than establishing new projects, these companies avoid the 80 percent export obligation. The Malaysian government stated the policy aims to foster high-quality investment, technology transfer, and a robust local supply chain, emulating the successful industrial model built by national carmakers Proton and Perodua.