Malaysia shifts EV strategy toward local manufacturing as import tax breaks end

Malaysia is moving to strengthen local EV manufacturing and technology development. (Photo: iStock)

Malaysia is shifting its electric vehicle (EV) strategy toward local manufacturing and technology development, as the government moves beyond earlier policies that relied largely on tax incentives to stimulate EV imports.

The policy shift comes as Malaysia’s EV market expands rapidly, driven in part by the entry of Chinese automakers that have captured significant market share but have yet to establish deep local supply networks.

According to Malaysia Automotive, Robotics and IoT Institute (MARii) CEO Azrul Reza Aziz, earlier waves of automotive investment, particularly from Japanese manufacturers, built extensive supplier ecosystems over several decades. New EV entrants, however, will likely need to bring in technology partners and develop local vendor networks to support production and innovation.