Malaysia’s new electric vehicle (EV) policy is designed to strengthen the country’s automotive industry rather than turn it into a “supermarket” for imported EVs, according to industry experts.
The new OTR policy
The Investment, Trade and Industry Ministry (MITI) has introduced a revised on‑the‑road (OTR) pricing policy under its Approved Permit (AP) franchise framework. The policy sets a minimum OTR price of MYR 250,000 (AUD $89,658) for imported vehicles to support local manufacturing and regulate the flow of foreign EVs.
This replaces the temporary MYR 100,000 (AUD $35,859) OTR floor price for completely built‑up (CBU) EVs, which was in place from January 2022 to December 2025 to stimulate early EV adoption and encourage local production.
The return to the higher threshold signals MITI’s intention to level the playing field for local and foreign EV makers, strengthen domestic assembly, and ensure imported EV prices reflect market conditions.
MITI Minister Datuk Seri Johari Abdul Ghani said the policy reflects a long‑term strategy focused on building local manufacturing capacity and reducing reliance on CBU imports. Critics argue the higher OTR threshold could limit new market entrants and reduce consumer choice.
Industry support or criticism?
Universiti Teknologi Petronas adjunct lecturer and Global Asia Consulting senior consultant Samirul Ariff Othman said the policy is not designed to exclude foreign EV makers. Instead, it encourages deeper integration of overseas companies into Malaysia’s supply chain and technology ecosystem.
“What is changing is not who can enter, but on what terms,” he said. “The concern is avoiding a scenario where Malaysia becomes purely a consumption market, especially amid global EV oversupply and aggressive price competition.”
These comments respond to claims linking the policy to an investment proposal by Chinese EV manufacturer BYD. The proposal includes:
- An assembly plant in Tanjung Malim
- 80% of output designated for export
- 20% of vehicles priced at least MYR 200,000 (AUD $71,716.78) for the domestic market
“The licence is granted on the basis that most output is destined for international markets, leveraging Malaysia’s free trade agreements and regional supply chains,” Johari said.
Earlier this week, The Star reported that BYD may be re‑evaluating its plans. Johari has since denied any link between the policy changes and BYD’s investment decisions.
Concerns about localisation
According to the New Straits Times, William Ng, President of the Small and Medium Enterprises Association of Malaysia, warned that without strong localisation requirements, the policy could erode the EV industry from the bottom up.
“Without strong localisation requirements, Malaysia would essentially become a supermarket for foreign EVs,” he said.
Did you find this article interesting? Click the ‘heart’ button above to give it a ‘like’!
