PETALING JAYA: New rules governing fully imported electric vehicles (EVs) – which take effect tomorrow – are not expected to trigger immediate price increases, but could gradually narrow choices in the affordable segment before local assembly capacity is fully established.
Under the new policy introduced by the Investment, Trade and Industry Ministry, all newly imported completely built-up (CBU) EVs arriving in Malaysia from July 1 must meet a minimum cost, insurance and freight value of RM200,000 and a minimum power output of 180 kilowatts (or 245 horsepower).
However, vehicles that are already in the country, at local ports or in transit before July 1, can continue to be sold under the previous framework until inventories are depleted, limiting the immediate impact on consumers.
It is also worth noting that locally assembled (completely knocked down or CKD) EVs will continue to benefit from tax exemptions until Dec 31, 2027.
TA Research analyst Angeline Chin said while the new policy for CBU EVs takes effect tomorrow, its impact on the ground would be gradual rather than immediate, as existing inventories and approved shipments can still be sold under the previous framework.
“We expect the effects to become more visible over the next three to six months, particularly in the affordable CBU EV segment, depending on inventory levels and individual brands’ localisation plans,” she told StarBiz.
“Consumers are unlikely to experience major disruptions in the near term, although model choices could become more limited if certain brands delay their CKD transition.”
A check with a sales centre of BYD, the country’s top foreign EV player, indicated that vehicle prices would remain unchanged, with existing inventory expected to last until October or November.
Despite concerns over tighter import rules, Chin said demand for EVs in Malaysia remains robust, noting that registrations exceeded 25,000 units in the first five months of 2026, almost double year-on-year.
However, she said the market remains relatively small compared with regional peers, suggesting that economies of scale and export potential would remain important considerations for global manufacturers evaluating local assembly investments.
“In our view, the policy is supportive of national automotive players and the broader localisation agenda. However, it could moderate EV adoption in the near term if affordable CBU options become more limited before sufficient CKD capacity is established,” she said.
“Over the longer term, the impact should remain manageable, provided locally assembled models can maintain competitive pricing and product offerings.”
Chin described the policy as a “reasonable compromise” as it still allows premium imported EVs to enter Malaysia, while encouraging more affordable models to be assembled locally.
Veteran automotive journalist Yamin Vong said the policy reflects the government’s intention to safeguard the local automotive ecosystem and jobs as the industry transitions from internal combustion engine vehicles to EVs.
“We need to protect our local industry, but the question is, what’s the right balance?” Vong said, adding that stronger localisation efforts could help preserve employment and create new opportunities in the EV supply chain.
However, he said Malaysia’s subsidised fuel prices remain a bigger challenge to EV adoption, as they reduce the cost advantage of EV ownership, particularly for motorists switching from conventional vehicles.
“If we really want to encourage EV adoption, the government should float fuel prices to market levels,” he opined.
Kenanga Research analyst Wan Mustaqim Wan Ab Aziz said the policy had already yielded results, as a number of automakers had begun localising production.
He noted that many marques – including Xpeng, MG and GWM – had already embarked on localisation plans through partnerships with contract assembler EP Manufacturing Bhd
in Melaka, while TQ Wuling has partnered Tan Chong Motor Holdings Bhd.
“Basically, we have already seen the impact of the policy,” he said.
Wan Mustaqim acknowledged that EV adoption could slow this year as manufacturers ramp up local production.
“Most probably there will be slower deliveries pending localisation,” he said.
“However, as automakers ramp up local production, we expect EV adoption to continue next year with stronger growth.”
Meanwhile, Electric Vehicle Association of Malaysia president Datuk Dennis Chuah said the policy helps provide clearer direction for the industry.
“It is good that this policy is in place because companies can plan better, rather than having an open-ended situation where anyone can simply bring in vehicles and start selling,” he said.
Chuah further noted that consumers may face fewer model choices, but said the policy would ultimately strengthen localisation efforts and improve after-sales support.
“It’s better to have fewer models than too many models, especially when it comes to spare parts and after-sales service.”
