IPOH: The Federal Government needs to reevaluate its conditions for electric vehicle (EV) companies planning to set up factories in the country.
Perak industry and investment committee chairman Loh Sze Yee said there are concerns about some restrictive policies that could undermine foreign investors' confidence, damaging the country's investment image.
Commenting on concerns that Chinese EV manufacturer BYD's plan to invest in a completely knocked down (CKD) plant in Tanjung Malim may be in jeopardy, Loh said stringent conditions need to be reassessed based on overall benefits and long-term national interests.
"The Investment, Trade and Industry Ministy's industrial protection policy requires locally assembled BYD vehicles to adhere to an 80:20 export-to-domestic sales ratio.
"In addition, an initial 40% localisation requirement entails sourcing components locally has been set in order to safeguard the local automotive industry," he said in a statement on Thursday (April 16).
“As a result of these stringent conditions, BYD’s plan to establish a CKD assembly plant in Tanjung Malim is now facing significant uncertainty,” he said.
BYD was reported to be reconsidering its plan to invest the factory after failing to reach an agreement on new terms.
There had been claims that the federal government has imposed unfavourable conditions for BYD.
The matter was denied by Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani, who noted that new automotive investment conditions were non-discriminatory and applicable equally to all high-volume automotive assembly projects.
Loh said it was regrettable that the Ministry introduced a new policy framework after BYD submitted its application to invest in Perak.
"The policy was introduced in a sudden manner, lacking transparency and institutional consultation.
"This has severely disrupted existing plans and undermined trust among stakeholders,” he said, adding that such last-minute policy shifts raise serious concerns over policy consistency and credibility.
“The state government must make it clear that this development has had a significant and tangible impact on the project.
"It not only weakens investor confidence but may also have long-term implications for Malaysia’s overall business environment,” he added.
He said the state would continue to pursue constructive engagement and mediation within the available timeframe.
"The relevant authorities must provide a clear, transparent and convincing explanation for these policy changes to safeguard policy stability and Malaysia’s investment credibility,” he added.
Loh said the state government firmly reiterates its position that any form of BYD’s production presence in Malaysia must remain in Perak, in line with existing agreements and development commitments, while fully respecting the state’s development rights.
"The project must not be relocated to any other state.
"BYD representatives conducted site visits in Malaysia early last year, with four other states also competing for the investment," he said.
"Following evaluations, BYD identified a strategic site near the KL-Kepong High-Tech Park in Tanjung Malim as their preferred location," he added.
