KUALA LUMPUR (Feb 20): The potential move by Tesla Inc to establish a manufacturing plant in Malaysia remains under discussion, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz, noting that the electric vehicle (EV) maker may evaluate commercial viability amid intensifying competition in both regional and domestic markets.

Speaking in Dewan Rakyat on Thursday, Zafrul reiterated that Malaysia’s initial engagement with Tesla in 2023 primarily focused on setting up EV-related infrastructure, such as charging stations and sales operations, while plans for a manufacturing plant are still being deliberated.

“Several other Southeast Asian countries are also seeking to attract Tesla, but competition from other EV brands is affecting their efforts,” he said when winding up the debate on the motion of thanks for the royal address.

Zafrul noted that Tesla is facing growing global challenges, with its sales targets pressured by the emergence of rival brands offering "more affordable and technologically advanced EV models".

“To my knowledge, Tesla currently has only one manufacturing plant in Asia. Any decision to set up a plant in Malaysia will ultimately hinge on the company’s commercial outlook,” he added.

Tesla's expansion into Malaysia has placed it in direct competition with other EV brands, including BYD, MG, Great Wall Motor, and Neta.

Local carmaker Proton Holdings Bhd also entered the EV market with the launch of its first model, the e.MAS 7, in December 2024. The C-segment sport utility vehicle, based on the Geely Galaxy E5 platform, is priced at RM109,800 for the Prime variant and RM123,800 for the Premium version.

Tesla's future investment plans in Malaysia have previously come under scrutiny when reports surfaced suggesting the automaker was reconsidering its expansion into Malaysia and other Southeast Asian markets, dampening earlier expectations of a local assembly facility.

Still, Tesla continues to expand its presence in Malaysia through its direct sales model and the rollout of its charging infrastructure, with talks regarding potential manufacturing investment still ongoing.

Previously, Zafrul had said any foreign EV manufacturer seeking to expand its footprint in Malaysia must meet specific requirements under the government’s Battery Electric Vehicle (BEV) Global Leaders initiative.

These conditions include installing at least 50 ultra-fast chargers with a capacity exceeding 180kW, with a minimum of 30% of those chargers being accessible to the public and compatible with multiple EV brands.

EV makers are also required to collaborate with at least 10 local companies to develop the domestic charging ecosystem. This involves engaging local contractors for EV charger installations and sourcing equipment such as transformers and cables from Malaysian suppliers.

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