KUALA LUMPUR (May 11): Malaysia’s electric vehicle (EV) policy is focused on developing the local automotive industry, not just protecting national carmakers Proton and Perodua, Deputy Investment, Trade and Industry Minister Sim Tze Tzin said. The government is encouraging foreign EV companies to set up operations in Malaysia and work more with local suppliers.

"We want foreign manufacturers to collaborate with our local vendors in the ecosystem so that they can enhance their capabilities, move up the value chain and position Malaysia to become an exporter of automotive components and parts while also preparing for the future of autonomous driving," he told reporters on the sidelines of the 2nd Asean Automotive and Mobility Conference organised by PwC Malaysia on Monday.

“That is the objective, to strengthen the entire ecosystem. The ecosystem is not serving just two companies or only Proton and Perodua but many carmakers, including European, Japanese and Chinese brands operating in Malaysia,” he added.

Sim was addressing concerns over new rules from the Ministry of Investment, Trade and Industry. Come July 1, 2026, EV imports must cost at least RM200,000 and have a minimum motor power of 180kW.

Sim said the policy is intended to encourage foreign automakers to establish local assembly operations or collaborate with Malaysian contract manufacturers and suppliers.

He rejected concerns that the RM200,000 minimum price for imported EVs will limit access to cheaper models, as carmakers can still offer EVs priced between RM100,000 and RM200,000 through local assembly in Malaysia.

“If they want to price EVs between RM100,000 and RM200,000, they can work together with contract manufacturers to manufacture here,” he said.

During his opening speech at the conference, Sim said the government’s focus is on building a “complete ecosystem” encompassing manufacturing, supply chains, infrastructure, talent and innovation.

He said Malaysia’s automotive sector contributed an estimated RM80 billion to RM95 billion to gross domestic product in 2025 and supported more than 750,000 jobs.

According to Sim, Perodua works with about 190 vendors while Proton has a network of 116 vendors, with combined procurement spending of almost RM15 billion on local parts suppliers.

Malaysia currently has more than 640 automotive parts manufacturers, including between 150 and 180 Tier 1 suppliers serving both local and foreign brands.

Sim said Malaysia’s ambitions in the automotive sector are closely linked to its strength in semiconductors, particularly as EVs and autonomous vehicles become increasingly software- and chip-intensive.

“One area where Malaysia holds a distinct strategic advantage is in the semiconductor sector. Malaysia is currently the world’s sixth-largest exporter of semiconductors. We have a well-established manufacturing base, strong capabilities in assembly and testing, and a growing presence in design and advanced packaging,” he said.

“Our goal is clear. We want to create a more integrated ecosystem where automotive and semiconductor industries work in synergy. This will allow us to capture greater value, strengthen our technological capabilities, and position Malaysia as a key player in next-generation mobility solutions,” he added.