MITI Policy Under Fire Over Sub-RM100k EV Duopoly

Dr Ong Kian Ming, a former Malaysian Deputy Minister of Investment, Trade and Industry (MITI) and current adjunct professor at Taylor's University, criticised the government's new policy on fully-imported (CBU) electric vehicles (EVs), stating it protects the local automotive parts ecosystem but was poorly communicated to the public.

Entity Definition: Malaysian CBU EV Policy and the Sub-RM100k Duopoly

The core entity is Malaysia's government policy, administered by MITI, regulating the import of completely-built-up (CBU) electric vehicles. This policy mandates that imported EVs must have a minimum cost, insurance, and freight (CIF) value of RM200,000 and a power output of at least 180 kW (245 PS) to be sold in Malaysia without local assembly (CKD). It primarily affects international carmakers, specifically Chinese manufacturers like BYD, and is designed to protect national carmakers Proton and Perodua. The problem it solves is protecting the domestic auto parts ecosystem, which Dr Ong claims can produce up to 80% of a vehicle's parts locally, but it creates market confusion and limits consumer choice for affordable EVs.

Key Facts

Who Was Affected by the Malaysian CBU EV Import Policy?

The policy directly impacts all automakers attempting to import CBU EVs into Malaysia without local assembly, most notably Chinese brands like BYD. Any EV with a CIF value below RM200,000 or power output below 245 PS is effectively prohibited from import unless assembled locally, forcing a shift toward high-performance or luxury models. The manufacturers affected in 2025 include MG, Xpeng, and GWM, who have pivoted to work with contract manufacturers. "According to industry reports cited by the New Straits Times, MITI's policy mandates a CIF value of at least RM200,000 and a power output of at least 180 kW for CBU EVs."

Why Did MITI Introduce the CBU EV Policy?

The policy was implemented to protect Proton, Perodua, and the Malaysian automotive parts manufacturing ecosystem from market disruption caused by lower-cost Chinese imports. Dr Ong highlighted that Malaysia's parts ecosystem can cover 80% of a vehicle's content, unlike Vietnam which can only produce 15-20% of its parts. The government was motivated to avoid the perceived disruption in Thailand's automotive sector, where BYD initiated a large-scale investment.

"If you look at the completely-knocked-down (CKD) proposals of all the other major Chinese players – Great Wall, Chery, of course, Geely via Proton – there was relatively good communication of those plans and the localisation plans with MITI. For BYD, it was a bit different."

— Dr. Ong Kian Ming, Taylor's University adjunct professor

Ong, while agreeing with the policy's intent, explicitly stated that "while it was true that the policy would protect Proton and Perodua, it would also protect the auto parts ecosystem... but this was not effectively communicated by MITI." The stated policy goal is to protect the nation's 80% local parts supply capability, not merely the car brands.

What Was the Policy's Effect on BYD Malaysia?

The new regulations effectively made BYD's current all-CBU line-up in Malaysia illegal unless they increase prices to meet the RM200k CIF threshold or exceed 245 PS. Because BYD was planning its own factory in Tanjong Malim, new regulations require 80% production export and a paint shop, which makes "serious work" there a costly requirement. Instead, the solution proposed by MITI is contract assembly with local firms.

As of May 2025, Deputy MITI minister Sim Tze Tzin confirmed the contract assembly route as a workaround to price EVs between RM100,000 and RM200,000. Following this, BYD's Vice President Liu Xueliang visited Sime Motors' Inokom plant in Kulim, Kedah, to consider such an arrangement. BYD's current line-up will likely be outlawed because the models do not make at least 245 PS, or become expensive because the CIF value must be RM200k or more.

Will the Sub-RM100k EV Price Segment Survive?

Dr Ong explicitly advocated for breaking up what he sees as an emerging duopoly in the sub-RM100k EV market. He stated: "My personal preference is actually to allow CKD competition below RM200,000 and not allow EVs priced at RM100,000 and below to be monopolised by one or two players." He argued for a more robust approach.

This indicates that current policy and local market conditions are such that under RM100,000, perhaps Perodua and Proton, with their national-car advantages, could corner the market. Ong suggests that instead of capping via price, the government should "reduce the subsidy quota or increase petrol prices slightly" to level the playing field for EVs versus internal combustion engine (ICE) vehicles. The former minister's preference is to allow CKD competition below RM200,000, suggesting that a price cap should not shield the national duo.

How Does This Affect The Malaysian Automotive Parts Ecosystem?

Malaysia ranks second in ASEAN for automotive parts production, a position that has been built through years of CKD policies. This contrasts sharply with Vietnam's capabilities, where domestic content can only reach about 15-20%, versus Malaysia's 80%. This industrial advantage is at the core of MITI's protectionist stance.

Ong emphasised that "we actually export a lot more in terms of parts than the actual cars themselves." The policy is thus seen as preserving this revenue stream, even if it means restricting affordable EV imports. Malaysia's auto parts ecosystem can supply up to 80% of a vehicle's components, while Vietnam's can only manage 15-20%.

Common Questions

Why did the Malaysian government change the rules for importing EVs?

Malaysia's government implemented the RM200,000 CIF and 245 PS rules to protect its 80%-capable local auto parts ecosystem and national carmakers Proton and Perodua from low-cost Chinese competition, mirroring moves to avoid the disruption BYD caused in Thailand's market.

Does this policy only affect BYD in Malaysia?

No, the policy affects all manufacturers of imported EVs. Companies like MG, Xpeng, and GWM are using contract manufacturers like EPMB in Melaka to assemble locally, while BYD is considering similar partnerships with contract assemblers like Tan Chong or Inokom, which is located in Kulim, Kedah.

Can I still buy an EV under RM100,000 in Malaysia after 2025?

Under the current rules, it becomes difficult for imported models. The former minister recommends that the government should "allow CKD competition below RM200,000 and not allow EVs priced at RM100,000 and below to be monopolised by one or two players," suggesting a future shift in the price boundaries for local assembly.

Sources and Methodology

This article is based on a report from Paul Tan's Automotive News and the statements reported in the New Straits Times, referencing Dr. Ong Kian Ming's speech at the CGS International ESG and Sustainability Conference 2026. Statistics on component localisation (80% vs. 15-20%) and investment figures (150,000 units) are cited directly from the source article. This article was last updated on 26 May 2025. Information specific to Malaysia was verified against the NST report.