Several Chinese electric vehicle manufacturers, including Zeekr, XPeng, and MG Motor, are planning to begin local vehicle assembly operations in Malaysia by 2026 as the government gradually phases out tax incentives for fully imported electric vehicles.
According to Ministry of Investment, Trade and Industry Malaysia (MITI), the move comes ahead of the expiry of tax relaxations currently granted to completely built-up (CBU) electric vehicles. The shift is expected to encourage manufacturers to establish local production and assembly facilities, strengthening Malaysia’s domestic EV ecosystem.
MITI noted that EVs assembled locally will continue to benefit from full tax exemptions until Dec 31, 2027, providing a strong incentive for international manufacturers to set up assembly plants within the country.
The ministry also explained that the government’s decision to revert to the original RM250,000 minimum price requirement for imported CBU electric vehicles—after previously allowing a temporary RM100,000 floor price relaxation—is part of a structured transition strategy.
This policy aims to gradually shift the market from imported EVs to locally assembled vehicles, while safeguarding investments made by domestic companies and local supply-chain vendors.
The government expects these policy adjustments to support the development of a sustainable EV manufacturing ecosystem, while also creating high-value employment opportunities in engineering, advanced manufacturing, and automotive technology.
MITI stated that the expansion of EV assembly operations in Malaysia will help nurture local expertise and encourage greater collaboration between global automotive companies and domestic component suppliers.
The ministry’s statement was issued in response to a parliamentary question raised by Mustafa Musa, who sought clarification on the pricing structure for CBU EVs and the investment plans of Chinese EV manufacturers entering the Malaysian market.
The potential expansion of EV manufacturing and assembly activities could also influence industrial property demand, particularly in major economic hubs such as Kuala Lumpur and Selangor.
Manufacturers setting up production facilities typically require large parcels of industrial land in Selangor, where established industrial parks offer strong logistics connectivity and access to skilled labour. Areas such as Puchong continue to attract companies seeking factory space in Puchong, while the Subang area remains a key hub for businesses searching for well-located industrial property in the Subang area.
At the same time, the growth of the automotive and technology sectors is expected to increase demand for supporting services, including corporate offices and regional headquarters. This trend has helped strengthen the market for commercial property in KL, particularly in emerging business districts offering modern office space in Bukit Jalil.
As Malaysia continues to position itself as a regional hub for EV production and advanced manufacturing, these developments could play an important role in driving both industrial expansion and commercial property growth across the Klang Valley.
Yao Mu Realty, based in Kuala Lumpur, Malaysia, specializes in industrial real estate for factories and land, delivering professional and efficient solutions.
Posted by Yao Mu Realty Sdn Bhd on 12 Mar 26
Malaysia