JAKARTA – The Malaysian government has officially imposed stricter regulations on the import of Completely Built-Up (CBU) electric vehicles. The policy, which will take effect on July 1, 2026, is considered to reduce the opportunities for Chinese automotive manufacturers, including BYD, to expand the market for new energy vehicles in the country, as reported by Caixin.
Through the Malaysian Ministry of Investment, Trade and Industry (MITI), all CBU electric vehicles entering Malaysia are now required to meet two main requirements. First, it has a Cost, Insurance and Freight (CIF) value of at least 200,000 ringgit or around Rp883 million. Second, the vehicle must be equipped with an electric motor with a power of at least 180 kW or around 241 hp.
Because the selling price of vehicles also includes taxes, operating costs, and profit margins, it is estimated that eligible cars will be marketed at prices far above 200,000 ringgit. This condition is considered a challenge for various Chinese brands that have relied on competitive pricing strategies to attract consumers.
Launching Carnewschina, Friday, July 3, data from the Malaysian Road Transport Department (JPJ) shows that Chinese brands, outside of Proton owned by Geely, control about 60 percent of the Malaysian new energy vehicle market throughout 2025. However, with the latest rules, a number of models that were previously the mainstay are no longer eligible for import.
BYD, for example, currently offers seven models in Malaysia with an initial price below 200,000 ringgit. In addition, some models such as the Dolphin and Atto 3 basic variants also have power below the minimum provision of 180 kW. Not only BYD, other models such as the Zeekr 7X and Chery Omoda E5 also no longer qualify to enter Malaysia through the CBU import scheme.
On the other hand, the Malaysian government has also tightened requirements for manufacturers who want to build new production facilities in the country. For manufacturing projects approved after September 1, 2025, the vehicles produced must have a minimum price of 100,000 ringgit or around Rp384 million.
In addition, manufacturers are required to export at least 80 percent of total production, while sales in the domestic market are limited to a maximum of 20 percent. Not only that, the government also requires high-value-added processes such as welding, painting, and final assembly to be carried out in Malaysia as part of efforts to increase local content.
The plan to build a Completely Knocked Down (CKD) BYD factory in Tanjung Malim, Perak, with an area of about 600,000 square meters, is said to face challenges due to the new policy. Analysts quoted by Caixin assessed that the 80 percent export requirement was difficult for BYD to meet given that the company already had large production capacity in Thailand, Indonesia, and China.
However, several Chinese automotive manufacturers are still able to maintain their existence through cooperation with operating manufacturing facilities. In June 2026, Leapmotor started local assembly of the C10 model at the Stellantis factory in Gurun, Kedah.
Meanwhile, Xpeng announced the start of production of the right-hand drive version of the G6 with local manufacturer EPMB. Because they use existing manufacturing facilities and not build new projects, both initiatives are not subject to the 80 percent export obligation as stipulated in the latest policy.
The Malaysian government insists that this new regulation aims to attract high-value investment, accelerate technology transfer, and strengthen the supply chain of the domestic automotive industry. The move is also said to follow the industrial development model that has been implemented by Proton and Perodua.
The English, Chinese, Japanese, Arabic, and French versions are automatically generated by the AI. So there may still be inaccuracies in translating, please always see Indonesian as our main language.
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