MITI Urges BYD to Invest in CKD Production Amidst Tax Exemption Expiry

Amidst the BEV tax exemption expiry in 2025, MITI has encouraged BYD to invest in CKD production here in Malaysia.

With the current tax exemption for battery electric vehicles (BEVs) set to expire later on Dec 31, 2025, the Ministry of Investment, Trade, and Industry (MITI) has urged automakers to invest in local production (CKD) for their BEV products.

MITI minister YB Senator Tengku Datuk Seri Utama Zafrul Aziz (right), has encouraged more BEV marques to set up their local assembly plant here in Malaysia

Speaking during the BYD Seal launch event yesterday, MITI minister YB Senator Tengku Datuk Seri Utama Zafrul Aziz said that the Malaysian government welcomes BEV manufacturers like BYD to set up their own local assembly plant here, as prices for the fully-imported (CBU) BEV models are expected to skyrocket once the tax exemption period ends.

“The indirect tax exemption offered by the government for imported BEVs has certainly played its role. Beyond 2025, we warmly welcome BYD if they have plans to expand their presence in Malaysia and invest in a production base here,” Zafrul said.

With BEV sales increasing by more than four times from around 3,000 units in 2022 to over 13,000 units in 2023, Zafrul said any CKD efforts carried out will surely boost the sales figure further. Aside from lucrative incentives, the MITI minister also highlighted that the strong English and Chinese language skills commanded by Malaysians, established electrical and electronics industries, and strong rule of law will all help to pull CKD investments into Malaysia.

“We welcome global EV makers to make Malaysia their regional hub to access this fast-growing ASEAN EV market,” he added.

All BYD models on sale in Malaysia, including the new Seal here, are fully-imported from China

Currently, all three BYD models on sale here in Malaysia, including the newly-launched Seal, are all fully-imported from BYD’s plant in China. With the current CBU tax exemption still going on, BYD Malaysia is able to price all of its three offerings competitively, with the new Seal starting at only RM179,800 – which is lower than the Tesla Model 3, which is often touted to receive a ‘red carpet’ treatment by the government.

While BYD has yet to reveal any localisation plans for its models in Malaysia, the top BEV marque previously announced that it would set up a dedicated assembly plant in Thailand. Set to serve as BYD’s ASEAN regional production hub, this proposed CKD plan will be built on a 96-hectare plot of land located in Rayong Province, with an annual production capacity of up to 150,000 units.