XPeng Names EPMB as Assembly Partner in Malaysia

XPeng has confirmed it is in talks with EP Manufacturing Bhd (EPMB) to begin mass electric vehicle (EV) CKD production in Malaysia from 2026, marking a key step in the Chinese automaker’s global expansion plans.

The move signals a shift towards a more localised strategy in the region. XPeng said it intends to leverage EPMB’s existing manufacturing capacity as well as planned expansions, describing the partnership as the most efficient way to establish a local production footprint in Malaysia.

EPMB recently announced the opening of its second manufacturing plant to meet growing demand from new brands, expanding its production capacity from 6,000 units to 30,000 units. A third plant has already been confirmed and is scheduled to come on stream in 2026.

XPeng’s plans also come at a critical time for Malaysia’s EV market, with tax exemptions for fully imported (CBU) electric vehicles set to expire at the end of this year. Speaking at the recent launch of the 2025 XPeng G6 facelift, Bermaz Auto Group CEO Datuk Francis Lee said the government currently has no plans to extend these incentives beyond 2025.

While XPeng has yet to disclose which models will be assembled locally or the expected production volume, the brand has clearly positioned Malaysia as a strategic manufacturing base to serve right-hand-drive markets across the wider ASEAN region.

The shift mirrors a broader trend among Chinese EV makers, which are increasingly pushing into overseas markets to improve profitability amid an intense and prolonged price war at home. Local production has also become an important strategy to reduce exposure to tariffs and trade barriers.

XPeng’s Malaysia initiative follows earlier overseas manufacturing moves. In July, the company began assembling its X9 model in Indonesia, marking its first production base outside China. In Europe, Magna Steyr — the same engineering firm working with Perodua on its QV-E project — is set to produce XPeng EVs at its Graz facility in Austria, helping the brand bypass European Union tariffs on China-made vehicles.

To date, XPeng has reported total sales of 391,937 units in the first 11 months of the year, up 156% year-on-year. Overseas deliveries in the same period nearly doubled to 39,773 units, underlining the growing importance of international markets to the company’s growth strategy.

Beyond XPeng, Malaysia is rapidly emerging as a regional EV manufacturing hub. BYD has partnered with Kuala Lumpur Kepong Group to build an EV assembly plant in Tanjung Malim, Perak, while Leapmotor is set to begin local assembly at Stellantis’ plant in Gurun, Kedah. 

Additionally, the Chery Group is developing its Chery Smart Auto Industrial Park in the Beringin High-Tech Auto Valley, and Geely is also establishing operations in the Automotive High-Tech Valley (AHTV) in Tanjung Malim, all reinforcing Malaysia’s rising role in Southeast Asia’s EV supply chain.