We're Lagging Behind! MAA Reminds MITI That Malaysia Is Already Losing The EV Race To Our SEA Neighbours

Malaysian Automotive Association (MAA) President Mohd Shamsor Mohd Zain

The government wants to accelerate Malaysia's transition into a high-tech green automotive hub, but local industry players are flashing a major warning sign: We are moving too fast with the tax stick, and it might backfire completely.

At the latest KLIMS 2026 media update event, Malaysian Automotive Association (MAA) President Mohd Shamsor Mohd Zain dropped a massive reality check on the Ministry of Investment, Trade and Industry (MITI). While MAA fully supports the government's long-term goal of boosting local manufacturing, they are openly pleading with MITI to slow down and execute its strict new import laws in phases.

The underlying message? If the government chokes the market with sudden, aggressive restrictions too early, everyday Malaysian buyers will lose out on affordable electric car choices, and our green goals will ground to a halt.

The Cold, Hard Truth: The Sub-4% Problem 

Malaysia loves to talk big about becoming an electric vehicle (EV) powerhouse, but the actual data shows a very different story.

During his address, Shamsor revealed a sobering statistic that should make every local policymaker sweat:

• The Reality: In 2025, fully electric car sales accounted for less than 4% of Malaysia's Total Industry Volume (TIV).
• The Competition: Regional neighbours like Thailand, Vietnam, and Indonesia have already smashed past a 15% EV market share.

MAA pointed out that limiting consumer options right now could completely derail the government’s grand masterplan, which aims to hit a 20% EV sales share by 2030 and net-zero emissions by 2050. You cannot build a thriving green ecosystem if you price the average consumer out of the market before the infrastructure is even ready.

What Is Changing On 1 July? 

The anxiety stems directly from MITI's updated fully-imported (CBU) EV policy framework. Starting 1 July, the government is placing a strict gatekeeper layout on incoming imports:

• All CBU electric cars must feature a Cost, Insurance, and Freight (Freight/CIF) value of at least RM200,000.
• They must generate a minimum power output of 180 kW (245 PS).

This is a massive defensive shield designed to force foreign automakers into building factories here. If you want to sell a cheaper car under RM200k, you have to build it locally.

The 80% Export Trap For Factories 

To make things even more complicated for global brands, MITI has also rewritten the rules for setting up local assembly (CKD) plants after September 2025. Any new car brand trying to build its own standalone factory in Malaysia must satisfy three brutal conditions:

• Adhere to a strict RM100,000 floor price for local vehicles.
• Build an incredibly advanced, high-cost paint shop from scratch.
• Export at least 80% of total production out of Malaysia.

That final 80% export requirement is an absolute mountain to climb for newer foreign entrants. Because building a standalone factory under these conditions is a financial nightmare, carmakers are being forced to abandon their solo construction plans. Instead, they have to scramble to find established local contract-assembly partners (like Sime Motors' Inokom plant in Kedah or Tan Chong) to survive.

Read: MITI Dropped New EV Rules, But BYD Says "We're Not Going Anywhere"

Why Is A 'Phased' Approach So Crucial?

When Shamsor explicitly called on MITI to roll out these changes in phases so the industry can "react and adapt," he was addressing a massive logistical hurdle that car manufacturers face behind the scenes.

In the automotive world, car brands operate on rigid, multi-year product development cycles. This means manufacturers generally cannot rewrite massive global shipping networks, secure entirely new battery supply chains, or re-engineer vehicle powertrains in just a matter of months to meet a sudden deadline.

By urging the government to provide some much-needed breathing room, a structured, phased transition would allow brands to naturally set up local CKD operations. Without it, companies may be forced to abruptly pull their affordable models from local showrooms entirely. Taking a more balanced path doesn't just protect consumer wallets; it ensures we keep creating local manufacturing jobs and genuinely help Malaysia catch up with the rest of Southeast Asia.

Read: RM300,000 Is The New Entry Level: 10+ Popular EVs That Won't Survive MITI’s July 1 Rule