EV industry needs domestic value addition alongside foreign investment

The development of Malaysia's electric vehicle (EV) industry must not solely rely on foreign investment, according to the Minister of Investment, Trade, and Industry, Datuk Seri Johari Abdul Ghani. He stressed the importance of balancing incoming foreign capital with a significant increase in domestic value addition, the empowerment of local vendor networks, and the effective implementation of technology transfer.

"These strategic measures are crucial for ensuring the local automotive ecosystem remains competitive, sustainable, and continues to serve as the primary engine for the nation's economic growth," Johari stated in a written parliamentary response. He was addressing a question from Mohd. Nazri Abu Hassan (PN-Merbok) regarding the rationale behind the government's new regulations for EV manufacturers and sellers in Malaysia.

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These strategic measures are crucial for ensuring the local automotive ecosystem remains competitive, sustainable, and continues to serve as the primary engine for the nation's economic growth.

Johari emphasized that attracting foreign investment requires a balanced and cautious approach, ensuring that the development of the domestic automotive industry, particularly national car manufacturers, is not overlooked. "In this regard, the government has extended tax incentives for locally assembled (CKD) EVs until December 31, 2027," he said.

These incentives are designed to enable the local industry to produce more competitive EVs that meet market demand, while simultaneously strengthening the domestic supply chain. The government's strategy aims to foster a robust local EV ecosystem that benefits from global advancements while prioritizing national industrial capabilities and economic contributions.

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In this regard, the government has extended tax incentives for locally assembled (CKD) EVs until December 31, 2027.