KUALA LUMPUR (March 31): The Ministry of Investment, Trade and Industry (Miti) said on Tuesday that the conditions set for Chinese electric vehicle (EV) maker BYD’s proposed local assembly plant are non-discriminatory and apply to all high-volume automotive projects, regardless of brand or country of origin.

The ministry said the measures aim to promote sustainable, higher-value local assembly capacity while preventing disruption to the existing vendor ecosystem.

“BYD is not singled out, and the same conditions apply to any new CKD (completely knocked down) entrant,” Miti said in a statement.

The statement follows a report in The Edge Malaysia weekly's March 30–April 5, 2026 issue that BYD may reconsider plans to set up a CKD assembly facility in Tanjung Malim, Perak, after failing to agree with Miti’s conditions.

One of the sticking points reportedly involves a requirement for up to 80% of locally assembled vehicles to be exported, with only 20% allocated for the domestic market. 

The report also cited a condition that vehicles sold locally must be priced above RM200,000, which BYD allegedly did not accept.

"The allegation is inaccurate. The condition imposed for the domestic market is a minimum OTR price of RM100,000 for BYD's CKD vehicles sold domestically. 

"This ensures local assembly focuses on higher-value segments, preserving market space for national players like Proton and Perodua, while still offering affordable EV solutions," responded Miti.

Miti said BYD was granted an interim manufacturing licence on Sept 29, 2025, to assemble passenger energy-efficient vehicles (EEVs), including EVs and plug-in hybrid electric vehicles (PHEVs). The licence is export-oriented, with the majority of production intended for international markets to leverage Malaysia’s free trade agreements and regional supply chains.

The licence includes conditions to align with the National Automotive Policy (NAP) and the New Industrial Master Plan 2030 (NIMP 2030), to promote high-value activities such as local supply chain integration, technology transfer, and export production, and to prevent market distortion while ensuring sustainable industry development.

Miti said these conditions have been applied consistently to all new automotive investments in Malaysia since September 2025, except for projects using existing local-assembly facilities.

Additional conditions imposed on BYD include a domestic sales cap of 10,000 units per year, representing 20% of total production, prioritisation of exports, and a requirement that assembly processes include in-country body shop, paint, and trim operations.

Fully finished painted body shells (PBS) are not counted for local value-add assessment and must be sourced domestically, though BYD may source other components globally. The minimum on-the-road price for locally sold BYD vehicles is set at RM100,000.

The ministry also clarified that there is no ban on the importation of new pickup truck models, including BYD Shark and GWM Cannon. Commercial vehicles remain subject to CKD localisation requirements, and completely built-up imports are permitted under limited Market Research Pre-Assembly (MRA) Approved Permit quotas.

Miti reaffirmed its openness to Chinese automotive investment, noting that 14 of 34 foreign automotive brands in Malaysia as of December 2025 are Chinese, including BYD, Chery, Jaecoo, Jetour, Haval, Wey, MG, and Volvo.

Apart from BYD, Chery Automobile Co Ltd also received a manufacturing licence on June 26, 2025, to assemble vehicles locally. Construction of its plant at the Beringin High-Tech Automotive Valley has recently begun.

Miti said these approvals show that Malaysia’s policy framework is designed to encourage meaningful, high-value participation from foreign investors rather than act as a barrier to entry.

The ministry emphasised that the policies are developmental, aimed at transitioning Malaysia towards advanced manufacturing, including under the NAP and NIMP 2030. Malaysia’s declared goal is to become a regional production and export hub for next-generation vehicles (NxGVs).