New CBU EV policy to strengthen local EV industry ecosystem - Pekema

CYBERJAYA - New government guidelines tightening the importation of completely built-up (CBU) electric vehicles (EVs) are expected to accelerate the development of Malaysia’s local EV ecosystem, according to the Bumiputera Car Dealers Association, better known as Persatuan Pengimpot dan Peniaga Kenderaan Melayu Malaysia (Pekema).

Its president, Datuk Mohamed Nazari Noordin, said the new guidelines are expected to strengthen the shift towards completely knocked-down (CKD) assembly and technology transfer within the national automotive industry.

He said the requirement for a minimum Cost, Insurance and Freight (CIF) value of RM200,000 and a minimum motor power of 180 kilowatts (kW) for CBU EVs from July 1, 2026, is necessary to ensure the local automotive industry moves towards a higher-value chain.

"The move would also protect the domestic industry as Malaysia faces the risk of becoming a dumping ground for foreign EVs, particularly from China, where lower prices are driven by excess stock and domestic incentives.

"Some models that should be sold at higher prices are being offered much cheaper due to oversupply. Therefore, the government needs to protect the local industry from dumping,” Mohamed Nazari said.

On May 6, the Ministry of Investment, Trade and Industry (MITI) announced that all CBU EV imports would be subject to a revised minimum motor power requirement of 180kW, down from 200kW, as well as a minimum CIF value of RM200,000, effective July 1.

MITI said the decision followed the expiry of the four-year special exemption period for EV imports under the franchise Approved Permit (AP) scheme for CBU vehicles on Dec 31, 2025.

Companies with remaining stock, including existing inventory, port stock and vehicles in transit, will be allowed to sell the vehicles under the terms set during the special exemption period until stocks are depleted.

Commenting on the impact on consumers, Mohamed Nazari said the local EV market is expected to split into two segments following the policy implementation, premium CBU models and affordable CKD models with more options expected to return within 12 to 24 months as local assembly expands.

"In the short term, choices may be limited for certain segments, but within 12 to 24 months, more affordable models will return through CKD,” he said.

Mohamed Nazari added that existing CBU EV stock at ports, in transit and within importers’ inventories is expected to be sufficient until the end of this year, following the government’s flexibility measures.

He also expressed confidence that local automotive vendors already possess a strong foundation to support the transition to EVs, although Malaysia still relies on foreign technology for the development of key systems.

As such, Mohamed Nazari said collaboration with foreign manufacturers through CKD arrangements is important as a platform for technology transfer and local capability development.

To further strengthen the policy, he urged the government to expedite approvals related to CKD activities and provide a more flexible implementation period for the industry.

Mohamed Nazari proposed easier financing access for local vendors as well as broader incentives, including grants, tax exemptions and human capital development support.

"We hope the government can prioritise and fast-track CKD-related applications as industry players are moving in that direction,” he said. - BERNAMA