MALAYSIA’S electric vehicle (EV) industry is facing growing uncertainty after the government announced stricter conditions for the import of completely-built-up electric vehicles, prompting warnings that affordable EV options could rapidly disappear from the market.
Under the new rules, which will take effect from 1 July, imported fully assembled electric vehicles must carry a minimum cost, insurance and freight value of RM200,000 and produce at least 180 kilowatts of motor power.
The policy shift has drawn mixed reactions from industry stakeholders, with supporters arguing it could strengthen local manufacturing capabilities while critics fear it may undermine the country’s push towards wider EV adoption.
President of the Malaysia Electric Vehicle Owners Club, Shahrol Azral Ibrahim Halmi, warned that the restrictions risk removing competitively priced foreign EVs from the Malaysian market at a critical stage in the sector’s development.
“We have enjoyed some of the best EV technologies at competitive price points over the past four years but this move will only unnecessarily hurt the competitive market,” The Star reported him saying.
Shahrol Azral cautioned that limiting affordable imported EVs could weaken public interest in transitioning away from conventional petrol-powered vehicles.
“The concern now is that this will then kill the growing EV adoption momentum and in turn have a chilling effect on EV infrastructure deployment,” he added.
Rather than restricting imports, he urged the government to accelerate plans under the Low Carbon Mobility Blueprint 2021-2030 by replacing public sector vehicle fleets with electric vehicles produced by local manufacturers such as Proton and Perodua.
“By replacing the fleet with suitable EVs from Proton and Perodua, this will help catalyse charging infrastructure development and also support the local EV market at the same time.
“Through leading by example, this should further incentivise greater public EV adoption as well as give a boost to local charging point operators,” he said.
He also called on the government to postpone implementation of the restrictions amid continuing instability in global energy markets.
The president of the Electric Vehicle Association of Malaysia, Dennis Chuah, said the government’s long-term objective of building stronger domestic EV capabilities was understandable but warned that execution would be crucial.
“If local markets become reliant on imports of many fragmented CBU models, we may end up depending too heavily on foreign technology without building enough local capability. So the government’s plan is understandable,” he said.
“But local manufacturers must be incentivised to not just assemble vehicles but also build deeper technical capability locally so we can develop new technologies, and strengthen local EV expertise.”
Chuah stressed that any effort to reduce reliance on imported EVs must be balanced carefully against the need to maintain affordable access for consumers.
He warned that sudden restrictions could slow EV adoption in the short term and undermine public confidence in the transition towards cleaner transport.
According to Chuah, Malaysia should prioritise the development of domestic EV engineering expertise, completely knocked down manufacturing operations and public charging infrastructure.
“The challenge now is the lack of commercialisation and market access, which can be solved by giving priority to public sector projects to EV manufacturers that commit to long-term local EV industry goals,” he said.
“We must also focus on creating visible high-value EV engineering jobs with stable long-term demand so graduates are able to see a clear long-term career path in this industry.”
Long-time EV advocate Zuhril Azhar Ibrahim criticised the proposed restrictions as overly abrupt and warned that middle-income consumers would be most heavily affected.
“This will heavily affect M40 consumers as affordable CBU EV models priced between RM100k and RM300k are being removed from the market too suddenly,” he said.
Zuhril expressed concern that reducing the number of imported competitors could weaken pressure on manufacturers to improve pricing, innovation and customer value.
“The worry now for us is that with fewer competitors, there may be less pressure for existing EV players to offer better pricing, specifications, technology or customer value,” he said.
He added that he may reconsider purchasing another electric vehicle if affordable and technologically advanced options become increasingly limited under the new policy framework.
The debate reflects broader tensions within Malaysia’s automotive transition strategy as policymakers attempt to balance industrial development goals with consumer affordability and the country’s wider environmental ambitions. - May 11, 2026
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