Amid scrutiny of electric vehicle manufacturing policies and foreign investment frameworks, developments involving BYD's local assembly plans have drawn attention to regulatory requirements in Malaysia, following a weekend report indicating that the Ministry of Investment, Trade and Industry (MITI) had imposed conditions on the Chinese conglomerate's CKD local assembly plans that it was unable to accept.

According to the report, MITI's requirements included exporting up to 80% of the vehicles produced in Tanjung Malim, with the remaining 20% of output allocated to models priced above MYR 200,000 (US$ 49,535) per unit. The issue has attracted attention and generated discussion across online platforms and social media, where, in the absence of detailed information, much of the discourse has been based on speculation.

In response to claims and confusion circulating on social media regarding MITI's conditions for BYD's manufacturing licence and related automotive policies, the ministry issued a press statement to clarify the matter:

Malaysia acknowledged the interest shown by BYD and other global electric vehicle manufacturers in establishing operations in the country. The establishment of operations at KLK TechPark in Tanjong Malim reflects ongoing foreign investment activity in Malaysia's industrial sector. The government stated that it seeks participation from manufacturers, including BYD, not only in vehicle assembly but also across the automotive value chain, including component manufacturing, research and development, logistics, and after-sales services.

The national automakers, Proton-Geely and Perodua-Daihatsu, account for more than 63% of local vehicle sales and support an ecosystem employing over 700,000 individuals, contributing approximately 4% to Malaysia's GDP annually. Their level of localisation is attributed to long-term investment. Perodua-Daihatsu maintains a localisation rate exceeding 75% for its mainstream models, while Proton-Geely is projected to reach 76% in 2025.

Proton-Geely has developed 18 technologies through its localisation programme, including joint ventures in fuel pumps, electronic gearshift modules, and CVT transmissions. Proton and Perodua have collectively invested in the Malaysian vendor ecosystem, supporting small and medium-sized enterprises, skilled workers, and related industries. This level of localisation has been identified as a reference point for further industrial development.

Further clarification regarding MITI's conditions for BYD's manufacturing licence and related policies has been provided in accompanying tables.

Malaysia has reiterated that it remains open to Chinese automotive investment. As of December 2025, 14 of the 34 foreign automotive brands in the market are Chinese, including BYD, Chery, Jaecoo, Jetour, Haval, Wey, MG, and Volvo. BYD was granted an interim manufacturing licence on September 29th, 2025. Chery Automobile received a manufacturing licence from MITI on June 26th, 2025.

These approvals indicate that the policy framework is intended to regulate participation by foreign investors. MITI stated that the policies are designed to support industrial development and manufacturing capabilities.

Under the National Automotive Policy 2020 and the New Industrial Master Plan 2030, Malaysia aims to develop as a production and export base for next-generation vehicles. The country has more than 592 specialised automotive vendors and a technical workforce supporting electric vehicle manufacturing. The policy framework is intended to support both domestic and export-oriented production.

KLK TechPark and the surrounding Automotive High-Tech Valley form part of an industrial corridor with an existing supplier network, engineering capabilities, and infrastructure for vehicle production.

Manufacturers such as Mercedes-Benz, Volvo and Stellantis (Peugeot) operate assembly activities in Malaysia. Chery Automobile has commenced construction of its manufacturing facility at the Beringin High-Tech Automotive Valley under similar conditions.

Malaysia's location within ASEAN provides access to a regional market of over 600 million consumers, supported by 17 free trade agreements that facilitate exports of locally assembled vehicles. The workforce is described as technically trained and experienced in manufacturing. The regulatory framework is defined by established standards and procedures.

Malaysia remains open to investment from automotive manufacturers, including Chinese companies. The policy framework focuses on local value creation, technology transfer, and employment generation.