BIMB Securities has foreseen policy shifts Malaysia from import-driven to localization-driven electric vehicle (EV) growth, pushing foreign original equipment manufacturers (OEMs) toward completely knocked down (CKD) assembly.
The research house said in a recent note that Malaysia’s recent protectionist measure, will require all completely built-up (CBU) EV imports to meet a minimum cost, insurance and freight (CIF) value of MYR 200,000 ($50,333) and power output of at least 180kW, is structurally positive for CKD-focused local players but raises affordability and EV adoption risks in the country.
According to the research house, the new policy clearly segments Malaysia’s EV market into three distinct tiers.
It sees only premium high-performance completely built-up (CBU) EVs meeting the criteria will continue to be imported.
These include flagship models such as the BYD Sealion 7, Denza D9, BMW iX xDrive50, and select high-end Tesla and luxury European offerings, all expected to retail well above MYR 300,000 ($75,500) on-the-road (OTR).
In contrast, the popular mass-premium segment (MYR 150,000 [$37,750]–MYR 250,000 [$62,917]) will face a significant thinning of choices, with many current bestsellers likely to be discontinued for new CBU imports or priced out of the market.
“This creates a noticeable gap in EV offerings, leaving Malaysian buyers with limited affordable options outside of locally assembled models,” it said.
BIMB opined that this latest policy represents the logical third stage of Malaysia’s long-term EV industrial plan.
This move is seen as a strategic “checkmate” — discouraging brands that want CBU margins without local commitment — and rewarding those who invest with full market access.
Malaysia’s side of the bargain is equally clear: jobs, technology transfer, and lasting economic spillover.
“This policy is structurally bullish for local automotive players with strong CKD exposure but carries notable risks regarding consumer accessibility and the pace of EV transition,” it said.
It also maintained a neutral stance on the broader auto sector, favoring names with local manufacturing muscle while staying selective on pure importers company.
The research house also highlighted three key risks to watch ahead.
Firstly, infrastructure “deployment trap” as slowing EV adoption reduces charger utilization, threatening return on investment (ROI) for operators like Gentari, ChargEV and JomCharge.
This may stall infrastructure expansion and slows broader EV ecosystem development, it noted.
Secondly, trade and investment risk as it sees aggressive protectionism targeting competitive Chinese segments may trigger trade retaliation.
This could deter foreign OEMs from choosing Malaysia as a regional manufacturing hub, shifting their future high-tech manufacturing investments (like battery plants) to regional neighbors, it added.
Thirdly, consumer backlash as excessive price barriers may drive buyers toward “gray market” reconditioned imports or prolonged internal combustion engine (ICE) usage.
The Malaysian Ministry of Investment, Trade and Industry (MITI) has recently introduced stricter import requirements for new CBU EVs under the Franchise AP system, effective July 1, 2026.
This protectionist measure, which comes after the end of broad CBU EV tax exemptions in December 2025, aims to accelerate localization and shield the domestic automotive ecosystem.
It is important to note that the MYR 200,000 ($50,333) CIF value refers only to the landed cost (cost, insurance and freight) before Malaysian duties, taxes and margins.
As such, qualifying CBU EVs are expected to retail at MYR 300,000 ($75500) – MYR 360,000+ ($90,600) OTR, depending on brand origin and specifications.
It is noted that Malaysia’s EV policy has followed a deliberate three-stage industrial strategy.
The first stage (2022–2025) offered full tax exemptions on CBU EVs to rapidly build market demand and awareness.
The second stage focused on incentives for CKD assembly and imported parts to encourage localization.
However, as many brands — particularly Chinese OEMs like BYD — continued to rely heavily on duty-free CBU imports, the government has now entered the third and more aggressive stage.
Having set a MYR 250,000 ($62,917) OTR floor for new CBU brands in late 2025, MITI has now gone a step further — imposing a MYR 200,000 ($50,333) CIF floor effective July 2026, which translates to roughly MYR 300,000 ($75,500) to MYR 360,000 ($90,600) at the showroom.
“The message to foreign players is clear: commit to local assembly or exit the mass market,” said BIMB.