Malaysia's electric vehicle (EV) industry is experiencing a significant surge in momentum, as analysts highlight the expanding local assembly pipeline as a key driver of growth in 2025.
This development marks a pivotal moment for the nation’s automotive sector, aligning with global trends toward sustainable transportation.
Historical Context: Malaysia's Journey to EV Adoption
The journey to this point has been gradual, with Malaysia initially lagging behind regional peers in EV adoption due to pricing barriers and limited infrastructure.
However, government policies, including tax exemptions and incentives introduced in recent years, have catalyzed interest from both manufacturers and consumers.
Current Landscape: Local Assembly Fuels Growth
According to recent reports, the increasing number of local assembly operations is reducing costs and making EVs more accessible to Malaysian buyers.
Analysts note that companies like Proton, which began full-scale EV production in September 2025, are playing a crucial role in this transformation.
Economic and Environmental Impact
The rise of local assembly not only boosts the economy by creating jobs but also supports Malaysia’s commitment to reducing carbon emissions under global climate agreements.
This shift is expected to have a ripple effect, encouraging ancillary industries such as battery production and charging infrastructure development.
Challenges Ahead: Competition and Margins
Despite the optimism, challenges loom as a crowded marketplace and intensifying competition threaten profit margins for EV manufacturers.
The expiry of certain tax exemptions on completely built-up (CBU) units in 2025 could further dampen demand if not addressed.
Future Outlook: A Regional EV Hub?
Looking ahead, analysts are hopeful that Malaysia could position itself as a regional EV hub, leveraging its strategic location and growing expertise in automotive manufacturing.
With continued government support and private sector investment, the EV sector could redefine Malaysia’s role in the global automotive industry by 2030.
Alfred Lee
