Malaysia Is Increasing Local Tariffs To Protect Its National Car Brands

Starting July 1 of this year, local tariffs for imported EVs to Malaysia will increase based on the value of the vehicle. Malaysia’s Ministry of Investment, Trade and Industry (MITI) said in a statement earlier this month, May 2026, that the significant policy shift is designed to protect national automakers Proton and Perodua and their domination of the lower-priced mass-market EV segment while foreign brands compete primarily in the premium category.

The MITI has imposed a minimum CIF (cost, insurance and freight) value of RM200,000 (about $47,000) on all fully imported or completely built-up (CBU) electric vehicles. Once excise taxes, import duties, and sales taxes are added, the rule effectively pushes the retail floor for imported EVs to around RM300,000 (about $70,000). Moreover, the minimum power output must be at least 180 kW (approximately 245 PS) to fall into the category.

Key impacts on domestic and foreign automakers

Proton is expected to be one of the biggest beneficiaries of the policy. Its upcoming Proton e.MAS 5 now faces far less direct competition from lower-cost Chinese EVs such as the BYD Dolphin and the GWM Ora Good Cat, both of which previously targeted the affordable EV market.

Vietnamese automaker VinFast faces a more difficult challenge. Entry-level models such as the VF5 would effectively be pushed into a price range exceeding RM300,000 ($70,000), undermining their value-oriented positioning. To remain competitive, VinFast is reportedly studying local CKD (completely knocked down) assembly operations in Malaysia to bypass the new import restrictions and lower retail pricing.

Malaysia has also introduced a performance threshold requiring imported EVs to produce at least 180 kW, or roughly 241 horsepower. The move prevents automakers from importing lower-specification vehicles and repositioning them as premium products solely because of the higher mandated price floor.

Infrastructure expansion

Even as Malaysia raises barriers for imported EVs, the country’s charging infrastructure continues to expand rapidly. As of May 2026, Malaysia reportedly has more than 11,000 public charging points nationwide.

Gentari, the clean energy arm of Petronas, has established a strong lead in DC fast charging along the North-South Expressway and is increasingly integrating solar-powered charging hubs at highway rest stops. Meanwhile, chargEV has focused heavily on urban charging deployment and is estimated to hold roughly 60 percent of charging contracts in shopping malls, hotels and mixed-use developments. Tesla also operates the country’s largest proprietary Supercharger network in the Klang Valley, helping set benchmarks for charging speed and reliability.

The broader regional implication is significant. Malaysia appears to be balancing two competing priorities: accelerating EV adoption and simultaneously preventing its domestic automotive sector from being overwhelmed by low-cost Chinese imports.

In the short term, the higher pricing floor will likely slow mass-market EV adoption because entry-level imported EVs become far less accessible to middle-income buyers. However, the policy may also accelerate local assembly investments, particularly from Chinese and regional automakers seeking to avoid import restrictions. Over the longer term, Malaysia could emerge with a stronger domestic EV manufacturing base, though consumers may face fewer affordable options during the transition period.

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