The EV CKD conundrum

IT is good that the government wants to grow Malaysia’s electric vehicle (EV) manufacturing capability. But in aiming to achieve this, should it include protectionist measures?

This comes to the fore in the lower segment of cars, given the prowess of China EV companies.

China EV players, which lead the world with their technology and ability to build high quality cars on the cheap, can finally price their EVs below RM100,000 when they start assembling the vehicles here.

But the incentives for completely knocked down or CKD cars have a correlation with the amount of local content being used.

To be sure, big name car manufacturers have already begun producing their EV cars here for some time now.

Volvo and Mercedes-Benz began first followed by BMW.

But those are the big segment cars which do not compete with the local car companies of Perodua and Proton.

It is the China marques that are at play here. They will easily be able to sell their CKD cars below the RM100,000 floor pricing, especially going by their ability to price their cars very cheaply in China.

How much of local content will go into these cars though?

​​The higher the local content, the less tax the car will face and hence the ability to price it lower.

The problem with the EV industry though, is that it will take time for localisation.

In addition, today China’s supply chain for parts is uncomparable.

They have the ability to produce parts at speeds and prices that others will find hard to match.

The heart of the EV is its battery, which makes up at least 30% of its total cost.

But which leading battery maker will want to have a facility in Malaysia? Our market may not be big enough to justify such an investment.

Locally, Malaysia does not have that level of technology and neither do we have vendors who can build a motor for an EV, the other important component.

All this will take time. But it will come, just like how the vendor system for traditional cars came about.

But if you force it, then you may have the problem that bogged Malaysia’s automotive industry in years before, where the home grown marque was given all the incentives and produced vehicles that were not up to mark.

Many would argue that in Proton’s case, after Geely came into the picture, the cars got better.

The weak vendors were weeded out while the stronger ones were retained.

But even in Proton’s case, where they will soon be starting production of their eMas7 at their plant, one wonders how much of local content is able to go into that vehicle.

Notably, one China CKD marque that has already priced their vehicle below the RM100,000 mark is the TQ Wuling Bingo EV with two main variants, priced from RM67,800 to RM72,800 before insurance.

An early-bird rebate of RM5,000 lowers the effective starting price to RM62,800, making it one of the most affordable EVs in the market.

This is a partnership with Tan Chong Motor Group.

A number of other China origin EV makers are at some stage of their CKD operations.

But all eyes are actually on the leading China EV maker, namely BYD. BYD is the global leader in EVs and has the lion’s share in Malaysia too.

It has announced plans to have a new EV assembly plant in Tanjung Malim, in the vicinity of Malaysia’s Automotive High-Tech Valley (AHTV).

It is true that the government is paying particular attention to BYD’s plans. Being the biggest and leading EV maker, it is in the strongest position to price their cars competitively.

Assuming they get the basic incentives from their CKD efforts, how then would they impact say Perodua?

This question is key also as it does seem that Perodua’s EV foray is slow to take off.

Perodua officially launched its first electric vehicle, the QV-E (Quest for Visionary Electric Vehicle), on Dec 1, 2025.

Although bookings are open (with 205 recorded by early February 2026), the EV has not had significant sales or customer deliveries yet due to production delays caused by quality control issues with new suppliers.

The QV-E is priced at RM80,000 (excluding insurance) and uses a battery subscription model, requiring a monthly fee of RM275.

Perodua invested RM800mil into the development of the QV-E, which has been billed as Malaysia’s first homegrown EV.

Perodua owns the intellectual property for the platform, which it calls an “independent” platform to differentiate itself from competitors which re-badge other parties’ models.

It is also true that Perodua is probably the car company that uses the most number of local vendors for its combustion engine cars, and so the thinking is that Malaysia needs its own EV platform in order to kick-start that whole vendor ecosystem.

The problem here is that the China car companies may be too far ahead to chase.

BYD can easily produce a RM80,000 car or less when it begins its CKD.

But will the government try to put some obstacles in BYD’s way, perhaps by forcing the China car company to export the bulk of what they produce in their Tanjung Malim plant?

Such a move could put BYD in a bind – it already has factories making EVs in Thailand and Indonesia.

Such a move could also be an uncompetitive trade practice.

And such a move would herald us back to the days of when the local car company dominated the market but with cars that did not meet the mark.

The consumer lost out then. The consumer would not want to lose out again.

The better move would be to encourage BYD to have better localisation plans.

After all, that is what the AHTV was built for.

A delicate balance needs to be struck between the interests of the consumer, the need to have job creation and not to be over protective of local players at the expense of the growth of the local EV market.