If you take a seat back and look around what is going on around the world, carrots and sticks have been the same tactics used around the world , below are just a few examples

1. Thailand



2. Indonesia


3. Vietnam

If we dig a bit deeper into the 80:20 rules, you will find that

Export Quotas for Local Plants: Manufacturers setting up local plants (CKD) may face requirements to export a significant portion of their output—sometimes as high as 80%—though these terms are negotiated on a case-by-case basis.

Yes, the above is fact and valid and reflects current, high-stakes negotiations between the Malaysian government and new automotive entrants.

The "80% export requirement" is a real policy condition recently reported in the BYD CKD (Local Assembly) saga. This specific quota is part of a "pro-export" strategy used by the Ministry of Investment, Trade and Industry (MITI) to ensure that major new investments contribute to Malaysia's trade balance rather than just competing for a share of the domestic market.

Evidence and Source Details

The 80:20 Rule for BYD: In late March 2026, reports from The Edge and industry analysts revealed that MITI had imposed a condition on BYD's proposed Tanjung Malim plant: 80% of total production must be exported, leaving only 20% for local sale.

Domestic Caps: MITI confirmed that for certain new licenses, domestic sales are strictly capped—in BYD's case, at 10,000 units annually.

Non-Discriminatory Framework: MITI has stated that these conditions are not exclusive to Chinese brands but apply to all high-volume automotive assembly projects approved since September 2025 that do not use existing local facilities.

Why Does Malaysia Impose This?The government uses these quotas as a "strategic measure" to achieve three main goals:

Protect National Brands: By forcing foreign makers to export most of their output, the government prevents them from overwhelming local favorites like Proton and Perodua in the domestic market.

Global Supply Chain Integration: MITI intends to push Malaysia beyond simple assembly and into a regional hub for high-value manufacturing.

National Automotive Policy (NAP) 2020: These rules align with the NAP 2020 framework, which emphasizes "Next Generation Vehicles" (NxGV) and export-oriented
growth.

Negotiated Flexibility

As noted in the claim, these terms are case-by-case. For example, while BYD was hit with the 80% export target, existing players like Proton (backed by Geely) are actually under pressure to increase their exports to justify their "national" status, with a target of 10x growth in exports by 2030.

This post has been edited by EnergyAnalyst: May 10 2026, 09:12 AM

It is very premature (immature) to firmly believe all policies are cast in stone

Time and time again, it is proven that future is a flux

The only thing constant in life is change

It's true that policies are and should subject to changes or improvements due to the constantly evolving circumstances around the world but it should not come at a cost of irking foreign investments due to the inconsistency of policy implementations. In this case, MITI has nevertheless set a very bad image to the world by setting unclear policies, altering conditions and placing illogical requirements at will without considering the abrupt implications their decisions might cause to the automakers and end consumers like us.

The whole EV landscape in Malaysia is currently only at the infancy stage and I would go as far as saying that in 10 years time it won't even threaten the market share of ICE vehicles, let alone disrupting the entire trade balance. This entire 'protectionism' policy for EVs is premature at this stage and MITI could have implement it in stages rather than imposing it abruptly by giving a less than 2 months notice. So much for those renewable energy and green policies frameworks. These guys have blood on their hands

This post has been edited by HotshotS: May 10 2026, 02:02 PM

With all said and done, only BYD or SD in this case is making a kerfuffle, when the rest like Chery, MG and others are doing the opposite : how to make good use of the readily known rules (which MITI gas defended saying all policies have been made known all along to everyone of the auto makers for the longest time, so It is not a case of short notice , and perhaps an issue of BYD did not pay notice as others have?!)

Going back to MG and SAIC-Wuling as example, why do you think MGS5 and TQ Wuling was chosen to be CKD here? Because they are really exportable, so selling at 100k flooring locally and cap at 10,000 unit per year will not be an issue (because frankly speaking no EV models have ever reached that number in local sales (BYD Atto 3 is at best selling 3k per year these few years. The newer Seal is also just about less than 1.5k last year Dolphin is only laughable at less than 200 whole year last year. Sealion is the strongest about 5k last year. MY sell possibly only about 2k last year and Atto 2 is another good seller but still within a few hundreds per month with best month never exceeded 1k

To export 80% of the output is so doable simply because the low local sales number. EP Manufacturing Bhd (EPMB) aims to produce approximately 1,500 to 2,000 units of the locally assembled (CKD) MG S5 EV in Malaysia for 2026. don't tell me you can't even export 80% of 1.2k to 1.6k units

While not yet finalized, the Sealion 7 is a prime candidate for local assembly alongside other popular models like the Atto 3 and Seal, if you drill down to actual local sales numbers , they are small so in away if you build plant to just sell locally will be a joke of all measures , so BYD should be thinking of doing it with existing assembler and since your partner is SD, I am sure they have capacity to help you.

Malaysia government had openly admit there is local auto maker to protect and never hide the well known fact and despite that, many has come and many more still want to come.

We are not that unique as Vietnam is also doing that with their Vinfast

Yet BYD still play ball there at Vietnam as number #2 after Vinfast
https://cnevpost.com/2026/02/10/byd-surpass...-sales-vietnam/

This post has been edited by EnergyAnalyst: May 11 2026, 10:04 AM

malaysia is not a cost efficient export hub, our policies are just so unreliable and likes surprises instead of gradual tightening with clear indicators. Even with so much incentives and encouragement towards proton and perodua, their export quantities to date are just a rounding error in the grand scheme of things. We have already lost the anchor point 20 years back where thailand really build up a foothold and gained their automotive industrial capability as the detroit of the east.

Malaysia is pretty much in the top 3 most expensive country to own a car (singapore owns the top). Yet we have no feasible alternative choice like in singapore where the public transport really makes living sense. The crux of the matter actually being that, malaysians are just plain shit frustrated with the situation of propping proton/perodua so much that we just wish there are some real serious market entrants to slap their face to wake them and the government up for car prices that makes sense relative to our purchasing power.

We want real value for money. Just look at the equivalent s70 sibling model sold in china, it is sold at the myvi range after conversion to RM. Yes, because it is the economies of scale, procurement, government incentive etc.....but there is no reason why it can't be 10k lower than the current sticker price. Either geely is charging a huge royalty for using their base model or the management has too much "inefficiencies" and/or our economies of scale is so out of whack in all aspects that makes car industry in malaysia totally not feasible. We once wish our automotive industry can follow the path like how koreans did, but our local champions just keep letting us down.



This post has been edited by wkc5657: May 11 2026, 10:53 AM

Because Chery has already acquired the manufacturing license long before September 2025? Not sure about MG and Wuling if they are subject to the 80% export rule and RM100k floor price (again unclear policies). Bold of you to trust anything from those incompetent guys in MITI, their rules are often unclear to begin with so I don't blame the automakers. Don't even get me started with their ever changing policies, they literally mentioned in their press release that the decision to impose RM300k floor price and 180kW minimum power output on CBU EVs after 1st July 2026 was only conveyed to the automakers on 30th April 2026 via an engagement session. If MITI gave clear and timely instructions to the automakers, I'm pretty sure BYD won't even bother setting up CKD plant here. Admit protecting local automakers is one but discrimination policies against both CKD and CBU EVs is another.

As for the sales volume and export volume, only time will tell if it's doable. Even if you think it's doable just like what MITI think, the pulling out action of the automakers like BYD will answer this question loud and clear. Many more still want to come after all these ridiculous policies? Sorry but I really find this hilarious lmao. Please wake me up when there is another EV automaker managed to set up CKD plant in Malaysia after this, I will wait

This post has been edited by HotshotS: May 11 2026, 07:10 PM

I think hen you compare other countries to ours. You must be fair to look at what others have to paid as car prices, fuel prices electricity price, etc.

When you talk about how good Singapore is in terms of public transport, may I say why wouldn't it be when their car prices are over the roof

Equally, Malaysian car sales now topple Thailand and Indonesia despite smaller population because despite you saying our car prices are among the most expensive in the world, we are still one of highest ownership in the world, why is that?

You make it sounds like Malaysian competitiveness is weak but it that the reality? Why do you think about the following facts :

Global Hub for OEMs: Major international brands like Honda, Toyota, Nissan, Mercedes-Benz, and BMW have established production or assembly facilities in the country.

Regional Hub for Parts: The country is a major base for global component manufacturers such as Bosch, Continental, and Denso.

And, why Stellantis (Leapmotor), Xpeng, Tesla ,Chery and Geely are here despite many countries courting Tesla and fail

I think we need to maintain a balanced view of the situation.

Let's look at one example GWM Great wall motor, and the facts are:

GWM in Thailand: The Regional Powerhouse

Thailand remains GWM's primary base in Southeast Asia due to its sheer scale and early entry.

Production Volume: GWM sold 18,096 units in Thailand in 2025, a massive 146% increase from the previous year.

First-Mover Advantage: GWM entered Thailand in 2020 by acquiring General Motors' Rayong plant. By early 2024, it became the first Chinese brand to achieve mass production of pure electric vehicles (BEVs) in the country.

Infrastructure: Thailand hosts a more comprehensive "smart new energy" ecosystem, including battery assembly and a large retail network.


GWM in Malaysia: The Fast-Rising Contender

While smaller in total volume, Malaysia is currently outperforming Thailand in terms of relative growth and strategic manufacturing.Growth Rate: GWM Malaysia recorded a staggering 331% year-on-year growth in 2024. By the first half of 2025, sales had already surpassed the entire previous year's volume.

Export Hub Status: In a major strategic shift, GWM successfully completed the first export of locally built Wey G9 PHEV models from Malaysia to Thailand in early 2026. This establishes Malaysia as a key manufacturing hub for GWM's premium regional exports.

Market Share Ambition: GWM Malaysia aims to break into the Top 10 best-selling brands in the country by 2028, targeting a 6% market share.

No time to nap,

https://www.carz.com.my/2026/04/hongqi-is-c...ed-by-the-agong

Car volume in singapore is naturally limited by their very limited geographical land space, the island nation cannot be in a penang constant gridlock situation. Their government set up huge barriers to make it a luxury to own a car, while at the same time providing very accessible, reliable and affordable public transport system throughout the island nation. In malaysia, public transport convenience is at very select areas and last mile coverage has always been a pain point for public transport unless one is very strategic in choosing their place of stay and work in city areas. Our public transport ridership has always been on the low end for many years. Penang has pretty good bus networks, but the roads are just so congested almost all the time. Took me more than 2 hours of bus ride from airport to the ferry terminal, 90% of the time is crawling in traffic or waiting for traffic lights. Imagine this is happening in singapore.....

As you mentioned, our TIV being high, and there are so many car makes and tier 1 and tier 2 suppliers in our midst, but why thailand's scale is much larger and deeper? Why are they investing so much more in thailand than in malaysia? When open up shopee/lazada, why so much more selection of thailand oem, taiwan/china oem, but little selection of local oem? The only car make that was really serious in malaysia was volvo; honda/toyota are shrinking the models of assembly done in malaysia; nissan/subaru is a question mark; mitubishi seems like a limbo although there is some uplift recently; mazda focus only SUV assembly locally...

Those new brands came because of the brief few years when MITI put on really favourable tax free policy to encourage establishment of EV in our market and was flexible towards bespoke investment criteria and incentives for different companies. Even my current workplace is under bespoke scheme when the plant is set up here. This new quick flip of automotive policies, just doesn't leave anyone with a good taste and those brands may have hesitancy in investing further until there is another big shift in policy signaling.

Hongqi is a terrible example because they sell all kinds of vehicles (ICE, PHEV and EV) not just EVs alone and they also seemed likely to set up contract assembly deal with local assembly facilities (which make sense because according to Quill they are going to target the premium and ultra-luxury segment so their production volume will be low) so those ridiculous EV policies likely don't apply to them.

Alright see you I'm gonna continue with my hibernation

ok, sweet dream

A footnote

https://www.thestar.com.my/business/busines...-shifting-world

https://carnewschina.com/2026/05/01/byd-und...eas-deliveries/

Things are not that rosy for BYD it seems

https://cnevpost.com/2026/05/14/top-automak...ports-apr-2026/

BYD leads export (despite decliin8ng sales in China) follows by Chery than Tesla , follow by Geely and Leapmotor.

But what us interesting is the CKD kit numbers:

Notably, locally assembled vehicles from some automakers contributed significantly to overseas sales.

Vehicles assembled via CKD (Completely Knock Down) kits accounted for 56% of GWM's (HKEX: 2333) 4,094 overseas sales in April; CKD assembly contributed 27% of SAIC-GM-Wuling's 8,561 export units in April, and 12% for SAIC Motor Passenger Vehicle.

https://www.dsf.my/2026/05/xpengs-james-wu-...ng-in-malaysia/

What car make leaders comment about the issue of CKD in malaysia or other countries :

"Mr. Wu says Xpeng has to rise to the challenge but we found his explanation for the predicament they face to be quite elegant. We think it applies to many other Chinese EV manufacturers too. Here’s how he illustrates the problem:

Historically, legacy ICE vehicle manufacturers from Europe, the USA, and Japan have had good reasons to commit to localization of parts in Southeast Asia. That’s because certain components were simply cheaper to make in Malaysia, Thailand or Indonesia versus back in their home countries. Plenty of plastic and rubber parts, wiring looms, and eventually even semiconductor packages were easy to source for a competitive price within Southeast Asia. Unskilled and semi-skilled labour for vehicle assembly is cheaper here too compared to Europe and Japan.

In the 2020s, Xpeng and plenty of its Chinese EV rivals face the opposite problem with EVs – there is no financial advantage to sourcing parts locally when performing CKD when the supply chain in China is so mature and able to deliver massive savings and quality at scale.

In fact, in many cases there are simply NO OEMs fit to even supply parts needed for today’s highly integrated electric vehicles. A majority of the production is automated, even in China with sophisticated robots sourced from ABB of Switzerland. While initial investment costs are high, the labour of a robot cost pennies and can deliver the highest and most consistent quality in assembly.

Back to the topic of parts sourcing; James Wu pointed out that there are virtually no suppliers in Malaysia and Indonesia for ADAS and battery components, which make up such a large and important part of the cost of making an Xpeng. Plus, many EVs just aren’t made from as many parts as ICE vehicles, making it tougher to hit a certain percentage of parts localisation required for competitive pricing and tax breaks. Modern Xpeng vehicles take the lead from Tesla in their construction – complex rear and front subframes are cast as a single piece (gigacasting) instead of being welded together from smaller cast pieces. This is part of what makes modern EVs safer in crash tests and also much cheaper to produce in high numbers."

oppssss......no cost advantage in ALL major aspects compared to home country

This post has been edited by wkc5657: May 15 2026, 04:00 PM

It is a given fact what is made in China is always cheaper to produce in China.

No argument there, all countries already knows and acknowledge that.

So ask yourself this question, what then all.these countries going to do?

https://www.nst.com.my/news-cars-bikes-truc...-govt-ev-future

BYD to work with Malaysian govt on EV future

BYD Co Ltd has said that it remains committed to investing in Malaysia amid uncertainty of the Chinese carmaker's future after the government tightens rules on fully imported (CBU) electric vehicles.

BYD vice president Liu Xueliang said it will continue working closely with the government, distributors and dealer partners to develop new energy vehicle (NEV) solutions that are better suited to the local market.

..Liu, who is also general manager of BYD Asia Pacific auto sales division, said the

company respects all policies set by the government.

It hopes to support Malaysian consumers through its technology, operational expertise and long-term commitment to the market.

"Together with the relevant authorities of the Malaysian government and our distributor and dealer partners, we will find a path that is more suitable for the development of Malaysian automotive new energy vehicle solutions."

Liu spoke at the opening of the brand's third showroom in Penang by BYD and its distributor Sime Motors here today.

Liu also highlighted growing demand for EVs particularly during a recent visit to Sabah and Sarawak.

"Last year, I went to East Malaysia. I felt a lot of demands and different types of demands from the East Malaysian customers.

"I have made a promise to them that I will definitely bring their favourite new energy vehicle products to East Malaysia," he added.

Meanwhile, Liu said the latest Penang showroom is part of BYD's broader effort to contribute to Malaysia's green technology development and EV ecosystem.

The automaker believes Penang could play an important role in Malaysia's green mobility ambitions, supported by investments in EV-related infrastructure, technical training and aftersales capabilities.

Malaysia has been positioning itself as a regional EV hub through various incentives and industrial policies aimed at encouraging EV adoption, localisation and investment in charging infrastructure and talent development.O

https://soyacincau.com/2026/05/18/byd-to-st...kd-sime-inokom/

BYD is here to stay in Malaysia: CKD with Sime Motors set to happen soon?

Sime Motors revealed that the BYD team have visited Inokom’s assembly plant in Kulim, Kedah. Inokom is a subsidiary of Sime Motors that provides contract manufacturing services, and the Kulim plant already has experience assembling BEVs, including Chery Omoda E5 and BMW i5 CKD.

So here sparks another speculation...



https://autobuzz.my/2026/05/18/sime-motor-l...om-in-malaysia/


Official:

https://www.simemotors.com.my/media/latest-...P95ZBCQnL3rgO9g

This post has been edited by EnergyAnalyst: Today, 07:43 AM