BYD scraps plans for Malaysian plant, begins exploring local EV assembly from CKDs
Chinese EV maker BYD is looking to localise production in Malaysia in the wake of the country’s removal of tax exemptions for EV imports at the end of last year, and a new requirement introduced in July on the minimum imported value of a vehicle. After cancelling plans for its own plant in Malaysia, the OEM is reportedly in talks with a partner to manufacture vehicles from complete knockdown kits (CKDs) in the country instead.
The Atto 3 is BYD’s most popular EV in Malaysia
BYD
BYD has cancelled plans to build its own greenfield plant in Tanjung Malim, Malaysia, but says it remains committed to the Malaysian market. The company is now looking at assembling vehicles from complete knockdown kits (CKDs) with a local partner and is reported to be in advanced discussions with its official distributor in Malaysia for the last four years, Sime Motors.
Sime Motors’ Inokom assembly plant already puts together vehicles under contract for BMW Group, Hyundai, Mazda and Porsche, as well as for rival Chinese carmaker Chery, serving both the domestic market and selected markets in the region covered by the Association of South-East Asian Nations (ASEAN).
BYD vehicles sold in Malaysia
Atto 2
Atto 3
Dolphin
Seal
Seal 6
Sealion 7
M6
Denza D9
Denza Z9GT
According to Sime Motors, production volumes at the plant have grown from 20,500 units in 2021 to over 31,800 units in 2025. Over this period, Inokom has exported a total of over 24,500 units to regional markets, establishing it as one of Malaysia's largest automotive exporters.
Sales of passenger vehicles in Malaysia have grown by 5% in the first seven months of 2026 to just more than 430,500 compared to the same period last year. Those sales are led by national vehicle makers Perodua and Proton, but BYD is among the Chinese carmakers making their presence felt.
BYD has sold more than 35,000 EVs in Malaysia since entering the market in late 2022, with just under 14,500 sold last year. It is the most popular EV maker in Malaysia and currently sells seven models, as well as two from its Denza luxury division. The BYD Atto 3 remains the most popular model. It has not yet been confirmed which models will be assembled from imported CKDs.
The removal of tax incentives on EV imports at the end of 2025 was followed in July this year by a ruling that finished EVs imported to the country must have a minimum value of RM200,000 ($49,000) and at least 180kW power which, combined with the import fee, makes imported EVs more expensive.
Finished EVs imported to Malaysia are subject to a 30% import duty, as well as a 10% excise duty, and a 10% sales and service tax (SST). However, under the ASEAN-China Free Trade Agreement, EVs from China qualify for a reduced preferential import duty of 5% in Malaysia.
