Malaysia’s parts suppliers struggle to enter Chinese EV supply networks

Chinese electric vehicle manufacturers’ reliance on imported parts and existing supplier relationships is limiting opportunities for Malaysian component makers, the South China Morning Post (SCMP) reported. Local suppliers also face financial and technical hurdles in moving into EV production.

Reports published by local news outlets in March put the domestic content of EVs assembled in Malaysia at 20 to 30 per cent. The corresponding share for conventional-engine vehicles from foreign brands reached up to 70 per cent.

One government effort to secure more local participation involved Chery. In May 2025, the Malaysian Investment Development Authority convened talks involving the carmaker, 23 Malaysian parts suppliers and 12 technology suppliers. Four commercial agreements emerged, covering component supply, transfers of technology and joint investments.

Assembly plans have also encountered difficulties. BYD abandoned a proposed plant in Tanjung Malim after disagreements about export quotas and pricing conditions imposed by the Ministry of Investment, Trade and Industry. The ministry said its requirements were non-discriminatory. BYD later partnered with Inokom for passenger-vehicle assembly at an existing facility in Kulim, Kedah.

Motoring Malaysia managing editor Aiman Abdullah told SCMP that hybrid high-voltage systems could give suppliers experience relevant to EV components. He called for clearer planning by the government and carmakers: vendors generally require six to 18 months before full-scale production, while recovering investment takes about a decade. He also proposed funding to help smaller firms expand.

Maintenance could provide another route, Carsome co-founder and Carsome Academy CEO Teoh Jiun Ee said, although specialised work remains a constraint. Carsome performs EV inspections but sends battery-module repair and replacement cases to manufacturers, particularly for vehicles under warranty.