KUALA LUMPUR, 2 JANUARY 2026 — A new set of stricter regulations for electric vehicles (EVs) is set to reshape Malaysia’s auto market in 2026, with new requirements mandating that fully imported (CBU) EVs from new brands be priced above RM250,000 and meet minimum power thresholds before they can enter the country, according to policy documents circulating ahead of implementation.
The directives, which are understood to have been issued by the Ministry of Investment, Trade and Industry (MITI) under updated Franchise Approved Permit (AP) guidelines, aim to tighten the entry conditions for EV makers yet to establish a presence in Malaysia and protect the interests of local industry and investment.
New Price and Performance Thresholds for CBU EVs
Under the new policy effective from 1 January 2026, the guidelines require that:
- All fully imported EVs (Completely Built-Up or CBU) from brands that have not previously been approved in Malaysia must be priced above RM250,000, and
- These vehicles must also feature a minimum motor output of 200 kW (about 272 PS) to qualify for Franchise APs.
The price floor and performance threshold are designed to ensure that only higher-spec, premium EV models enter the Malaysian market under this permit regime, effectively limiting the influx of lower-priced, low-power EVs from new foreign players.
Impact on Existing EV Models and Brands
Importantly, the new rules do not apply to EV brands and models already in Malaysia as of late 2025, those continue to be governed under the previous RM100,000 floor policy.
However, the removal of import and excise duty exemptions for CBU EVs from 1 January 2026 is likely to push up prices across the board for imports arriving after 28 December 2025, even if the RM250,000 floor rule only hits new entrants.
Why the Stricter Rules?
Officials and industry observers say the tougher entry conditions are meant to:
- Encourage serious investment and regional presence by global EV players rather than opportunistic imports,
- Protect local automakers and EV assembly efforts, many of which are expanding CKD (Completely Knocked Down) operations in Malaysia, and
- Avoid flooding the market with low-spec EVs that may undercut local production and service quality.
Several automakers, including BYD, Volvo, Mercedes-Benz, Chery, TQ Wuling and others, are already planning local EV assembly plants, which could allow them to avoid the CBU price floor and duties while supporting employment and EV ecosystem development in Malaysia.
Market and Consumer Implications
For buyers, the new policies signal that imported EVs from new brands entering Malaysia in 2026 will be positioned as premium products, with a higher price entry point than in prior years. This may shift consumer demand more toward locally assembled or established brand models, especially as duty benefits for CKD units remain in place through continued incentives.
Automotive analysts note that the combination of price floors, power requirements, and tax changes could reduce the number of small or budget CBU EV options entering Malaysia next year, potentially narrowing consumer choices but supporting long-term local industry and investment objectives.
