Concerns surrounding investment conditions for electric vehicle manufacturing have led to calls for policy reassessment from regional authorities in Malaysia.

Perak Industry and Investment Committee Chairman Loh Sze Yee stated that the federal government must re-evaluate the conditions imposed on electric vehicle companies planning to establish factories in the country, according to a media report.

This follows an earlier report by media sources, which stated that the Ministry of Investment, Trade and Industry had imposed terms on BYD for its local completely knocked down (CKD) assembly plans that the company could not accept, prompting a response from the ministry.

Amid claims that the Malaysian federal government had imposed unfavourable conditions on BYD, Johari Abdul Ghani denied the allegations, stating that the new automotive investment conditions are non-discriminatory and apply equally to all high-volume automotive assembly projects, according to media reports

Addressing concerns that BYD's plans to invest in a local assembly plant in Tanjong Malim could be affected, Loh stated that the conditions should be reassessed in line with broader considerations and long-term national interests.

"The Investment, Trade and Industry Ministry's industrial protection policy requires locally assembled BYD vehicles to adhere to an 80:20 export-to-domestic sales ratio," Loh said.

"In addition, an initial 40% localisation requirement, which entails sourcing components locally, has been set to support the local automotive industry. As a result of these conditions, BYD's plan to establish a CKD assembly plant in Tanjong Malim is now facing uncertainty," he continued.

The chairman further stated that the ministry introduced a new policy framework after BYD had submitted its application to invest in Perak. He further added that the policy was "introduced in a sudden manner, lacking transparency and institutional consultation", and had "disrupted existing plans and affected stakeholder confidence".

"The state government must make it clear that this development has had an impact on the project. It may affect investor confidence and could have long-term implications for Malaysia's overall business environment," Loh said.

He further added that the state of Perak would continue to pursue engagement and mediation within the available timeframe. The relevant authorities must provide a clear and transparent explanation for these policy changes to maintain policy stability and Malaysia's investment credibility.

The Perak state government also reiterated its position that any form of BYD's production presence in Malaysia must remain in Perak, in line with existing agreements and development commitments, while respecting the state's development rights, Loh stated.

"The project must not be relocated to any other state. BYD representatives conducted site visits in Malaysia early last year, with four other states also competing for the investment. Following evaluations, BYD identified a site near the KL-Kepong High-Tech Park in Tanjong Malim as its preferred location," he said.