If you’ve been keeping a close eye on the Malaysian EV scene, you’ve likely been waiting for the arrival of Deepal, the sportier, tech-heavy electric brand under China’s Changan Automobile. Well, it’s time to hit the brakes on those expectations.
In a move that has sent ripples through the industry, Bermaz Auto (BAuto) announced on June 26 that it has officially terminated its distribution agreement for the Deepal brand. The venture, which was supposed to bring the S05 and S07 SUVs to our shores, has been scrapped before a single car was ever sold.
According to the official filing with Bursa Malaysia, the decision was mutual. After 19 months of negotiations regarding which models to bring in and, crucially, what the retail pricing should be, both Bermaz and Changan’s subsidiary, Mobitech, realized they were fighting an uphill battle.
The reason? The brutal state of Malaysia's current EV market.
We are currently witnessing an unprecedented "price war," with new models entering the country at aggressive price points almost every week. For Bermaz, trying to carve out a viable business case for a new entrant, especially one that would have to compete with the sheer momentum of established players, simply wasn't in the group's best interest.
The timing of this fallout is particularly telling. As of today, July 1, 2026, MITI’s new CBU (fully imported) EV regulations have officially kicked in. These rules set two major barriers: a minimum CIF (Cost, Insurance, and Freight) value of RM200,000 and a minimum power output of 180 kW.
⚡ New MITI CBU EV Mandate (Effective July 1, 2026)
While high-performance variants of the Deepal S05 and S07 are capable of clearing the 180 kW power mandate, many of their more "affordable" configurations fall short of this threshold. Even for the variants that do qualify on power, they hit a different, much harder wall: the RM200,000 CIF floor.
In plain English, the government is effectively saying that if a car’s base import cost isn’t at least RM200,000, it isn't welcome as a fully imported unit. By the time you stack import duties, excise duties, and sales tax on top of that RM200,000 base, the retail price of these "imported" EVs is forced into the RM300,000+ bracket.
This creates a "regulatory trap" for brands like Deepal. They are caught in a classic catch-22:
In the past, distributors like Bermaz would import CBU units to "test the water" before committing millions to a local assembly (CKD) plant. But today, the government has essentially banned that low-risk entry. By forcing all imports into a premium price bracket, they are signaling to carmakers: “Don’t come to Malaysia to test the waters, come here with a factory, or don't come at all.”
The Ultimate Takeaway
"The government has essentially banned the low-risk 'test-the-waters' phase. If a brand wants the Malaysian market, they have to risk millions on a local assembly factory from day one—or stay home."
Is Deepal dead in Malaysia for good?Not necessarily. While the Bermaz deal is dead in the water, it doesn't mean the brand is abandoning Malaysia. Industry insiders suggest that Changan (the brand principal) may still have plans to enter our market directly.
Instead of partnering with a local distributor, Changan could potentially manage its own operations here, allowing them more control over pricing and strategy. However, entering the market alone under today's new MITI mandates is a massive, high-stakes gamble.
