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When the Ministry of Investment, Trade and Industry (MITI) strictly enforced new regulations on fully imported (CBU) electric vehicles, mandating a minimum Cost, Insurance, and Freight (CIF) value of RM200,000 and a power output threshold of at least 180 kW (245 PS), the public reaction was swift and furious.
To the average Malaysian car buyer, the rules felt like a blatant return to 1990s-style protectionism. It appeared as though the government was intentionally pricing out affordable imported Chinese EV, to shield upcoming national EV projects from Proton and Perodua.
However, former Deputy Investment, Trade and Industry Minister Dr. Ong Kian Ming says the public outrage isn’t necessarily because the policy itself is bad, but because the government failed miserably at communicating its real purpose.
Speaking at the CGS International ESG and Sustainability Conference 2026, Dr. Ong highlighted that while protecting national carmakers is an obvious outcome, MITI completely omitted a far more critical narrative: safeguarding Malaysia’s multi-billion ringgit local auto-parts manufacturing ecosystem.
TL;DR: The EV Policy PR Disaster Explained • The Public Backlash: MITI's strict EV import floor (minimum RM200k CIF value + 180kW power output) effectively eliminated cheap foreign CBU imports, sparking widespread consumer anger. • The Protectionism Myth: Buyers assumed the government was returning to 1990s protectionist policies solely to give Proton and Perodua a monopoly on sub-RM100k electric vehicles. • The Missing Industrial Context: Ex-MITI Deputy Dr. Ong Kian Ming revealed the restrictions actually aim to protect Malaysia’s multi-billion ringgit local auto-parts manufacturing ecosystem by pushing brands into local CKD assembly. • The PR Communication Gap: Government messaging failed to provide a counter-narrative, leaving consumers unaware that the policy preserves domestic factory jobs and supply chains. Key Takeaway: Poor communication turned a strategic supply-chain defense policy into a public PR nightmare.The "1990s Protectionism" TrapMalaysia boasts one of the strongest automotive supply chains in Southeast Asia. According to Dr. Ong, Malaysia ranks second in ASEAN for its automotive parts ecosystem, exporting significantly more in components than finished vehicles.
"If you look at Vietnam, they’re trying to produce their own car industry and go into EVs, but they can only probably produce 15% to 20% of their parts. Whereas for Malaysia and Thailand, we can go up to 80%," Dr. Ong explained.
When foreign manufacturers flood a market with cheap, fully-assembled CBU units from overseas factories, local Malaysian parts manufacturers get left out completely. By raising the barrier for CBU imports, MITI intended to push global giants like BYD to partner with local assembly plants (CKD), ensuring local factory workers and parts vendors get a piece of the pie.
However, because MITI failed to effectively articulate this economic reality, the public only saw one thing: the government making affordable cars expensive again.
"I think this is where the communications part is actually very important. When MITI announced these policies, there was no counter-narrative to explain how they would help local auto parts players who contribute significantly to our industry," Dr. Ong added.
Read: MITI Insists Tough New EV Rules Aren't Just To Protect Proton & Perodua From China Competitors
The Thailand Warning & The Monopoly RiskThe policy push wasn't created in a vacuum. Regulators watched closely as BYD flooded the Thai auto market with 150,000 units, disrupting local traditional manufacturing before establishing massive local operations. Fearing similar market chaos, Malaysian authorities rushed to erect safeguards.
While Dr. Ong agrees that encouraging local assembly (CKD) is necessary to protect domestic investments, he warned that policy execution must not backfire on consumers. He stressed that restricting lower-end imports shouldn't result in a market duopoly where only one or two national brands control the affordable EV segment under RM100,000.
"My personal preference is actually to allow CKD competition below RM200,000 and not allow EVs priced at RM100,000 and below to be monopolised by one or two players," he stated, emphasizing that if Malaysia wants true EV adoption, government policies must balance local industry survival with healthy consumer choice.
Source: NST
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