Malaysia is doubling down on restrictions for imported electric vehicles, raising the minimum price to 200,000 ringgit ($50,000) as it seeks to protect its nascent domestic industry from Chinese dominance. The move marks a sharp reversal from 2021, when Malaysia waived import taxes to spur E.V. adoption. Chinese automakers like BYD and Chery flooded the market with affordable models, capturing the bulk of Malaysia's small but growing E.V. sector.

Local manufacturers such as Proton and Perodua have since launched their own electric models, with Proton selling 6,701 units of its e.MAS 5 in the first quarter alone. The government's new policy aims to push Chinese companies to assemble vehicles locally rather than importing them. While BYD is reviewing its assembly plans in Perak, Chery is proceeding with a plant near Kuala Lumpur to produce hybrids and gasoline cars.

Malaysia's strategy reflects a broader Southeast Asian trend of balancing foreign investment with domestic job creation. Analysts note that E.V. makers will weigh whether setting up local plants makes sense if they already operate elsewhere in the region. The restrictions signal Malaysia's intent to build a self-sufficient automotive supply chain while still attracting foreign capital.