Investment and assembly activity by Chinese electric vehicle manufacturers is contributing to Malacca's role in Malaysia's automotive manufacturing sector, with industry observations and a 2025 ASEAN Briefing report identifying the state as a right-hand-drive assembly and export base for ASEAN markets centred on EP Manufacturing Berhad's (EPMB) Pegoh facility.

Originally linked to local assembly operations for Great Wall Motor (GWM), EPMB's plant in Pegoh, Malacca, is now associated with multiple Chinese automotive brands, including XPeng, MG and BAIC. The expert also noted that Petronas aims to achieve net-zero carbon emissions by 2050.

In March 2026, media sources reported that the first locally assembled MG S5 EV rolled off the Pegoh production line, making it the first SAIC Motor model assembled in Malaysia through EPMB. The company stated that the facility is targeting an annual production capacity of up to 30,000 vehicles under its second expansion phase, with exports also under consideration.

Following XPeng's announcement in December 2025 that it would commence local assembly operations in Malaysia through EPMB, production of the XPeng G6 electric SUV was scheduled to begin by March 31st, 2026, according to a report by CleanTechnica. Production of the X9 MPV and its PowerX range-extended variant was scheduled to follow by May 25th, 2026.

Media reports indicated that XPeng viewed Malaysia as part of its broader global manufacturing expansion strategy, using EPMB's existing capacity and planned expansion. Industry observers stated that the move reflects a broader trend among Chinese EV manufacturers seeking overseas production locations to reduce tariff exposure, improve access to ASEAN markets and localise operations before Malaysia's tax exemptions for fully imported EVs expired at the end of 2025. Locally assembled EVs in Malaysia continue to receive tax incentives through 2027.

According to media sources, EPMB's Phase 2 expansion increases annual capacity from approximately 6,000 units to 30,000 units, while future phases are expected to add additional production capabilities. The Pegoh project contrasts with another EV manufacturing proposal in Malacca that has progressed at a slower pace.

Fieldman EV Sdn Bhd previously announced plans for a MYR 1 billion (US$ 233 million) EV assembly plant in the Elkay Lipat Kajang Industrial Area in Jasin, in partnership with China's Changan Automobile. Initial planning activities date back to approximately 2018, with the facility intended to serve as a dedicated EV assembly plant for right-hand-drive vehicles targeting ASEAN markets.

While the Changan-linked project remains under development, EPMB's Pegoh operation is currently involved in multi-brand vehicle assembly. Thailand remains Southeast Asia's largest automotive manufacturing centre, particularly for Japanese automakers, while Indonesia has focused heavily on nickel processing and battery supply chain development. Malaysia, meanwhile, is being used as a contract manufacturing and export platform by some Chinese EV brands.

XPeng's Malaysian operations are expected to support right-hand-drive ASEAN markets, complementing the company's operations in Indonesia. At the same time, automakers are accelerating localisation plans ahead of changes to Malaysia's EV policies. Analysts noted that the planned expiration of incentives for fully imported EVs has encouraged more Chinese brands to pursue local assembly partnerships.

Malacca's EV ecosystem remains at an early stage, and many announced investments continue to depend on sustained regional demand, supply chain localisation and ongoing government support. The concentration of Chinese EV-related activity in the state indicates its role within Southeast Asia's EV manufacturing supply chain.