While electric vehicle manufacturing is often associated with China, Europe, or the United States, an increasing number of global automakers have established manufacturing operations in Southeast Asia, including Malaysia.

The latest development came in June, when the first locally assembled Xpeng G6 rolled off the production line at EP Manufacturing Berhad's (EPMB) facility in Melaka. The partnership between Xpeng and EPMB covers the G6 electric SUV and the X9 premium MPV, including a range-extended hybrid variant. EPMB has also secured first rights to assemble three future Xpeng models under the agreement.

Xpeng is not the only manufacturer investing in Malaysia. Leapmotor has selected the country as its ASEAN production base through Stellantis' facility in Gurun, Kedah. MG has commenced local assembly of the S5 EV with EPMB in Melaka. Great Wall Motor assembles electrified vehicles through the same facility. BYD has announced plans to establish manufacturing operations in the country. Domestic automaker Proton, backed by Geely, is also expanding its electrified vehicle line-up through the e.MAS 7.

Malaysia is located in Southeast Asia, where demand for electric vehicles is increasing while local production capacity has remained comparatively limited. The country offers right-hand-drive manufacturing capability for markets such as Thailand, Indonesia, Singapore, and Australia. Its automotive industry, developed over decades through the national car programmes of Proton and Perodua, provides manufacturing infrastructure and a skilled workforce.

Tax incentives have also contributed to the growth of local manufacturing. Malaysia temporarily removed import duties on fully imported electric vehicles, although these incentives are being phased out. Locally assembled EVs, however, remain exempt from certain taxes until the end of 2027. This policy has increased the incentive for manufacturers to assemble vehicles locally rather than rely on direct imports.

EPMB, headquartered in Shah Alam with manufacturing facilities in Melaka, has more than four decades of experience as a Tier 1 automotive component supplier. Its completely knocked-down (CKD) plant at HICOM Pegoh Industrial Park has produced vehicles for Great Wall Motor, BAIC, MG, and Xpeng. Phase 1 operations have an annual production capacity of around 6,000 units and are being expanded.

The establishment of manufacturing operations by multiple brands within the same region, supported by shared supply chains and production facilities, has contributed to the development of the local automotive manufacturing ecosystem. This has also been accompanied by investment in component supply, charging infrastructure, and workforce training.

Malaysia has outlined its intention to become a regional automotive hub for several years. Growing demand for right-hand-drive production among Chinese automotive brands, increasing EV demand across ASEAN, and government tax policies supporting local assembly have contributed to investment in the sector. A key consideration will be whether Malaysia expands beyond vehicle assembly into component manufacturing and research and development before the current tax incentives expire.