TQ Wuling has announced that SAIC-GM-Wuling (SGMW) and Tan Chong Motor Group have signed an agreement to explore the local assembly of electric vehicle (EV) batteries in Malaysia.

Further details were not disclosed in the announcement. Tan Chong Motor Holdings (TCMH) said in a filing with Bursa Malaysia that its indirect wholly owned subsidiary, TQ Manufacturing (TQM), has entered into a memorandum of understanding (MOU) with China-based Saike REPT Power Battery System to assess the feasibility of localising EV battery packs and other identified components in Malaysia.

The MOU, signed on September 17th, will remain in force for 12 months unless extended by mutual agreement or terminated earlier in accordance with its terms. Under the agreement, TQM and Saike will conduct feasibility studies and jointly evaluate the viability of producing EV battery packs and other identified components locally, including those for TQ Wuling vehicles.

The collaboration will also examine the potential supply of locally produced components to overseas markets. In addition, the parties will assess the handling, recycling and second-life utilisation of used EV battery packs as part of potential battery lifecycle management activities.

TQM is involved in the assembly and sale of motor vehicles and is the assembler and distributor of TQ Wuling electric vehicles in Malaysia following its collaboration with SGMW. Saike is the battery-pack supplier designated by SGMW for TQ Wuling EVs and is a joint venture between Liuzhou Saike Technology Development and REPT Battero Energy.

Tan Chong said the proposed collaboration is intended to address applicable localisation requirements, develop Malaysia's EV supply chain and assess opportunities in battery lifecycle management and potential exports.

The parties may enter into a definitive agreement on mutually agreed terms following the completion and outcome of the feasibility study. The MOU is not expected to have a material effect on TCMH's earnings per share, net assets or gearing for the financial year ending December 31st, 2026.

Wuling previously became the first Chinese automotive brand to produce EV batteries in Indonesia when the first unit of its Magic Battery rolled off the production line on the last day of 2024. The project, first announced in Jakarta on September 20th, 2024, involved an investment of MYR 24 million (US$ 5.8 million) and took 4.5 months from initiation to production.

The proposed Malaysian collaboration will assess the development timeline as the feasibility study progresses.