Perak industry and investment committee chairman Loh Sze Yee has said that the federal government of Malaysia needs to re-evaluate the conditions for electric vehicle companies planning to set up factories in the nation, reported The Star.
This follows a prior report by The Edge that the ministry of investment, trade and industry (MITI) had imposed terms on BYD for its local assembly (CKD) plans that the Chinese manufacturer could not agree to. Thereafter, MITI issued a statement in response.
Amid claims that the Malaysian federal government imposed unfavourable conditions for BYD, minister of investment, trade and industry Datuk Seri Johari Abdul Ghani denied the matter, saying that new automotive investment conditions were non-discriminatory and applicable equally to all high-volume automotive assembly projects, the report by The Star wrote.
With regard to concerns that plans by BYD to invest in a local assembly plant in Tanjong Malim may be jeopardised, Loh said that stringent conditions need to be reassessed based on overall benefits and long-term national interests.
“The Investment, Trade and Industry Ministry’s industrial protection policy requires locally assembled BYD vehicles to adhere to an 80:20 export-to-domestic sales ratio,” Loh said.
“In addition, an initial 40% localisation requirement entails sourcing components locally has been set in order to safeguard the local automotive industry. As a result of these stringent conditions, BYD’s plan to establish a CKD assembly plant in Tanjung Malim is now facing significant uncertainty,” he continued.
The state’s industry and investment committee chairman continued to say that it was regrettable that the ministry introduced a new policy framework after BYD had submitted its application to invest in Perak, stating that the policy was “introduced in a sudden manner, lacking transparency and institutional consultation,” and in doing so, has “severely disrupted existing plans and undermined trust among stakeholders,” he said.
“The state government must make it clear that this development has had a significant and tangible impact on the project. It not only weakens investor confidence but may also have long-term implications for Malaysia’s overall business environment,” Loh continued.
The state of Perak would continue to pursue constructive engagement and mediation within the available timeframe, he said, adding that the relevant authorities must provide a clear, transparent and convincing explanation for these policy changes to safeguard policy stability and Malaysia’s investment credibility.
The Perak state government also firmly reiterated its position that any form of BYD’s production presence in Malaysia must remain in Perak, in line with existing agreements and development commitments, while fully respecting the state’s development rights, Loh said.
“The project must not be relocated to any other state. BYD representatives conducted site visits in Malaysia early last year, with four other states also competing for the investment. Following evaluations, BYD identified a strategic site near the KL-Kepong High-Tech Park in Tanjung Malim as their preferred location,” he said.
The post Federal govt needs to review conditions for EV plants in Malaysia; BYD CKD must remain in Perak – exco appeared first on Paul Tan’s Automotive News.
