Malaysia has big EV ambitions. It wants to liberalise markets to achieve its goal

A decades-old policy favouring local players over foreign investors has dulled Malaysia’s competitive edge in recent years

Now, Anwar Ibrahim’s administration wants to make the country ‘the darling of investors’ again – by boosting talent, ownership rules and renewables

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People inspect Tesla’s new Model 3 electric car during an official launch event in Malaysia last month. Photo: EPA-EFE

Published: 2:00pm, 5 Nov 2023Updated: 11:17am, 6 Nov 2023

Malaysia has started down a path of market liberalisation, as Prime Minister Anwar Ibrahim’s administration seeks to bolster the country’s competitiveness to draw lucrative investments in the electric vehicle (EV) space and steer the economy towards a net-zero carbon future.

Local players in industries such as the automotive sector and power generation have long enjoyed preferential treatment in Malaysia, where foreign investors are typically required to take on local partners and, in some cases, pay hefty premiums to bring in non-local brands – giving home-grown businesses an edge.

But the decades-old policy, which has its roots in an affirmative action policy that favours the country’s ethnic Malay majority, has dulled Malaysia’s competitive edge.

The government intends to change that.

Malaysia’s Investment, Trade and Industry Minister Tengku Zafrul Aziz. Photo: Handout

“We are too protective of some industries, in the understanding that they should improve. But how long are you going to protect [them]?” Tengku Zafrul Aziz, Malaysia’s investment, trade and industry minister, said in an interview with This Week in Asia.

“Then [local players] become comfortable and suddenly we become less competitive … now we have to give some tough love and I think we have to open up.”