KUALA LUMPUR — Malaysia’s car-parts makers risk being left on the sidelines of the electric vehicle (EV) boom, as Chinese carmakers favour imported components and their own supplier networks, the South China Morning Post (SCMP) reported.

The squeeze is regional, with suppliers in Indonesia and Thailand also facing weaker demand for parts used in petrol and diesel cars while the barriers to entering EV supply chains remain high.

“The supply chain is very different between Japanese autos and Chinese EVs,” Bhima Yudhistira Adhinegara, executive director of the Centre of Economic and Law Studies in Jakarta, Indonesia told the Hong Kong newspaper.

Malaysia’s own experience shows how tricky it is, with BYD recently dropping plans for an assembly plant in Tanjung Malim after a dispute over export quotas and pricing conditions set by the Ministry of Investment, Trade and Industry, which defended the requirements as non-discriminatory.

The Chinese carmaker has since partnered contract assembler Inokom to assemble passenger vehicles at an existing facility in Kulim, Kedah.

Local value-add remains modest, with local news outlets reporting in March that domestically assembled EVs had just 20 to 30 per cent local content, compared with up to 70 per cent for foreign-branded cars with conventional engines.

Putrajaya has tried to bridge the gap, with the Malaysian Investment Development Authority bringing 23 local parts suppliers and 12 technology suppliers together with Chery in May 2025, resulting in four commercial agreements covering components, technology transfer and joint investment.

Analysts quoted by SCMP see servicing and hybrids, which pair a petrol engine with an electric motor, as a possible lifeline.