BYD has abandoned plans to build its own electric vehicle (EV) assembly plant in Tanjung Malim, Perak, and is instead in discussions with a local partner to undertake completely knocked-down (CKD) assembly in Malaysia.

BYD Malaysia Managing Director Jacob Ma confirmed the decision during a media briefing following the introduction of the Atto 3 Performance in Malaysia.

"To clear the air on this, the Tanjong Malim facility will not proceed. However, this decision does not mean that company has cancelled its plans for local assembly in Malaysia. Our commitment to local assembly remains," Ma said.

He added that brand is working with a local assembly company that has the capacity and capabilities required to meet its requirements and support local assembly operations. Discussions are at an advanced stage, with the necessary documentation being finalised. The company will announce the identity of its partner once the agreement has been completed.

Company originally confirmed plans for its own CKD facility in Tanjung Malim in August 2025. However, progress on the project had stalled, and as recently as August, Malaysia's Ministry of Investment, Trade and Industry (MITI) said it had not received an official notification from BYD on whether the company would proceed with the investment.

The decision to shelve the facility follows reports that company had been evaluating the conditions attached to establishing a new manufacturing operation in Malaysia. One reported requirement was that up to 80% of locally-assembled vehicles be exported. Company did not disclose the specific reason for abandoning the Tanjung Malim facility. When asked about the matter, Ma said the company's approach was to assess opportunities from a long-term perspective.

Sime Motors tipped as local assembly partner

Although company has not officially named its prospective partner, developments involving Sime Motors have led to speculation about a possible contract-assembly arrangement at its Inokom facility in Kulim, Kedah.

BYD Asia Pacific Auto Sales Division Vice-President and General Manager Liu Xueliang visited the Sime Motors Inokom plant in May, leading to speculation that the facility could become company's local CKD production site. Sime Motors is also the official distributor of BYD vehicles in Malaysia. Its leadership team subsequently visited headquarters in Shenzhen for discussions on "strategic priorities and areas of mutual interest".

The potential partnership would also be consistent with MITI's preference for EV manufacturers to work with established local partners rather than construct new manufacturing facilities.

Brand indicated earlier this month that it would announce its approach to local manufacturing within a week. Liu said the company would continue discussions with local partners regarding the development of Malaysia's new energy vehicle industry. The company has now confirmed that it will pursue local CKD assembly, although the identity of the partner remains undisclosed until the agreement is formally signed.

Local assembly becomes increasingly important

The move comes as Malaysia's regulations for fully imported EVs have become more restrictive. From July 1st, 2026, newly approved fully built-up (CBU) EVs imported into Malaysia must have a minimum declared cost, insurance and freight (CIF) value of MYR 200,000 (US$ 49,140) and a minimum power output of 180 kW (248 PS). The requirements followed the expiry of Malaysia's special tax exemption for imported CBU EVs at the end of 2025.

The changes affect the brand because several of its best-selling models in Malaysia are priced below MYR 200,000 and have power outputs below the new 180 kW threshold. Local assembly would allow the company to continue offering these EVs in the Malaysian market.

BYD reiterates plans for Malaysia

Despite abandoning its standalone plant, Ma said the decision does not represent a withdrawal from Malaysia.

"We continue to see Malaysia as an important market and strategic part of company's growth in the future. Plans might evolve, locations might change, and strategies might be refined, but what remains constant is our commitment to this market. We will continue to invest. Brand is here to stay," he said.

Ma further added that brand would continue to invest and develop its business as its operations expand.

The company is also expanding its product portfolio beyond its mainstream EV range. In July, company introduced the Denza Z9GT in Kuala Lumpur at MYR 358,800. Ma said the first batch of the model had sold out, with brand awaiting the arrival of the second batch. The location and structure of BYD's Malaysian manufacturing operations have changed, but the company intends to retain local assembly as part of its plans for the Malaysian market.