Southeast Asia is witnessing increased Chinese automotive investment, with Thailand accounting for a significant share of current and planned automotive manufacturing activity.
A number of factories across the region are scheduled to begin producing Chinese electric vehicles (EVs) in 2026, as Chinese carmakers establish assembly lines as part of their overseas expansion strategies.
The expansion is driven by a saturated domestic market in China and incentives offered by a host of ASEAN governments. While these investments may contribute to the economies of recipient countries, analysts state that the extent of employment benefits for local workers remains uncertain.
EV manufacturer BYD is expected to commence production at its new facility in Indonesia in the first quarter of 2026, followed by the start of operations at an assembly plant in Malaysia later in the year, according to reports that have now changed after an announcement in early April 2026, where the Ministry of Investment, Trade and Industry (MITI) in Malaysia clarified the conditions for BYD’s local assembly (CKD) operations in Tanjung Malim, Perak where it emphasises that these rules are intended to build a sustainable local EV ecosystem rather than hinder the brand’s expansion and investment in Malaysia.
In case you were wondering, MITI’s changes and conditions for BYD in Malaysia for 2026 are as follows (see shared screen capture below).
Interim License & Strategy: BYD was granted an interim manufacturing license in September 2025 for export-oriented production.
Export Mandate: Reports indicate a requirement for 80% of CKD vehicles to be exported, with a 20% limit for domestic sales (capped at 10,000 units annually).
Minimum Pricing Floor: MITI stated a minimum on-the-road (OTR) price of RM100,000 for locally assembled BYD vehicles to prevent crowding out national carmakers (Proton and Perodua).
Localization Requirements: The assembly must include local body shop, paint, and trim operations, rather than just importing fully painted body shells
Meanwhile, these above mentioned factories/facilities will add to its existing factory in Thailand and a smaller plant in Cambodia.
Another Chinese carmaker, Chery, is reportedly scheduled to open a plant in Vietnam in the second half of 2026. The company also intends to complete construction in 2026 of a production base in Malaysia that will manufacture EVs, hybrid vehicles and conventional petrol-powered cars.
Both companies are part of a wider increase in manufacturing activity by Chinese EV producers in Southeast Asia, as regional governments seek investment in their automotive sectors.
