BYD Cancels Standalone Tanjung Malim Plant, Pivots to Contract Local Assembly at Inokom
BYD has confirmed a strategic overhaul of its Malaysian manufacturing roadmap, formally cancelling plans to construct a standalone electric vehicle assembly plant in Tanjung Malim, Perak.
Instead, the world’s leading new energy vehicle (NEV) manufacturer will proceed with local completely knocked-down (CKD) assembly in collaboration with an established Malaysian manufacturing partner.
The announcement was confirmed by BYD Malaysia Managing Director Jacob Ma, who clarified that while the original location and self-built factory approach have evolved, the automaker’s commitment to building vehicles locally remains on schedule. Formal contract finalization is currently at an advanced stage, with industry developments pointing directly to Sime Motors’ Inokom assembly plant in Kulim, Kedah as the manufacturing hub for BYD’s upcoming CKD lineup.
The Strategic Shift: Why Contract Assembly at Inokom Makes Practical Sense
In August 2025, BYD initially proposed building a 600,000-square-metre standalone production facility in Tanjung Malim. However, shifting to contract manufacturing through Inokom allows BYD to bypass lengthy greenfield industrial construction timelines and fast-track localized production:
- Existing Multi-Brand Infrastructure: Spanning over 200 acres in Kulim, Inokom is a contract-manufacturing subsidiary under Sime Motors—BYD’s official retail and distribution partner in Malaysia. The facility currently assembles passenger vehicles for several global marques, including BMW, MINI, Porsche, Mazda, Hyundai, and Chery.
- Proven High-Voltage Electrification Lines: The Kulim plant is already equipped with the tooling, safety enclosures, and skilled workforce required for high-voltage battery electric vehicles (BEVs), having handled local assembly for models such as the BMW i5 and the Chery Omoda E5.
- Bilateral Executive Verification: High-level leadership exchanges have accelerated the partnership. In May 2026, Liu Xueliang, General Manager of BYD Asia-Pacific Auto Sales, conducted an official site inspection of the Inokom Kulim complex. Subsequent reciprocal visits saw senior Sime Motors executives visit BYD’s global headquarters in Shenzhen, China, finalizing manufacturing parameters and engineering knowledge transfer.
Navigating Regulatory Pressures: CBU Constraints vs. CKD Tax Breaks
The strategic pivot toward swift local assembly is directly influenced by Malaysia’s changing electric vehicle policy framework:
- CBU Import Restrictions: Beginning 1 July 2026, Malaysia introduced tighter barriers on fully imported CBU electric vehicles, imposing a minimum CIF value threshold of RM200,000 alongside a minimum electric motor output requirement of 180 kW (245 PS). These regulations effectively restrict the volume importation of mass-market, lower-tier EVs.
- Full CKD Tax Exemptions: Locally assembled CKD electric vehicles continue to enjoy 100% exemptions on import duty, excise duty, and sales tax until 31 December 2027. Transitioning to Inokom contract assembly enables BYD to protect its price competitiveness and expand its domestic volume across budget-friendly and mainstream electric segments.
- Inventory Continuity: BYD Sime Motors Managing Director Adeline Lew confirmed that current nationwide vehicle inventories remain fully sufficient to support ongoing deliveries until the first locally assembled CKD models commence roll-off.
Strengthening the Long-Term Local Footprint
With cumulative deliveries exceeding 25,000 vehicles, BYD remains the top-selling dedicated electric vehicle brand in Malaysia.
By avoiding the capital-intensive and time-consuming process of building a separate facility from scratch, contract assembly at Kulim integrates BYD directly into Inokom’s network of roughly 370 domestic automotive suppliers. This aligns with the Ministry of Investment, Trade and Industry’s (MITI) mandate to increase local component sourcing (TKDN) and develop local high-voltage engineering expertise.
Beyond vehicle assembly, BYD plans to roll out next-generation high-power megawatt flash-charging hardware across Malaysia in the coming months, providing the essential infrastructure to complement its locally assembled model lineup.
