KUALA LUMPUR, Nov 2 — 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.

Aiman Abdullah, managing editor of Motoring Malaysia, said domestic carmakers’ electrification programmes were gradually building local engineering expertise, and that experience with the high-voltage systems in hybrids could help vendors move into EV components.

But suppliers still need clearer planning from Putrajaya and carmakers, he said, as vendors typically need six to 18 months to prepare for full-scale production while investments take about a decade to pay off.

“Investors need to see stability and focus in terms of policy before they take out their chequebooks,” he was quoted as saying.

Smaller firms may have the vision and some technical expertise but lack the money to break into EVs, according to Aiman who proposed a fund to help them scale up.

Elsewhere in the region, Thai suppliers are at a disadvantage on cost and proprietary technology, according to Krungsri Research, while Bhima urged Jakarta to use local-content rules to make EV investments absorb small local manufacturers.

Servicing offers another way in, though with limits, according to Teoh Jiun Ee, co-founder of used-car platform Carsome and CEO of Carsome Academy.

Malaysia already has a well-established ecosystem for conventional repairs such as bodywork, tyres and suspension, he said, but high-voltage systems, battery assessments and model-specific components are far more specialised.

Carsome can inspect EVs but cannot repair or replace individual battery modules, so it refers such cases to manufacturers, especially for cars still under warranty.

“For us, the broader opportunity is to develop a more mature used-EV ecosystem here, where vehicles can be assessed consistently and safely, and buyers have greater confidence in the condition of the cars they purchase,” Teoh was quoted as saying.