Malacca Emerges as Malaysia’s Electric Vehicle Manufacturing Hub

Malacca is stepping into the spotlight as one of Malaysia’s most promising electric vehicle (EV) manufacturing hubs. With billions in investment commitments, growing local job creation, and government-backed incentives, the state is positioning itself as a key driver of Malaysia’s green mobility ambitions under the National Energy Transition Roadmap (NETR).

Strategic projects powering Malacca’s EV ambitions

Two major projects are transforming Malacca’s industrial landscape into an EV production zone.

Fieldman EV Sdn Bhd has committed 1 billion ringgit (US$233 million) to build the country’s first EV assembly plant in the Elkay Lipat Kajang Industrial Area, Jasin. In partnership with Changan Automobile of China, the plant will focus on producing right-hand-drive electric vehicles for Malaysia and the broader ASEAN region. The long-term plan, now in its final stages ahead of completion in 2026, has been underway since 2018, is expected to create around 5,000 jobs, and significantly boost local industrial capacity.

Complementing this is EP Manufacturing Berhad (EPMB), which has established a facility at HICOM Pegoh Industrial Park. With an investment exceeding 100 million (US$23.3 million), the plant has already rolled out its 1,000th vehicle as of December 2024.

Backed by partnerships with Chinese automakers Great Wall Motor (GWM) and BAIC, the facility has a targeted annual capacity of 30,000 vehicles in its first phase and is expected to support 1,000 new jobs.

Government support and incentives drive growth

The Malaysian government has aligned its policies with the national vision of becoming a regional leader in electric vehicle development, offering a range of incentives through agencies like the Malaysian Investment Development Authority (MIDA) and the Green Technology and Climate Change Corporation (MGTC). These include income tax allowances or pioneer status for EV and component manufacturers, as well as the Green Investment Tax Allowance (GITA), which provides 100 percent tax exemption for up to five years for qualifying companies.

Additionally, import duties and excise taxes on fully imported EVs are exempt until the end of 2025, with extended incentives for local assembly. At the state level, Malacca has committed to expanding EV infrastructure with plans to roll out up to 300 charging stations by 2026 to support the growing demand.

Malacca’s Supply Chain Readiness and Investor Edge

Malacca is positioning itself as a supportive base for the broader EV supply chain, with increasing interest in upstream activities such as battery pack assembly, thermal management solutions, inverters, and vehicle control software. While the state is still in the early stages of attracting component manufacturers, it offers well-zoned industrial parks with development-ready infrastructure and strong institutional backing.

Supporting this are targeted workforce development efforts led by institutions like UTeM and Malacca Polytechnic, which are equipping students with EV-specific technical and engineering skills. These programs are designed to meet rising demand from both vehicle assemblers and future parts suppliers.

Malacca also stands out for its investment value proposition. Compared to Selangor, which focuses on R&D and distribution, or Kedah, which hosts high-profile global brands, Malacca provides a cost-effective environment for manufacturing, with lower land prices, reduced congestion, and dedicated state-level facilitation.

Regional export potential and ASEAN integration

Malacca’s strategic advantage extends well beyond Malaysia’s borders. With its port access and participation in key trade agreements, EV manufacturers in Malacca are well-positioned to supply the broader ASEAN market, which is rapidly electrifying. Countries like Thailand, Indonesia, and Vietnam have introduced EV targets and incentives of their own, driving cross-border demand for passenger and commercial EVs.

Malacca’s proximity to Tanjung Bruas Port and improved rail and road connections to the Malacca Gateway support cost-effective exports to neighboring countries. In addition, Malaysia’s participation in the ASEAN Free Trade Area (AFTA) and the Regional Comprehensive Economic Partnership (RCEP) enables EV components and finished vehicles produced in Malacca to benefit from preferential tariff treatment.

For investors seeking a base to access multiple Southeast Asian markets, Malacca offers a logistics and policy edge.

Malacca’s EV momentum is real

Malacca is no longer just a historical or tourism destination. It is fast becoming a modern manufacturing hub for Malaysia’s green future. With real projects, confirmed timelines, and government incentives in place, foreign investors in the EV supply chain — from battery producers to software firms — would do well to consider Malacca as their Southeast Asian base.

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