Exclusive | Malaysia must tread fine line in EV push amid US-China rivalry, trade tensions: minister

Trade chief Tengku Zafrul Aziz says Malaysia must navigate a balancing act to ensure its EV market is not overtaken by Chinese imports

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Tengku Zafrul Aziz, Malaysia’s trade minister. Photo: Eugene Lee

Published: 1:00pm, 21 Sep 2024Updated: 3:05pm, 25 Sep 2024

Malaysia must navigate global trade tensions carefully as it seeks to sustain competition in its electric-vehicle sector through incentives for local manufacturers and lure investment, according to its Investment, Trade and Industry Minister Tengku Zafrul Aziz.

In an exclusive interview with This Week in Asia, Zafrul warned that if tensions between the United States and China came to a head “in terms of a war on tech supply”, the “whole world”, not just Malaysia or Asean, would be affected.

Malaysia has emerged as a beneficiary of superpower rivalry, attracting investments from tech companies and carmakers keen to diversify their supply chains and mitigate geopolitical risks.

But it has not all been smooth sailing. Solar companies in Malaysia may face tariffs as part of Washington’s anti-China trade policies, while its EV sector must balance growth with not being overtaken by Chinese imports.

“That’s why for Malaysia, we have to keep a very open position, and continuously engage both countries,” Zafrul said.

Charging stations for electric vehicles in Selangor, Malaysia. Anwar Ibrahim’s administration is aiming for 15 per cent of all vehicles on Malaysia’s roads to be EVs by 2030. Photo: Bloomberg

Chinese EV makers are expected to expand into Southeast Asian markets after being frozen out by tariffs in the US and Europe. Countries like Brazil and Turkey have also implemented duties to address what they see as a flood of Chinese imports.