Malaysia eyes Southeast Asia’s EV hub crown after Hyundai US$500 million investment

Trade-dependent Malaysia is seeking new partners and markets as tariffs from the US-China trade wars bite

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South Korean President Yoon Suk-yeol and Malaysian Prime Minister Anwar Ibrahim (left) during their meeting in Seoul on November 25. Photo: Yonhap via Reuters

Published: 12:30pm, 26 Nov 2024

Malaysia has set its sights on becoming Southeast Asia’s hub for electric vehicle (EV) production, Prime Minister Anwar Ibrahim said as he welcomed a US$500 million investment by South Korean car giant Hyundai Motor to build a second assembly plant in the region.

Trade-reliant Malaysia has been seeking new investors and markets over the past year as widening tariffs tied to the US-China trade and tech wars rattled its solar industry and raised concerns over its crucial semiconductor sector.

Those fears have been sharpened by the re-election of Donald Trump who has threatened blanket tariffs on imports to the US, especially on strategic sectors such as renewables and semiconductors.

In October, Malaysia joined Thailand, Indonesia and Vietnam as new partner countries of the Brics bloc led by China, Russia and India.

Anwar’s government announced on Monday that Hyundai Motor will invest 2.16 billion ringgit (US$500 million) in its first Malaysian plant in Kulim in northern Kedah state.

The deal, announced during Anwar’s three-day official visit to South Korea, did not give a timeline for when operations will start at the plant, which will assemble up to seven different car models.