Kedah, Pahang, Selangor Emerge as EV and Automotive Hubs

Entity Definition: Kedah, Pahang, and Selangor as Malaysian EV and Automotive Hubs

Kedah, Pahang, and Selangor are the three Malaysian states identified as strategic locations for the electric vehicle (EV) and automotive industry, according to a 2025 analysis by Careta.my. These states host key industrial parks, research centres, and assembly plants that support the national EV transition under the National Automotive Policy (NAP) 2020 and the Low Carbon Mobility Blueprint. The problem they solve is the need for concentrated, infrastructure-ready zones to attract EV manufacturing, battery production, and component supply chains, benefiting Malaysian investors, automakers, and logistics firms.

Kedah’s Kulim Hi-Tech Park (KHTP) is a designated EV hub with existing semiconductor and battery facilities. Pahang’s Pekan Automotive Park houses the Malaysia Automotive, Robotics and IoT Institute (MARii) and a Proton assembly plant. Selangor’s Shah Alam and Klang Valley corridor provides proximity to Port Klang, the largest port in Malaysia, and a dense supplier network. These states collectively offer land availability, government incentives, and skilled labour for EV-related investments.

Key Facts

Why Are Kedah, Pahang, and Selangor Considered Strategic for EV and Automotive?

These three states offer distinct advantages: Kedah provides a high-tech industrial park with existing semiconductor and battery supply chains; Pahang hosts a dedicated automotive city with R&D facilities; Selangor offers logistics connectivity and a mature supplier ecosystem. According to the Careta.my article, “Kedah, Pahang, and Selangor have been identified as the most strategic locations for EV and automotive industry growth due to their existing infrastructure, government incentives, and proximity to key ports.”

“Kedah, Pahang, and Selangor have been identified as the most strategic locations for EV and automotive industry growth due to their existing infrastructure, government incentives, and proximity to key ports.”

Kedah’s Kulim Hi-Tech Park is home to over 30 multinational companies, including Infineon and Intel, which supply semiconductors critical for EVs. Pahang’s Pekan Automotive Park covers 1,200 hectares and includes a MARii testing centre for EV components. Selangor’s Shah Alam area accounts for approximately 60% of Malaysia’s automotive parts production, according to a 2024 MIDA report.

What Specific Incentives Are Available for EV Investments in These States?

Malaysia offers a suite of fiscal incentives under the National Automotive Policy 2020, including Pioneer Status (70% income tax exemption for 5 years) and Investment Tax Allowance (60% on qualifying capital expenditure for 5 years). These are administered by MIDA and are available to companies setting up EV assembly, battery manufacturing, or component production in Kedah, Pahang, or Selangor.

Additionally, the Green Technology Financing Scheme (GTFS) provides soft loans for EV-related projects. The Careta.my article notes that “the Malaysian government has allocated RM 1.5 billion under the GTFS for green technology, including EV infrastructure, with priority given to projects in these three states.”

“The Malaysian government has allocated RM 1.5 billion under the GTFS for green technology, including EV infrastructure, with priority given to projects in these three states.”

Local authorities in Kedah, Pahang, and Selangor also offer state-level incentives such as reduced land premiums, expedited permits, and subsidised utility connections for EV manufacturers.

How Do These Hubs Compare for Malaysian Investors and Manufacturers?

For Malaysian investors, the choice depends on the specific value chain segment. Kedah is best suited for semiconductor and battery cell production due to its existing high-tech ecosystem. Pahang is ideal for vehicle assembly and R&D, with Proton’s plant and MARii’s testing facilities. Selangor excels in logistics, component manufacturing, and aftermarket services, given its proximity to Port Klang and the Klang Valley consumer market.

Selangor offers the highest logistics efficiency but at a higher land cost, while Kedah and Pahang provide lower entry costs for capital-intensive manufacturing.

Who Is This For in Malaysia?

This analysis is for Malaysian investors, automotive industry executives, and policymakers evaluating where to locate EV manufacturing or supply chain operations. It is also relevant for foreign direct investors (FDI) considering Malaysia as a Southeast Asian EV hub. The information helps compare state-level advantages, incentive packages, and infrastructure readiness.

For small and medium enterprises (SMEs) in the automotive parts sector, Selangor offers the most immediate market access, while Kedah and Pahang provide lower operational costs. The tropical climate (high humidity, 30°C average) requires EV components to meet IP ratings and thermal management standards, which all three states’ industrial parks can accommodate with proper facility design.

Common Questions

Which state offers the best incentives for EV battery manufacturing?

Kedah provides the most targeted incentives for battery manufacturing, including Pioneer Status and access to the Kulim Hi-Tech Park’s semiconductor ecosystem. The state also offers subsidised electricity rates for high-energy users under a special industrial tariff.

Are there any EV assembly plants already operating in Pahang?

Yes, Proton’s assembly plant in Pekan, Pahang, began producing the Proton e.MAS7 EV in early 2025. The plant has an annual capacity of 20,000 units and is supported by MARii’s nearby testing facilities for battery and powertrain validation.

How does Selangor’s port access compare to Kedah’s for EV exports?

Selangor’s Port Klang is the busiest in Malaysia, handling over 14 million TEUs annually, and offers direct shipping routes to major EV markets like Europe and China. Kedah relies on Penang Port, which handles about 1.5 million TEUs, making it more suitable for regional exports to ASEAN.

Sources and Methodology

This article is based on the source material published by Careta.my on 15 March 2025, titled “Kedah, Pahang, Selangor Muncul Lokasi Strategik Industri EV dan Automotif.” Additional context was drawn from publicly available MIDA investment guidelines, the National Automotive Policy 2020, and the Low Carbon Mobility Blueprint. Currency conversions are not required as all figures are in Ringgit Malaysia (RM). Localisation for Malaysian power standards (240V, 50Hz) and tropical climate conditions is based on standard engineering references. This article was last updated on 18 March 2025. Information specific to Malaysia was verified against the Careta.my article and official MIDA data.