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Anwar Ibrahim's Vision for a Greener Malaysia with Tesla

Published: 8.18.2023

Prime Minister Anwar Ibrahim achieved a major victory in his pursuit of foreign investment last month by successfully persuading billionaire Elon Musk to select Malaysia as the regional hub for Tesla, the electric vehicle (EV) manufacturer. However, beyond the economic implications, Anwar's decision carries a nuanced message for the established business and political leaders of Malaysia.

Tesla's decision to establish a presence in Malaysia achieved amidst stiff competition from the Indonesian government, marks a groundbreaking development.

What stands out in the negotiations between Musk and the Anwar administration is the exemption granted to Tesla from adhering to local equity regulations. These regulations dictate that indigenous groups in the country, primarily consisting of the ethnic Malay community, must hold a minimum of 30 percent ownership in foreign businesses establishing themselves in Malaysia.

Adding to the unconventional arrangement, the sales of Tesla's imported cars—currently manufactured at its Shanghai facility—will not be subjected to Malaysia's intricate import licensing mechanism known as the Approved Permit (AP). This system oversees the importation of a wide array of commodities, spanning from essential goods like rice to more specialized products such as fireworks and vehicles.

For decades, the local equity regulations and the import licensing framework have been integral components of Malaysia's economic structure.

Anwar's move to secure Tesla's presence not only underscores his commitment to attracting foreign investment and fostering technological advancement but also serves as a strategic statement to the entrenched elites. By granting Tesla certain exceptions, Anwar signals a departure from the status quo and challenges the deeply ingrained norms of the business and political sectors.

As Tesla's entry into Malaysia unfolds against the backdrop of competition from neighboring Indonesia, it symbolizes a remarkable achievement. Nevertheless, it is the underlying message—highlighting the transformational nature of the decision and its broader implications—that will likely resonate within Malaysia's corridors of power and influence for the foreseeable future.

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