"Virtually No Suppliers" — Xpeng Is Struggling To Find Local Parts To Build Its EVs In Malaysia

We all see new Chinese electric vehicle (EV) brands launching in Malaysia practically every single month. Usually, the press releases are filled with nothing but shiny hype, futuristic tech, and massive promises.

But recently, the Vice President of Finance for smart EV giant Xpeng, James Wu, decided to keep it 100% real about the massive, hidden struggle happening behind the scenes of Malaysia's automotive industry.

While Xpeng has officially locked in plans to start local assembly (CKD) operations right here in Malaysia by the second half of this year, they've hit a major roadblock.

And it's a problem that affects the entire nation's dream of becoming an EV powerhouse: Malaysia has virtually zero local suppliers for advanced EV parts.

Here is the breakdown of why building a high-tech EV in Malaysia is proving to be way harder than building a traditional petrol car, and what Xpeng plans to do about it:

1. The EV Catch-22: "Virtually No Suppliers" For Key Tech

To get tax incentives and keep car prices low, car brands are required by the government to source a certain percentage of their parts locally (known as localization). But James Wu point-blank admitted that there are “virtually no suppliers” of battery and Advanced Driver Assistance Systems (ADAS) components in Malaysia. Since batteries and smart sensors make up the absolute lion's share of an Xpeng model, they have almost no local options to buy from.

Read: Xpeng Set to Localise Its Supply Chain Outside China

2. Why EVs Face A Uphill Battle Compared To Petrol Cars

You'd think fewer parts would make a car easier to build, right? Wrong! Traditional internal combustion engine (ICE) petrol cars are made of thousands of tiny, mechanical pieces, hoses, brackets, exhaust pipes, which Malaysia's massive vendor network has spent decades mastering. 

However, EVs are made from significantly fewer components overall. Because the parts list is so short, if you can’t source the big things (like the battery or the self-driving chips) locally, it is mathematically a nightmare to reach the government's target percentage for local parts.

3. The Melaka Connection: EPMB Steps Up To The Plate

Despite this massive supply chain hurdle, Xpeng isn't throwing in the towel. They are officially forging ahead with their CKD timeline for the second half of this year by partnering with EP Manufacturing Berhad (EPMB). 

The Melaka-based manufacturing outfit is going to spearhead contract manufacturing for the highly anticipated Xpeng G6 SUV and the ultra-luxurious X9 MPV on local soil. The mission now? Heavily focusing on developing and localizing a brand-new EV supply chain right here in our backyard.

4. The Silver Lining: True Self-Driving Is Still Coming In 2 Years!

While the supply chain gets sorted out, Xpeng is throwing its full weight into bringing mind-boggling autonomous tech to mainstream Malaysian drivers. Wu confirmed that they aim to launch their full self-driving software, XNGP (Xpeng Navigation Guided Pilot), in Malaysia within the next two years (pending regulatory approval). 

The coolest part? It uses advanced VLA 2.0 artificial intelligence, meaning it doesn't need any local on-road AI training data. The second the car hits Malaysian roads, the AI can theoretically navigate our chaotic lanes flawlessly! 

A necessary wake-up call for Malaysia

Xpeng’s brutal honesty is exactly the reality check our local automotive industry needs. We can’t just be a country that imports and drives shiny EVs; we actually need to build the industrial ecosystem to manufacture them.

By setting up shop in Melaka and forcing the issue, Xpeng and EPMB might just be the catalyst that forces local vendors to start manufacturing batteries and advanced driving sensors. It’s going to be a rocky road, but if they pull it off, Malaysia's tech ecosystem will change forever!

Read: Xpeng Sets Big 2026 Targets Amid New EVs, AI Plans

Read: XPeng Names EPMB as Assembly Partner in Malaysia