It has been reported that the electric vehicle manufacturer, Tesla has cancelled its plans of establishing manufacturing plants in Southeast Asia, which also includes Malaysia.
This is reported by Thailand newspaper, The Nation when a source from the Thai government stated that Tesla is currently only focusing on charging stations, with factory plans suspended globally.
“They are not proceeding in Malaysia, Indonesia or anywhere else except for China, America and Germany,” said the source.
It is said that the decision is part of Tesla’s broader withdrawal of investments across Asia and beyond, as the company has reportedly disbanded the executive team that was leading its Southeast Asian expansion efforts last year.
The report also mentioned that Tesla has halted plans for a gigafactory in Mexico, citing economic concerns and potential political impacts from the upcoming US presidential election, specifically regarding US presidential candidate Donald Trump’s pledge to impose a 100% tariff on Mexico-made vehicles.
The gigafactory near Monterrey in Nuevo Leon was first announced in March last year and was expected to start operating in the first quarter of 2025. However, the project has faced multiple delays and uncertainty.
By September 2023, some of Tesla’s suppliers had slowed their own plans to build new manufacturing facilities in Mexico, worried they wouldn’t be completed on time. In October, Tesla confirmed it had paused the project due to economic concerns
Disappointing Reneged Investments
In November last year, Thai Prime Minister Srettha Thavisin announced that Tesla was poised to make Thailand a hub of its EV manufacturing, which followed after several meetings with Tesla executives, both in the US and Thailand.
At the time, Srettha also mentioned that Tesla was surveying three potential factory sites in Thailand and was expected to announce an investment of over US$5 billion in the first quarter of this year.
As for Malaysia, under the terms of an agreement signed in February 2023, Tesla was said to be able to sell its vehicles assembled abroad in Malaysia without any import tariffs. The company was also granted exemption from having a local partner as well as the minimum 30% Bumiputera equity rule. Tesla began selling its cars in Malaysia months later.
In fact, Prime Minister Datuk Seri Anwar Ibrahim announced in July 2023 that Tesla would set up its Malaysian headquarters and service centres in Selangor which would potentially create ‘tens of thousands of high-value jobs’ in the country.
Late last year, Tesla opened its Malaysian head office in Cyberjaya, with plans to introduce a minimum of 50 EV charging stations nationwide.
Anwar even courted Tesla’s billionaire owner Elon Musk for further investments from Tesla. Musk’s other business Starlink was also allowed to operate in the country with full foreign ownership after the government waived the ceiling of 49%.
However, the Ministry of Investment, Trade and Industry (MITI) has advised that the news report did not cite Tesla directly, hence questions regarding the actual expansion plans of the company should be ignored until Tesla itself has issued an official statement on the matter.
“Please take note that this report is not an official statement from Tesla but quotes an unnamed source.
“Confirmation on the report would have to come from Tesla,” the MITI source said, who added that the move is unrelated to MITI’s initiatives on industrial reforms and improved investment landscape.
Last month, Tesla shares tumbled 12% after posting its lowest quarterly profit margin in five years, with earnings per share missing estimates for the fourth consecutive quarter.
It was the biggest one-day percentage drop in Tesla’s stock since 2020, and it left Tesla’s market capitalisation at just under US$700 billion, down from over US$1 trillion in 2021.
