Malaysia has set its sights on a bigger a part of the electrical car provide chain enterprise as competitors in Southeast Asia heats up, following Tesla‘s announcement of a regional headquarters in Malaysia.

“EV occurs to be our precedence,” Malaysia’s Prime Minister Anwar Ibrahim instructed CNBC’s Martin Soong in an unique interview Friday on the prime minister’s workplaces in Putrajaya, simply south of the nation’s capital Kuala Lumpur.

Tesla’s groundbreaking transfer with Malaysia is a lift to Southeast Asia’s place within the EV provide chain and the primary deal beneath the nation’s Battery Electrical Automobile International Leaders initiative.

The deal additionally represents the chance for the U.S. automaker to increase into a brand new market as progress slows in China and its different main markets.

Beneath the phrases of Tesla’s settlement with Malaysia, the EV maker will be capable of promote its Shanghai-made electrical autos immediately with none import tariffs or intermediary markup.

Tesla will even set up a regional headquarters and repair heart in Selangor, outfitted with superior diagnostic instruments and staffed with extremely educated Tesla technicians.

Tesla customers will finally have entry to a community of charging stations in main metropolitan areas within the nation, with the primary deliberate for downtown Kuala Lumpur.

There are additionally plans for Tesla to embark on EV battery manufacturing in Malaysia.

Anwar mentioned Malaysia is open to extra EV investments, together with from Chinese language automakers. Whereas Chinese language carmakers have “not been asking,” he mentioned, “the likelihood might be open.”

He mentioned there might be synergy when overseas corporations reminiscent of Tesla spend money on Malaysia, including that “it will possibly profit three or 4 native industries.”

Malaysia has a long-standing Bumiputera coverage favoring native populations, together with the bulk Malay-Muslim neighborhood and non-Malay indigenous teams.

International ventures beginning in Malaysia are required to satisfy a minimal 30% fairness possession by Bumiputeras, however Tesla is exempted from the fairness rule.

“To me, [the Tesla deal] is pretty much as good as placing a 30% fairness,” Anwar mentioned in an unique interview that might be broadcast on The CNBC Dialog later this week.

“In reality, by way of actual benefit returns to the financial system — that’s higher.”

After he was sworn in as Malaysia’s tenth prime minister final yr, Anwar pledged to struggle corruption and make “Malaysia for all Malaysians,” opening himself as much as criticism he could also be trying to dismantle Bumiputera privileges.

“It isn’t a problem … of dismantling, it is the difficulty of refocusing areas, which [are] vital,” Anwar mentioned.

“For instance, the difficulty of affirmative motion — which extends from being race-based to need-based — we can’t speak about pure meritocracy.”

Tesla’s exemption from the 30% fairness requirement just isn’t the one time that Malaysia has granted such incentives.

“This isn’t new. There was exceptions … given for digital transformation, for IT-related actions or investments,” the prime minister mentioned. “Now we have completed that previously — very selective. So the difficulty’s not simply Elon Musk, which I believe is way required on this nation to offer this confidence and the participation of our gamers.”

The Telsa announcement was preceded by Chinese language automaker Zhejiang Geely’s $10 million plan to increase its operations in Tanjong Malim in Perak state, and German chipmaker Infineon Applied sciences‘ 5 billion euros ($5.46 billion) growth of its Kulim water fabrication plant in Kedah state.

The Anwar authorities has been fast to tout the spike in overseas investments because of political stability it has delivered to the desk.

Malaysia recorded a decrease web influx of three.1 billion ringgit ($666.9 million) in overseas direct funding within the quarter that ended June 30, in comparison with the 12 billion ringgit within the previous quarter, in keeping with official knowledge.

“Incentives must be given,” Anwar mentioned, “however what’s extra vital to my thoughts, as in comparison with the fairness, is [the] coaching,” Anwar mentioned.

“It is a switch [of] expertise — is there preparedness to proceed to switch and in addition to coach our personnel and to the phrases change in accordance to our set of priorities for the current?”

Nonetheless, Anwar was hesitant to say a full electrical car meeting line is within the pipeline.

Requested if Malaysia is aiming to be the “finish sport meeting” and climb up the availability chain, he mentioned: “Nicely, it is a bit too untimely for me to commit,” he mentioned. “However what’s vital is we do have the capability to supply components of battery … required within the automobile.”

Drawing on the instance of the deepening partnership between Geely and Malaysia’s nationwide car model Proton over time, Anwar alluded to the dearth of readiness presently.

However Malaysia is greater than able to manufacture EV batteries.

“Sure, the understanding is in fact, purchase our batteries,” Anwar mentioned. “And it is cheaper is produced domestically. And it’s the benefit.”

In the meantime, neighboring Indonesia has been courting Tesla for years, however that has but to yield any tangible partnerships with Elon Musk for its electrical car ambitions.

Indonesia is an “vital neighbor to us and [we have] lots in widespread,” Anwar mentioned.

“We’re working very nicely collectively, each in authorities and personal sector. And I believe as a substitute of being in a sport of fierce competitors, we must always be capable of complement one another,” he instructed CNBC.

“That has been the spirit of my authorities’s collection of conversations with President Jokowi and adopted by means of by the trade.”