Malaysia’s Green Energy Surge: Eve Energy’s $1.2 Billion Battery Hub to Power Regional Storage Boom

KULIM, Kedah, Malaysia—July 1, 2025— Malaysia’s ambition to become a leading green energy hub in Southeast Asia has received a monumental boost with Chinese battery giant Eve Energy’s announcement of a $1.2 billion investment in a new energy storage battery project. This significant expansion of its existing Kulim facility in Kedah state underscores Malaysia’s growing strategic importance in the global shift towards sustainable energy and is set to power the regional demand for advanced energy storage solutions.

The colossal investment, officially earmarked for “no more than RMB 8.65 billion” (approximately $1.2 billion USD), solidifies Eve Energy’s commitment to Malaysia. It marks a critical step in the company’s broader strategy for overseas expansion, aiming to meet the burgeoning global demand for energy storage products while simultaneously navigating increasing international trade frictions by diversifying its production footprint.

Kulim: A Fast-Emerging Battery Powerhouse

The project is slated for Kulim City, Kedah State, where Eve Energy already operates its first overseas plant, which remarkably began construction in August 2023 and commenced operations in February 2025. This initial facility specializes in producing 21700 cylindrical batteries primarily for power tools and electric two-wheelers, boasting an annual capacity of 680 million units.

The new $1.2 billion investment, however, represents a strategic pivot towards higher-value, larger-scale applications. It focuses on the production of lithium iron phosphate (LFP) cells for energy storage systems (ESS), with a designed capacity of an impressive 10-15 GWh/year. This move positions Kulim directly at the heart of the burgeoning global ESS market, where Eve Energy already ranks as the world’s second-largest energy storage battery supplier in 2024.

Construction for this ambitious expansion is projected to take no more than 2.5 years, a testament to the rapid pace of development in the battery sector and Malaysia’s efficient investment facilitation.

Powering Malaysia’s Green Transition and Beyond

Eve Energy’s substantial investment aligns perfectly with Malaysia’s aggressive national green energy agenda. The nation has set ambitious targets of achieving 31% renewable energy capacity by 2025 and 40% by 2035. Battery Energy Storage Systems (BESS) are critical enablers for integrating intermittent renewable sources like solar and wind into the grid, ensuring stability and reliability.

The Malaysian Investment Development Authority (MIDA) has actively courted such high-value manufacturing, recognizing its role in strengthening national energy security and driving environmental sustainability. Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid, CEO of MIDA, previously highlighted that Eve Energy’s expansion is expected to create over 1,000 jobs, fostering a robust and technologically advanced local supply chain. This influx of international expertise is poised to empower Malaysian enterprises and propel the local industry forward.

“As we accelerate towards a cleaner and more energy-secure future, strategic investments like this play a vital role in positioning Malaysia as a regional leader in EV and battery technology,” said Investment, Trade, and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz. “What is equally important is how this helps foster a more robust local supply chain and creates high-value job opportunities, paving the way for Malaysia to lead in Southeast Asia’s green economy.”

Strategic Play in a Shifting Global Landscape

Beyond Malaysia’s domestic green energy goals, Eve Energy’s investment also reflects a broader strategic calculation in the volatile global battery market. The company explicitly cited “escalating international trade friction” as a key factor in its decision to expand production overseas. By establishing significant manufacturing capabilities outside China, Eve Energy aims to mitigate risks, diversify its supply chain, and enhance its access to international markets, including Europe and other parts of Asia where demand for energy storage is rapidly accelerating.

Southeast Asia, with its burgeoning economies and increasing energy demand (expected to grow by 7.3% annually by 2030), presents a fertile ground for energy storage solutions. The ASEAN energy storage market is projected to reach USD 4.92 billion by 2030, with countries like the Philippines and Vietnam actively integrating renewables and seeking grid modernization. Malaysia’s stable regulatory framework, improving logistics, and proactive investment policies make it an attractive production base within this dynamic region.

The Road Ahead: Approvals and Impact

While the announcement is a landmark moment, the project remains subject to final approval from regulatory authorities in both China and Malaysia. Upon securing these approvals, the construction is expected to proceed swiftly, further integrating Malaysia into the global battery supply chain.

Eve Energy’s $1.2 billion bet on Malaysia represents more than just a factory expansion; it’s a strategic maneuver poised to significantly enhance Malaysia’s role in the global green energy surge. By powering the next generation of energy storage systems, Kulim is set to become a vital hub, driving not only Malaysia’s own renewable energy transition but also contributing substantially to the wider region’s sustainable future.

What are your thoughts on Eve Energy’s massive investment in Malaysia? How do you think this will impact Malaysia’s position in the global green energy landscape? Share your insights in the comments below!