Timely jolt needed for EV industry

NST Sat, Jan 15, 2022 09:52am - 3 days View Original

Industry observers says government should regularly update the country's policy - the Low Carbon Mobility Blueprint and the National Automotive Policy overtime, rather than solely relying on the short-term incentives announced in the 2022 Budget. Pix by

KUALA LUMPUR: Higher prices, lack of charging infrastructure, and unclear policy are seen as slowing the electric vehicle (EV) adoption rate in Malaysia.

Industry observers said government should regularly update the country's policy - the Low Carbon Mobility Blueprint and the National Automotive Policy overtime, rather than solely relying on the short-term incentives announced in the 2022 Budget.

Automotive experts also said the government must introduce long-term measures with more transparent policies to facilitate manufacturers and distributors to grow the EV-related industry.

The Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad said a large scale and volume would be required for the government to entice consumers to buy EVs and propel the segment to greater heights.

"EVs are still priced at higher-end level, from RM150,000 onwards. So it is not affordable for the B4 group or even mid-M40 level, despite the incentive packages given by the government," she told the New Straits Times (NST) when contacted recently.

She was pessimistic about EV penetration in the country with higher ownership and maintenance costs, which may not be an attractive bargain to transition into EV.

The government had announced in 2022 Budget with the incentives provided for EV ownership to support the development and the EV ecosystem while allowing more new green investment and creating high-skilled job opportunities in Malaysia.

The government had planned to fully exempt import and excise duties as well as sales tax for EVs with a road tax exemption of up to 100 per cent, individual income tax relief of up to RM2,500 on the cost of purchase, installation, rent, hire purchase as well as subscription fees for EV charging facilities.

Aishah said the lack of EV charging infrastructure could also prevent the country from expediting the adoption rate and instilling confidence among locals.

"We have a limited number of charging infrastructure and very few fast-charging stations in the country. Most charging facilities are located along the west coast highways but not widely available on the east coast (Terengganu, Kelantan, Pahang) as well as Sabah and Sarawak."

Malaysia currently has 4,000 EV charging stations with standard specification chargers that can fully recharge EVs between seven and eight hours.

According to MAA's latest data, as of December 31, 2021, Malaysia has about 274 EVs, fully battery-powered electric vehicles (BEVs).

Nonetheless, she said superchargers should also be widely installed across the country as this charging infrastructure may take less than four hours to charge an EV fully.

"We (MAA) had previously proposed to the government to install EV charging infrastructure in new development, especially for the high-rise building (commercial and residential).

Aishah said the high cost of EV's batteries and safety concerns could also be another "stumbling block" for the consumers to drive an EV.

"Hence, the EV-related sector and its supply chain should consider the affordability issue and must rectify the situation or the misconception of owning an EV.

Aishah said the government should also consider extending the current EVs incentive packages to allow the local manufacturers to garner sufficient volume to roll out the locally assembled or produced EVs models in Malaysia.

"We have to look at other alternatives on how the government can better offer or enhance its current EV incentives to entice consumers to buy EVs.

"The government must be sympathetic and approve any suggestions or ideas for the betterment of EVs adoption in the country," she added.

Maybank Investment Bank Bhd (Maybank IB) analyst Liaw Thong Jung said extended incentives for EVs could potentially allow manufacturers to consider huge investment in Malaysia, provided by volume and scale of EVs acceptance.

"The current short-incentive between two and four years may not be enough for manufacturers to offer complete-knock down (CKD) EV models," he told the NST.

Liaw said the automotive policy roadmap should be ironed out and regularly updated to show the government's seriousness in accelerating its effort to capture a higher adoption rate of zero-emission vehicles.

"We need a sound EV policy to make it sustainable in the long run. Therefore, an improvement of policy should be in progress with the government's updated policy to encourage electrification.

"The government should be progressive in offering more incentives to accelerate EVs adoption," he said.

He concurred that the charging infrastructure must be widely available, and this could be expedited through the public-private partnership to install EV chargers.

Meanwhile, he said the pricing of EVs were not as competitive as internal combustion engine (ICE) - conventional vehicles, citing that subsidy and incentives would be much needed to drive EVs in Malaysia.

For example, he said the government can offer more rebates to all consumers and charge installers to drive more infrastructure.

RHB Investment Bank Bhd (RHB Research) analyst Eddy Do Wey Qing said BEV offerings in the market were still limited to a handful of models.

"As the tax-free period only lasts two years for completely built-up (CBU) EVs and four years for CKD EVs, distributors will need to start fast-forwarding their plans and timelines to bring in new BEV products to take advantage of the exemptions and not lose market share," he said.

Do said BEVs are still likely to be priced higher than the ICE models, especially the popular B-segment vehicles, despite the lowered price through the incentives packages.

"Hence, with the current incentives, BEVs still does not cater to most car buyers. Currently, Sime Darby Bhd still offers the widest selection of EVs in Malaysia, and a solid pipeline of BEV launches through the brands it represents – the latest Hyundai Kona is set to be the cheapest BEV in Malaysia at about RM150,000, which was made possible via these incentives."

He said UMW Toyota Motor Sdn Bhd also planned to introduce its first BEV in 2022 and another in the following year.

Do concur there was a need to roll out charging infrastructure in public areas and update local planning regulations to compel developers to factor in charging infrastructure into future residential and commercial developments.

"Charging mostly happens in the office or at home, and at the moment, the number of charging facilities remain limited and may not necessarily be available to apartment dwellers," he added.

The content is a snapshot from Publisher. Refer to the original content for accurate info. Contact us for any changes.

Related Stocks

SIME 2.250


Login to comment.