“Recent developments in the Malaysian EV sector are significantly shaping its growth prospects," says Lau.
PETALING JAYA: The electric vehicle (EV) sector has a bright outlook and is expected to experience strong growth following the entry of Tesla Inc and government incentives to promote it.
However, according to analysts, the move towards EVs is likely to happen sooner rather than later if the carmakers are able to offer products at a more “competitive” price point.
“It is likely the luxury marques will have to bring their prices down to match the lower selling prices moving forward especially with Tesla’s Model Y now being priced lower,” Socio Economic Research Centre executive director Lee Heng Guie told StarBiz.
“With the lower prices, the consumers will be biggest beneficiary but it would be good if the government could work with Tesla to further develop the local EV supply chain for longer term sustainability,” he added.
Electric car giant Tesla will be setting up its Malaysia head office in Selangor this year.
In a virtual meeting with Prime Minister Datuk Seri Anwar Ibrahim last week, Tesla chief executive officer Elon Musk had expressed interest in setting a Tesla’s office as well service centres in the state.
“When Tesla went into China, it made a lot of inroads there and then it sparked a price war among carmakers in that country.
“Hopefully, with the strong demand and the good road infrastructure here, Tesla, can consider establishing a plant in Malaysia eventually,” Lee said.
With the recent developments, Lee expects the internal combustion engine vehicle replacement by EVs to happen “very quickly”.
Although Tesla’s decision to invest in Malaysia is set to increase competition among automakers, it is unclear how the local supply chain would benefit from this as EV makers are mainly importing completely built up vehicles for the domestic market.
Separately, the latest development had also reinvigorated interest in technology stocks on the Bursa Malaysia.
Major outsourced technology firms in the counry such as Inari Amertron Bhd
had seen gains of 11.5%, Malaysian Pacific Industries Bhd added 6.68% and Unisem (M) Bhd climbed 12.82%.
The companies have a growing exposure to the EV space.
Rakuten Trade chief executive officer Kazumasa Mise said all eyes are on the EV sector driven especially by the ongoing developments locally and internationally.
“We have observed heightened trading activity in counters such as EP Manufacturing Bhd (EPMB) after the company secured approval for EV manufacturing licence from the Investment, Trade and Industry Ministry,” said Mise. “Given the current news and trends, it comes as no surprise that our clients have been actively trading in the EV theme. “Investing in EV shares is seen as supporting sustainable investing as it promotes cleaner transportation alternatives and reduces dependence on fossil fuels,” he added.
Rakuten Trade head of equity sales Vincent Lau said the EV sector has a bright outlook and is expected to experience strong growth from the continued government incentives and increasing environmental, social and governance awareness.
“Recent developments in the Malaysian EV sector are significantly shaping its growth prospects.
“Notably, the approval given to Tesla to bring in and sell its cars without the need for Approved Permits highlights the country’s attractiveness,” he said.
Lau said there may be opportunities in other companies involved in the EV space.
“They included BYD Co Ltd’s partnership with Sime Darby Bhd while EPMB’s attainment of approval to manufacture EV vehicles is a monumental achievement, serving as a game changer for both the company and the EV landscape in Malaysia,” Lau said.
“The EV space is seeing more installed chargers by major players including Petronas Gentari, Tenaga Nasional Bhd with locally listed companies including Yinson Holdings Bhd, ACO Group Bhd, Amtel Holdings Bhd, Pestech International Bhd helping to speed up the adoption and the ecosystem needed for EVs in the country,” he added.
Although EVs are experiencing strong growth, Lau said the current numbers remained small when compared with the total industry volume.
“However, it’s noteworthy that local car manufacturers are also actively involved in distributing EVs.
“In 2022, EV sales totalled 2,631 units,” Lau said.
Fitch Solutions has forecast an increase in EV sales to reach 5,850 units in 2023.
However, Teslarati reported on Tuesday that Tesla Malaysia had secured 10,000 Model Y orders just four days after its launch which is near double of Fitch Solution’s EV sales forecast for the entire year.
