P.Up Power-Up Malaysia chief marketing officer Nizam Arifin says Malaysia can leverage its strong automotive manufacturing base and strategic location within Asean to become a hub for EV production and export.
MALAYSIA’S automotive landscape is at a pivotal juncture as it transitions towards electric vehicles (EVs).
The global push for cleaner, more sustainable transportation solutions is echoing strongly within our borders. However, the journey from interest to widespread adoption is fraught with challenges and opportunities, especially within the domestic automotive industry and its value chain.
Last year was remarkable for the EV industry in Malaysia. We saw the population of battery electric vehicles (BEVs) surge from 3,701 at the end of 2022 to a projected 14,800 by the close of 2023. This 300% increase signifies a robust response to the government’s EV-friendly policies, which have played a crucial role in driving this growth.
Notable entries into the Malaysian market include models from BYD, such as the Atto 3 and Dolphin, and Tesla’s competitively priced Model 3 and Model Y. Additionally, brands like Neta and Ora are making their presence felt alongside established names such as BMW, Volvo, and Mercedes-Benz.
These developments underscore a growing diversity in EV offerings, catering to various consumer preferences and price points.
Despite these advancements, the picture is less rosy for two-wheel EVs, which only saw a 23% increase, projecting a total of 4,000 by the end of 2023. The recently announced Malaysia Electric Motorcycle Use Promotion Scheme is expected to address this gap and stimulate demand in the coming years.
Government incentives have been pivotal in supporting the EV market in Malaysia. These incentives include tax exemptions, rebates and subsidies aimed at reducing the cost burden on consumers and making EVs more accessible.
Without these financial supports, the high upfront cost of EVs, often priced above RM100,000 for foreign models, could be a significant barrier to adoption.
However, the sustainability of these incentives is a matter of concern. As the market matures, there will be a need to gradually phase out subsidies without destabilising the market. This delicate balance requires careful planning and policy adjustments to ensure a smooth transition.
A critical aspect of EV adoption is the availability of robust charging infrastructure. According to MEVNet, Malaysia currently has 1,434 EV Charging Bays (EVCBs), with 317 of these being DC rapid charging bays.
This represents a 60% increase from the previous year, indicating substantial progress. However, the distribution of these charging stations is uneven, with a concentration along the North-South Expressway and minimal coverage along the East Coast Expressway.
To support the growing number of EVs, especially in less accessible areas, addressing these “charging deserts” is imperative. The government and private sector must collaborate to expand the network, ensuring that EV owners have convenient access to charging facilities regardless of their location.
The readiness of Malaysia’s domestic automotive industry to pivot towards EVs is mixed. Local manufacturers face significant challenges in terms of technology transfer, production capabilities and market competition. The transition requires substantial investment in R&D, retooling of manufacturing processes, and upskilling of the workforce.
However, there are also opportunities. Malaysia can leverage its strong automotive manufacturing base and strategic location within Asean to become a hub for EV production and export. Collaborations with foreign companies, investments in local startups and public-private partnerships can accelerate this transition.
The domestic value chain also needs to adapt. Suppliers of components such as batteries, electric motors and power electronics must scale up their operations and align with global standards.
This transformation will require coordinated efforts across the entire value chain, from raw material procurement to end-of-life recycling.
Looking ahead
For Malaysia to sustain and build upon its current momentum in the EV sector, several strategies should be considered:
Enhanced policy framework: Continuous review and enhancement of EV-related policies to ensure they remain effective and relevant. This includes setting long-term goals for EV adoption and emissions reduction.
Investment in R&D: Increased funding for research and development to drive innovation in EV technologies and support the domestic industry in staying competitive.
Public awareness campaigns: Educating the public on the benefits of EVs, not just in terms of cost savings but also environmental impact and technological advancements.
Infrastructure expansion: Accelerating the development of charging infrastructure, particularly in underserved areas, to boost consumer confidence and convenience.
Collaboration and partnerships: Fostering collaborations between local companies and international EV leaders to facilitate knowledge transfer, joint ventures and co-development projects.
Malaysia’s significant growth in EV numbers in 2023 demonstrates strong potential, bolstered by supportive government policies. However, sustaining this growth will depend on addressing infrastructure gaps, enhancing industry readiness and maintaining a balanced approach to incentives.
By embracing these strategies, Malaysia can not only achieve its domestic EV goals but also position itself as a regional leader in the green automotive revolution.
The future of EVs in Malaysia looks bright, and with the right moves, we can drive towards a more sustainable and technologically advanced transportation ecosystem.
This article first appeared in Star Biz7 weekly edition.
