Electric vehicles (or EVs), are the buzzword the world over. Locally, a growing number of listed companies have announced plans to get involved in the sector. Some are looking at building charging points, while others intend to distribute imported EVs in the Malaysian market.
There are also listed companies indirectly involved in the sector via manufacturing components for EVs.
Globally and at home, the push for EVs is led by governments providing support in the form of policies based on the idea of reducing carbon emissions and increasing the use of renewable energy.
In Malaysia, there are import and excise duty exemptions for EVs. The exemptions will last until Dec 31, 2025 for locally assembled models, but only until the end of 2023 for completely built-up (CBU) vehicles. In the recently tabled Budget 2023, there was a proposal to extend the exemptions for CBUs by another year.
Thailand has a policy to move 30% of total automotive production to EVs by 2030, while the Indonesian government has set a goal for EVs to make up 20% of all domestic cars manufactured by 2025. Singapore is targeting to cease new diesel car registrations from 2025 and requiring all new car and taxi registrations to be of cleaner-energy models from 2030.
The take-up rate of EVs in Malaysia remains low. In 2021, it was reported that only 274 EVs were sold from a grand total of 508,911 units, which is just 0.05%. From January to May this year, 390 EV units were sold in Malaysia, with the percentage of EV to internal combustion engine or ICE cars increasing to 0.17%.
Globally, sales of EVs doubled in 2021 from 2020 to a new record of 6.6 million, a steep rise from the 120,000 units sold in 2012. In the first quarter of this year, two million EVs were sold, up 75% from the same period in 2021. China, the biggest maker and user of EVs, saw EV sales hitting 3.7 million units from January to August this year. In comparison, in the United States about 520,000 EVs were sold this year up to September. EVs made up 6.1% of total car sales in the American market in the third quarter of 2022 as compared to only 2.2% in the corresponding quarter of 2020.
Thailand recorded a 223% increase in EV sales for the first nine months of 2022 to 13,298 units, compared to the period of January to September 2021. In China, the motivation to move to EVs comes from its intention to cut its dependence on oil, as the country imports more oil than it exports. That and coupled with the fact that it has an abundance of the natural materials used to produce EV batteries.
Since 2009, US$14.8bil (100 billion yuan or RM70.2bil) in subsidies were provided to EV consumers in China. To help EV sales rebound in 2020 in the midst of lockdowns, the central government extended incentives as well as prolonged the purchase-tax exemptions of EVs throughout 2022.
For Malaysia, industry players say that a specific roadmap from the government is essential.
Challenges related to the charging of EVs remain a problem. There are not enough charging stations and it takes too long to charge EVs.
Home charging also requires homes to have three phased electricity wiring. Older apartment blocks do not have charging facilities, unlike newer developments.
Tenaga Nasional Bhd (TNB) has pledged to invest RM90mil to increase the number of charging points for EVs on expressways. TNB says the rationale behind this investment is to solve the challenges of charging infrastructure. But is this enough? Of course not, but even this will take some time. Meanwhile, we will watch others in the region march on with EV plans and a roadmap.
Reference:
Jumping on the EV bandwagon, Keith Hiew, The Star, 5 Nov 2022
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