Strong incentive policies required 
for EVs to take off in Malaysia

By SHAZNI ONG / Pic By ISMAIL CHE RUS

A strong incentive policy is required to spur the growth of the electrical vehicle (EV) segment in Malaysia.

Frost & Sullivan associate partner and senior VP of mobility Vivek Vaidya (picture) said strong incentives for manufacturers, infrastructure developers, distributors and customers would help in encouraging the usage of EVs.

“Unless there is a strong policy coming up to focus on EVs, we would not see a major uptake of EVs in Malaysia.

“Currently, what we are waiting for is the National Automotive Policy (NAP) to announce or mention anything about some policy initiative on EVs. We are looking at the next NAP to see if there is any certain indication like this,” he said at a media briefing in Kuala Lumpur yesterday.

Vivek said the EV segment is currently placed within the same policy bracket as energy- efficient vehicles.

He said if the NAP outlines any policy that specifically defines EV, the segment could certainly grow.

“If the government wants to pursue EVs — or biofuel, compressed natural gas (CNG) or liquefied petroleum gas (LPG) vehicles — there needs to be a focus on an incentive plan or an ecosystem creation to make this product successful,” Vivek said.

He said there has been a mixed uptake on the acceptance of the EV market in Malaysia.

According to a customer research conducted by Frost & Sullivan, EVs — ie battery EVs — are not very popular in Malaysia.

However, Vivek said the understanding among customers in the market is quite good. 

“About 37% of customers said they are willing to consider EVs as one of their next choice of products.

“About 50% of customers also expect EVs to be more expensive than conventional cars — which showed that they understand what EVs are,” he said.

Vivek added that the upcoming new national car could possibly feature lower emission and multiple technologies.

“From the trends that we are seeing in both Malaysia and Indonesia, consumers want to use locally produced fuels such as biodiesel. They want to promote that, as there is palm oil production.

“Prices are low. So, they want to use palm oil to reduce the oil deficit,” he said, adding that there are also talks of using CNG and LPG.

Vivek said the new national car project can accommodate and incorporate anything between biofuels, CNG and LPG into EVs, as well as multiple technologies.

Meanwhile, Frost & Sullivan forecast the country’s total industry volume to reach some 609,700 units this year, a 1.4% increase compared to last year’s figure of 601,300.

Vivek said the growth is in line with the country’s economy — which is expected to continue recording a positive growth this year, driving consumers’ confidence throughout the year.

“Key factors likely to aid growth in the Malaysian automotive market in 2019 include growth in domestic consumption, private investments and new model launches,” he said.

He said exciting product launches — including the Perodua Aruz, the upcoming Toyota Yaris and last December’s reveal of the Proton X70 — would likely gain momentum and contribute to the growth of the overall industry.

Vivek said SUVs are expected to remain the most popular segment in Malaysia for 2019, and is projected to achieve a high growth rate in the market.

“We foresee a continued momentum of Proton Holdings Bhd’s SUV and we expect new models to come out from Perusahaan Otomobil Kedua Sdn Bhd (Perodua), which will induce a lot of purchases,” he said.