Have faith that together we can deliver meaningful changes for Malaysia for the sake of our future generations
pic by BLOOMBERG
EARLIER this year, Elon Musk became the world’s richest person with a net worth of US$190 billion (RM767.6 billion), taking over from Amazon.com Inc’s Jeff Bezos who held it since 2017.
Simultaneously, Musk’s electric car company Tesla Inc hit a market value of US$700 billion, making it worth more than giant automakers such as Toyota Motor Corp, Volkswagen AG, Hyundai Motor Co, General Motors Co and Ford Motor Co.
He certainly worth more than our national revenue, but that’s not the focus of this piece. Rather, this writer aims to analyse Musk’s crusade to end the age of oil and its impact on Malaysia.
As Tesla continues to strengthen its grip on the electric vehicle (EV) market, countries such as the US, UK, Japan, Norway and Canada have pledged commitments to banning the sale of petrol-powered cars from 2030 onwards to halt the catastrophic effects of climate by 2050.
The Intergovernmental Panel on Climate Change had proposed for the reduction of greenhouse gas emissions by up to 40% below 1990 levels by 2020, to avoid the temperature from rising to more than 2oC above pre-industrial levels.
2020 finally arrived and turned us into living recluses due to Covid- 19. Though the pandemic triggered a global health crisis and peacetime recession, the air quality has improved as industries, aviation and other means of transportation stop.
A reduction in commuting due to work-from-home has also helped in reducing carbon emissions. But the longer-lasting implication is the transition away from conventional fossil fuels.
Our national petrol company, Petroliam Nasional Bhd swiftly responded to the changing norm with the Net Zero Carbon Emissions by 2050 aligned with its commitment as a progressive energy and solutions partner enriching lives for a sustainable future.
Transitioning away entails end-to-end solutions beyond renewables and dwindling demand on fossil fuels. It includes further exploration into hydrogen, carbon capture utilisation, and storage, solar and biofuels in decarbonising the interconnected global energy system.
Energy transition signals that it’s time for a conversation about another strategic venture: The future of mobility given that we are home to Proton Holdings Bhd and Perusahaan Otomobil Kedua Sdn Bhd (Perodua).
In December 2019, the Road Transport Department reported that there were 31.2 million units of motor vehicles registered in Malaysia. The total includes cars, commercial vehicles and motorcycles which by majority are petrol-powered.
McKinsey reported that despite the plunging sales during Covid-19, electric mobility remained resilient in some countries. Global sales of electric cars rose by 43% in 2020.
Aside from the governments’ green commitment, the growth can be attributed to EVs being a better technology than the internal combustion engine.
EVs guarantee a driving experience with no noise, no pollution, better acceleration and cheaper running costs.
The only blockage standing between EVs and consumers is pricing and the cost of the battery, though trend is showing its coming down as well over the years.
The ballpark price of Tesla’s battery is expected to lessen to US$100 per kilowatt-hour by the end of the decade. This means that we are fast approaching a time when petrol cars will no longer be in competition with EVs on price.
What does this mean for Proton and Perodua? A case for change, naturally.
Though Proton has managed to grow its export volume and enter new markets in Kenya, Pakistan, and Brunei, they are not planning on making EVs yet due to insufficient infrastructure and demand.
EV manufacturing requires huge investment and a commercially viable return though there is an increasing appetite for hybrids.
If changing consumption patterns is an indicator, it will be a long way to woo Malaysians away
from petrol and diesel engine vehicles. Thus, rolling out the use of EVs in Malaysia requires an in-depth understanding of our driving behaviour.
Imagine driving from Kuala Lumpur to Kota Baru for Aidiladha without charging facilities as opposed to conveniently refuelling at petrol kiosks.
Understanding the psychology of Malaysians’ car buyers is also key. Some buy cars for prestige and name. The bigger the paycheque, the grander the car.
Another consideration is the trade-in value because we think about the next car to buy when buying one today.
Malaysia’s National Automotive Policy 2020 is aimed at positioning Malaysia as an exporter that embraces future mobility, including connected mobility and EVs.
We have finally arrived at the era of the trifecta of car sharing, autonomous driving and EVs. Automotive industry remains a catalyst towards developing a competitive market, productive workforce, technological and high-value processes adoption that are synonymous with the capabilities of the advanced countries such as the US, UK, South Korea, Japan, German and France.
I trust that our former Prime Minister Tun Dr Mahathir Mohamd saw this clearly, hence his insistence on a third national car to go in the direction of EVs. We know what happened next, but we owe it to him for foreseeing the need for Malaysia to explore a mobility transition to remain competitive in the global automotive industry.
While the implementation may have flown over the cuckoo’s nest, we can begin again and seek his guidance while he is still around.
But first, some horizon scanning: To generate viable return on investment in the saturated car market, Malaysia must find a niche that can drive growth in revenue and capabilities.
I also can see clearly now why Dr Mahathir wanted the private sector to lead the third national car initiative, while the government provides fiscal and market incentives through interest rate, exchange rate and the price of energy.
Capital expenditure is huge in the automotive industry. Innovation and research and development
costs can often run into billions. We need domestic and foreign investments for the capital and know-how on handling EV development here.
Acknowledging that path dependency is our greatest blockage against change, let it be reminded that Malaysia will lose greatly if we insist on staying in the carbon-based mobility mode while the market direction shifts to EVs.
Malaysia must enter the market now because the planning and execution will harness new technology and new energy for a sustainable future. Failure to pivot will disable Proton and Perodua from penetrating foreign markets bent on protecting the environment through tariff and non-tariff measures.
Now, who takes the first step on this journey? My take is the policy frontliners in the civil service. They must lead the charge to accelerate capabilities development and redesign organisational culture to meet Malaysia’s demand for sustainable growth. In simpler terms, we need to change the way we do things to support new wealth creation by our engines of growth, especially in energy and automotive.
If we can’t produce our own EVs, we must aim to produce lithium-ion batteries for electric cars, buses and motorcycles because a journey of a thousand miles begins with a single step.
The secret to getting ahead is getting started, so they said. The days onward will be filled with hard work, long hours and heartbreaks.
In other words, we will continue “delivering business as usual” while “changing business as usual”. In generating returns, we must deliver better with less resources, and deliver them cheaper, faster, better and cleaner.
Sustainable growth will also drive the demand and planning for talent supply. We must ensure our talents are able to meet the human capital needs for both the core and new engines of growth.
What does the future hold for us? Only time can tell.
The world is literally at the cusp of the greatest transformation since the invention of the automobile. The fall of the Soviet Union, Sept 11, 1997, and 2008 financial crises and Covid-19 have irrevocably changed the rules of global order.
Science and technology are no longer peripheral issues. The pursuit of knowledge has given rise to new discoveries in health, defence, security, information and communications technology, energy and transportation. The states no longer dominate agenda setting in politics, economy and social.
Non-state actors such as Musk have grown to influence policy through innovations in products and services to end the old conventions. It’s only a matter of time before electric cars, buses and bikes become the new transportation norm.
History taught us that growth is not a straight line. In actuality, progress and regress swing back and forth like a pendulum. We progress and then we retreat, we speed up then slow down before swinging back or halt completely. This is particularly so with human values and systems.
For Malaysia to remain relevant, every room for improvement must be explored, such as making automotive the vector to drive Malaysia’s science, technology and innovation revolution.
The entire ecosystem to support this endeavour must be transformed and strengthened too, including but not limited to leadership, policies, education, and talents.
Change is constant and offers many opportunities to grow and remain relevant.
Competency is the new currency, so we must be willing to learn, unlearn and relearn new knowledge and skills.
Let’s be bold enough to share Musk’s dream to colonise Mars and end the age of oil. His dreams sound insane, but it won’t harm us to dream about scaling the new frontiers and move away from the old ways of doing things.
This is an exciting time for everyone in both the public and private sectors. I have faith that together we can deliver and drive meaningful changes for Malaysia for the sake of our future generations.
Nur Ayuni Zainal Abidin
The views expressed are of the writer and do not necessarily reflect the stand of the newspaper’s owners and editorial board.