by RAHIMI YUNUS / pic by BLOOMBERG
MALAYSIA’S Low Carbon Mobility Blueprint 2021-2030 needs more work, including addressing the development of a public charging network amid a growing electric vehicle (EV) market among Asean countries.
Maybank Investment Bank Bhd (Maybank IB) expects EVs to outsell internal combustion engine vehicles (ICEVs) in Asean from 2035, with EV penetration expected to grow five times to 20% by 2025.
Maybank IB said establishing an essential public charging network is a strategic first step. However, this remains a challenge in Malaysia, which has 421 charging points as at March 2021 with targets to increase the amount to 125,000 by 2030.
It said government policy in the form of incentives could support the development of infrastructure and improve the affordability of EVs, while original equipment manufacturers (OEMs) must spearhead innovation in terms of battery reliability.
Maybank IB associate director Liaw Thong Jung said Malaysia’s Low Carbon Mobility Blueprint 2021-2030 has many positives, such as plans for EV infrastructure, electrifying the public transport system and two-wheeler (2W) segment, a fuel levy of one sen per litre on all petrol and diesel purchases, and incentive or penalty for diesel emission level compliance.
“That said, the EV policy is skewed towards plug-in hybrid EVs (PHEVs) and not battery EVs (BEVs). This defeats the purpose of scaling up the nationwide EV infrastructure and decarbonisation plan.
“Consumers tend to buy PHEVs solely for the lower price point attraction rather than for environmental reasons. Until the policy refocuses on BEVs, Malaysia is unlikely to inspire auto OEMs to bring in their BEV pipelines or to relocate their BEV completely knocked-down plans here,” Liaw said in a statement yesterday.
He said among the policies that governments can consider to boost EV demand are recurring fiscal incentives, such as fuel taxes or a dynamic price of electricity, and one-time fiscal incentives, such as tax exemptions or carbon pricing.
Non-fiscal incentives such as charging infrastructure, special lane access, free parking, toll exemptions and access to low emission zones can also be considered. Maybank IB noted that while EV penetration in Asean stood at 4% in 2020, EVs are expected to grow exponentially in the region in the next four to five years given its addressable market of 40 million units in the 4W and 220 million units in the 2W segments respectively.
The research house said Thailand, Indonesia and Malaysia represent the three largest 4W market segments in Asean in terms of sales, with a dominating 75% market share while also being the production hubs in the region.
In the 2W segment, Thailand, Vietnam, Indonesia and Malaysia collectively command a whopping 99% market share in terms of sales.
“Thailand, Indonesia and Singapore remain ahead of the pack in terms of developing EV-friendly policies. Meanwhile, Malaysian consumers are very price-sensitive and pro-national cars, whereas the Philippines prefers motorcycles.
“Fuel subsidies also contribute to higher consumer preference for ICEVs. We foresee faster adoption of 2Ws versus 4Ws in Asean,” it noted.
Maybank IB said key drivers for EVs in Asean include falling costs, consumer preferences for cleaner and greener lifestyles, and government policies.
However, it said Asean automotive markets are still very focused on ICEVs, with EV adoption at an early stage, at a penetration rate of below 1% at present.
Maybank IB said Asean should look at attracting China’s EV investment and at potential EV partnerships to leverage opportunities in EV.
It said China has a proven EV model with a complete value chain and proven EV companies, and Asean could be a right-hand-drive EV market for Chin