Charging Up Malaysia’s EV Sector Makes It Consistent With Global Growth

There are people who unfalteringly believed an abundance of renewable energy sources and favourable government policies will be a boon to the Electric Vehicles (EV) sector in Malaysia.

Investment, Trade and Industry Minister Tengku Zafrul Tengku Abdul Aziz, said in December, 2023 Malaysia saw exponential growth in EV sales and the positive momentum will likely continue until year end. And, Malaysia has more than 100,000 registered EVs to date.

“More than 12,000 battery electric vehicles (BEVs) have been registered since 2011, with the number registered this year surpassing 9,000 units,” he said, adding for the first 10 months of 2023, Malaysia’s vehicle sales registered a strong growth, up 11.6 per cent year-on-year to almost 647,000 units.

Tengku Zafrul added he believed that EVs would be the catalyst for the growth of Malaysia’s manufacturing exports.

Well, it turns out the path of the sector is now undoubtedly congruent to global growth figures.

Global EV sales up 69% YoY in January

Market research firm Rho Motion today (Ferb 14) said global electric vehicle sales jumped 69% in January from a year earlier but were down 26% from December, reflecting subsidy cuts or tighter rules in Germany and France and seasonally weaker sales in China, said on Wednesday.

Sales of fully-electric cars, or battery electric vehicles (BEVs), and plug-in hybrids hit 1.1 million in January, up from 660,000 in January 2023.

Rho Motion data manager Charles Lester told Reuters that EV sales in Germany and France fell around 50% in January versus December after Germany scrapped its subsidies and France tightened requirements for its subsidies.

But he added that new Co2 limits for the European Union that come into effect in 2025 mean automakers will spend this year beefing up their offerings of BEV and hybrid models. “What is really going to spur on sales is the EU emission standards for 2025,” Lester said.

In the U.S. market and Canada, January sales were up 41% versus a year ago and they almost doubled in China. Sales in the EU, European Free Trade Association (EFTA) and the United Kingdom rose 29%.

Against December, sales in China were down 26% ahead of Chinese New Year. They were down 32% in Europe and 14% in the U.S. and Canada.

Last month, when reporting results, General Motors said it would launch plug-in hybrid vehicles in North America, reversing a strategy of bypassing hybrid powertrains in that market. U.S. hybrid sales have been rising as consumers balk at high EV prices and recharging infrastructure challenges.

“Looking at the U.S. and Canada, the main story right now is the potential re-emergence of plug-in hybrids that GM announced,” Lester said.

Tengku Zafrul said in accelerating the National Energy Transition Roadmap, his ministry was targeting to have 20 per cent of the country’s annual new car sales to consist of electrified vehicles by 2030, 50 per cent by 2040 and 80 per cent by 2050.

Malaysia remains an attractive destination for EV investors. Between 2018 and June this year, the Malaysian Investment Development Authority approved 59 projects worth RM26.2 billion in the EV sector and its related ecosystems, encompassing vehicle assembly, manufacturing parts and charging components.

Malaysia has the capability to develop an EV ecosystem with its existing automotive industry  due to the availability of talent and expertise to produce commercial EVs that are customised to suit local needs.

Insufficient Charging Stations & Related Infrastructure

In reality, despite its readiness, the pertinent question to ask is whether Malaysia is still facing several challenges in the adoption of EVs, especially in terms of infrastructure.

The lack of charging stations and other related infrastructure issues remain a significant hurdle to the widespread adoption of EVs, particularly in rural areas.

Has demand grown too fast waiting for the charging bay suppliers to catch up, as experts have said the EV infrastructure in the country currently is still insufficient to cater to the growing demand for EVs.

To address this issue, the government has taken several initiatives to promote its development which includes offering tax incentives for companies that invest in EV charging stations and has set a target to install 125,000 charging stations nationwide by 2030.

In addition to infrastructure, the cost of EVs and the limited awareness of the benefits of EVs among Malaysians are other challenges that need to be addressed. There is still need to educate businesses on the benefits of EVs, such as lower operating costs and environmental benefits. Many have also called for EVs to be more affordable and accessible to everyone.

The ultimate aim is to know that EVs help the environment because they produce much less air and climate pollution than vehicles that run on fossil fuels. The upside for EVs is still tremendous — a medium-sized EV produces 60-68% fewer greenhouse gas emissions over its lifetime than a gas-powered car.

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