This article first appeared in The Edge Malaysia Weekly on August 14, 2023 - August 20, 2023
THE experience is just superb. Once you have tried an EV, you will never switch back to an ICE (internal combustion engine) car,” says Tan Aik Keong, CEO of app development firm Agmo Holdings Bhd, who bought an electric vehicle (EV) about 10 months ago.
Driving an EV can be cool nowadays. However, it is more than just being trendy. It is more economical to drive an EV, according to Tan.
For instance, EVs require less frequent servicing than ICE cars. More importantly, the cost of operating and maintaining the vehicle is much lower.
Every month, Tan spends about RM400 on electricity to charge his EV, which translates into about 700kW at RM0.57/kWh — the tariff ceiling.
“That gives me about 175kW or about 700km per week. It is significant savings compared with driving an ICE car,” he tells The Edge.
An EV needs 2kWh of electricity to travel a distance of 10km. This comes up to RM1.14, based on a tariff of 57sen/kWh, whereas a litre of RON95 petrol costs RM2.05.
Tan says he does not experience much anxiety, which some people claim to, when the battery is running low. To avoid range anxiety, he plans his journey properly, making sure there are charging stations available along the route.
It is range anxiety that has put off many car owners when it comes to buying an EV, especially among those who drive long distances or travel to other states. A retired Ministry of Investment, Trade and Industry officer says just thinking about the traffic jams during festivities and the anxiety it would cause will deter you from owning an EV.
EV sales doubled across the globe in 2021 and surged 55% in 2022, accounting for 13% of all vehicle sales, according to EY. Last year, EV sales reached 27% of total vehicle sales in China, while making up just over 20% in Europe and 7% in the US, says the consulting firm.
There are almost 16 million cars on the roads in Malaysia, or one car for every two Malaysians. The high level of car ownership has made the country a sizeable auto market in Asean even though its population is not as large as those in neighbouring countries like Indonesia, Thailand and Vietnam.
Malaysia’s EV adoption rate is still low, but it is rising.
Recently, the government made a decision to relax the import rules for completely built-up EVs priced above RM100,000. The government has also given incentives to encourage EV ownership — for instance, road tax has been waived until 2025 and there is an income tax rebate.
Given the rising awareness of the need to reduce our carbon footprint and the incentives offered, how many Malaysian car owners will switch to EVs sooner rather than later?
Solarvest Holdings Bhd co-founder and CEO Davis Chong Chun Shiong, who has driven an EV for more than a year, points out that Malaysia needs to have more charging stations before EVs can become a popular choice. “For now, EV drivers like us need to plan our trips better, and there is less flexibility if we have an ad hoc travel plan,” he says.
Nevertheless, Chong believes the current pricing of EVs will help boost the sales, considering that the cost of producing these vehicles is lower than that of ICE vehicles. Being a solar energy producer, he usually charges his EV with solar energy generated by a rooftop panel, which he says is even cheaper.
“For instance, I use solar power to charge my EV. My NEM (Net Energy Metering) energy cost is very low. Based on my estimation, if I use NEM to net off my electricity bill, my full range of 500km costs only about RM20. If I use normal home charging, the cost will be between RM30 and RM50,” he says.
The cost is higher, however, if one uses the public EV chargers. “Some of the high DC chargers can be quite expensive at the moment. But even then, I think it is still cheaper than petrol,” says Chong.
With more charge point operators (CPOs) in the future, he anticipates the overall EV charging cost to be lower.
One possible factor that is slowing the adoption of EVs in Malaysia is the long lifespan of cars on the road. Unlike other countries which limit the number of years a car can be operated on the road, Malaysia does not impose such limits. In short, car owners can drive their vehicles for as long as they want, giving them one less reason to get a new vehicle.
Furthermore, the low price of petrol in the country, due to the government subsidy, does not motivate ICE car drivers to switch to EVs anytime soon. Because of the subsidised petrol, the cost saving from owning an EV is not significant compared with other countries.
According to EY, the availability of green energy, capacity of the electricity grid and accessibility to charging infrastructure are among the key factors that will determine the pace of EV adoption.
The government has launched its National Energy Transition Roadmap, which addresses increasing the renewable energy supply by harnessing rooftop solar panels. It also proposes to have a percentage of the electricity tariff allocated to upgrading the grid to take the capital expenditure burden off Tenaga Nasional Bhd’s shoulders. This will enable the national grid to be upgraded faster to cater for the anticipated increase in the number of EV charging stations.
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