This article first appeared in The Edge Malaysia Weekly on December 30, 2024 - January 12, 2025
ELECTRIC vehicles (EVs) are not new to the local market, with the first one — the Nissan Leaf — launched here in 2013. However, 2024 may well be remembered as the year when Malaysians were spoilt for choice when it comes to EVs, with the launching of many new models within an affordable range of prices as distributors leveraged the government’s import and excise duty exemptions.
“Yes, so many new makes and models in the market, and amazing value for money,” says Datuk Shahrol Azral Ibrahim Halmi, president and co-founder of the Malaysian Electric Vehicle Owners Club (MyEVOC) when asked about how the year has been for EVs.
Up to November 2024, some 19,208 EVs were registered, according to Road Transport Department (RTD) data. This was an 86% increase over the same period in 2023, when 10,318 units were registered.
The explosive growth of EVs outpaces the overall growth of the automotive market, which grew 1.4% year on year (y-o-y) to 731,000 units, according to data by the Malaysian Automotive Association (MAA).
MAA data differs from the number of registered vehicles provided by the RTD.
At 19,208 units registered so far this year, EVs made up just 2.5% of the total 771,863 registered vehicles up to November, according to RTD. This is compared to 1.43% market share in the same period in 2023.
The growth in EVs is expected to outpace that in the overall automotive market in 2025, as total industry volume (TIV) is seen to decline. RHB Research expects TIV to decline 8% y-o-y in 2025, from its projection of 790,000 units this year.
Similarly, CIMB Research expects TIV to decline by 4% in 2025, from the expected 790,000 units this year, impacted by headwinds such as the potential removal of the RON95 petrol subsidy and a possible revision of the open market value (OMV) calculation method that would effectively increase the excise duty.
According to CIMB Research, OMV refers to the total value of the locally assembled vehicle at the ex-factory stage. MAA previously estimated that the new OMV calculation revision could raise the average selling prices of locally assembled vehicles by 8% to 20%.
The implementation of the new OMV has been deferred multiple times, with the latest extension until Dec 31, 2024.
“Despite these challenges, removing the RON95 subsidy could accelerate the adoption of BEVs [battery EVs]. Sime Darby Bhd (KL:SIME) is well positioned to benefit from this, with its expanding EV portfolio across marques like BMW, MINI, Porsche, BYD and Volvo.
“We also anticipate higher BEV adoption in 2025, driven by new model launches, new entrants and rising competition among EV players ahead of the duty exemptions for imported models ending in 2026, after which domestic assembly will take precedence,” the research firm says.
The year saw Proton Holdings Bhd launch its first EV — the e.MAS 7 — on Dec 16. The C-segment sport utility vehicle (SUV) is based on the Geely Galaxy E5. The model is priced at RM109,800 for the Prime variant (entry level) and RM123,800 for the Premium version.
At this price level, the eMAS 7 will be competing against the BYD Dolphin, MG4 EV and MG ZS EV, GWM Ora Good Cat, as well as Neta X. However, within the C-segment SUV, e.MAS 7 is the cheapest in its class.
DRB-Hicom Bhd (KL:DRBHCOM) owns 50.1% of Proton, with the rest held by Zhejiang Geely Holding Group.
With the competition heating up given the influx of EVs, especially from China where carmakers enjoy government subsidies, several brands slashed prices by a few thousand ringgit. Some have questioned whether Malaysia is becoming a dumping ground for EVs, especially those made in China.
After the launch of the Chery Omoda E5 in March at RM146,800, BYD slashed the price of its 2023 Atto 3 Standard Range by RM20,000 to RM129,800. BYD Malaysia has since ceased offering this variant in its model line-up.
Sime Darby is the official importer and distributor of BYD in Malaysia.
MG’s entrance in February also shook up the industry, with the launch of MG4 EV which was priced from RM103,999. MG was brought in by SAIC Motor Malaysia, a subsidiary of SAIC Motor Corp Ltd, which owns the iconic British brand.
However, despite the attractive entry price and iconic brand, MG has yet to live up to its name in terms of sales. Up to November, only 460 MG4 EVs have been sold in Malaysia, which trails behind BYD Atto 3 (2,749 units sold) and BYD Seal (2,664 units sold).
Prices for the BYD Atto 3 start from RM149,800 while the BYD Seal is offered from RM163,800. The MG4 EV is also behind its rival the BYD Dolphin, of which 1,397 units have been sold up to November.
Meanwhile, Tesla, which made its official entrance to the domestic market in 2023, is holding its turf in Malaysia. The American EV maker sold 2,667 units of the Model 3 up to November, despite carrying a price tag which starts from RM181,000. Tesla also sold 2,145 units of the pricier Model Y.
The official entry of Tesla into Malaysia courted controversy after the EV maker said in August it would be abandoning its plans to invest in the country as well as any other Southeast Asian markets. It was initially thought that Tesla would set up local assembly in Malaysia.
To be fair, the American EV maker never actually said that it was going to set up a local assembly plant in Malaysia.
Brands with local assembly of EVs include Volvo, Mercedes-Benz and Chery Auto, which started its completely knocked down (CKD) operations of its Omoda E5 at the Inokom Corp Sdn Bhd factory in Kulim, Kedah, in November.
The Volvo C40 Recharge was the first fully-electric car to be locally assembled in 2023. It was followed by the Mercedes-Benz EQS 500 4Matic, which is being assembled at the company’s plant in Pekan, Pahang.
Whether there will be more locally assembled EVs in 2025 is uncertain, as the tax exemption on fully imported EVs is still in effect next year. The question is, will the exemption on tax for completely built-up (CBU) EVs be extended beyond 2025?
“Extending CBU EV tax exemptions would be unfair to the OEMs (original equipment manufacturers) that have or are going to invest in CKD operations,” says Shahrol. “However, we would like to see a more gradual transition, a gradual increase in the excise or import duties so that the market shock can be managed.”
Bermaz Auto Bhd (KL:BAUTO) and its partner XPeng are said to be exploring CKD operations in Malaysia. BAuto launched the XPeng G6 in August, priced from RM165,820. BAuto is already a shareholder of Inokom Corp, with a 29% stake.
Meanwhile, EP Manufacturing Bhd (KL:EPMB) announced in January that its subsidiary PEPS-JV (Melaka) Sdn Bhd (PJVM) had been appointed as the contract vehicle assembler for the Malaysian unit of China’s Great Wall Motor Co Ltd (GWM) over the next eight years.
However, these are initially for the hybrid EV model of the GWM Haval H6. The first locally assembled Haval H6 HEV rolled off EPMB’s assembly line in Pegoh, Melaka, in September.
Note that in September, EPMB placed out 30% of its shares to its largest shareholder Mutual Concept Sdn Bhd and Bermaz Capital Sdn Bhd (15% each). Following the private placement, Bermaz Capital, a subsidiary of BAuto, owns 11.54% of EPMB.
The placement was to raise RM39.65 million for the setting up of an automotive manufacturing hub for EPMB in Melaka.
In April, EPMB’s PJVM signed an agreement with BAIC Motor Corp Ltd for the local assembly of BAIC models in Melaka. Prior to that, in August 2023, the two companies had signed a memorandum of understanding to locally produce BAIC BJ40P and X55II SUVs and right-hand drive EVs to cater to the Malaysian and other RHD markets in Southeast Asia.
The BJ40P — an off-road SUV — and the X55II are internal combustion engine vehicles. BAIC only has one EV model, the EU5 and its Plus variant, which is not yet available in Malaysia in CBU form.
Currently, the government is offering income tax exemption of either 70% or 100% of statutory income respectively for a period of five or 10 years for companies investing in the assembly or manufacturing of energy-efficient vehicles, or components for such vehicles.
Tax exemption on investments of 60% or 100% on eligible capital expenditure incurred within five or 10 years respectively from the date of the first eligible capital expenditure is also provided to attract more investments in the local assembly of EVs.
What is certain is that Perusahaan Otomobil Kedua Sdn Bhd (Perodua) will be launching its first EV in 2025, with the price expected to be under RM90,000. Perodua had already shown the prototype, called the eMO-II, at the Kuala Lumpur International Motor Show in early December.
Once the eMO-II is launched, the EV market in Malaysia will be more competitive than before, as it will be the first model priced below RM100,000.
Perodua is 38%-controlled by UMW Holdings Bhd, which is owned by Sime. MBM Resources Bhd (KL:MBMR) owns a 20% stake in Perodua.
While EV growth is expected to outpace that of overall TIV, the availability of charging infrastructure remains a concern. As at Oct 31, there are 3,354 public charging points across the country, most of which are located in Selangor and Kuala Lumpur.
The lack of charging stations is more pronounced in rural areas or on highways leading to the east coast of the peninsula. The Central Spine Road as well as the Lebuhraya Pantai Timur (LPT) are two examples, says Shahrol.
There are only 78 EV charging bays in Kedah, 21 in Kelantan, 116 in Pahang, 125 in Perak, 27 in Terengganu, and only two in Perlis. In the more urbanised states outside of the Klang Valley, there are 351 in Johor, 87 in Melaka, 92 in Negeri Sembilan and 322 in Penang.
This means EV charging points are not only lacking on major highways out of the Klang Valley but also within major regional urban areas outside of the central region.
What’s more, most of these charging points are alternating current (AC) chargers, which means it would require at least eight hours to charge an EV on average. There are only 956 direct current (DC) chargers, according to BIMB Research.
The government is targeting to have 10,000 charging stations by the end of 2025. This means that, on average, 500 charging points must be installed monthly to meet the target.
The sluggish growth in charging infrastructure could be due to the need to upgrade electricity distribution infrastructure such as transmission lines and substations before more charging stations can be installed.
MyEVOC’s Shahrol would prefer that the government end the tax exemptions on imported EVs on Dec 31, 2025, and instead use the funds collected to upgrade the electricity distribution infrastructure so more charging points can be installed. “I would rather see more funding being channelled into building up charging infrastructure — the funds can be used to build up electricity distribution infrastructure [transmission lines and substations] so that charging point operators can quickly expand without having to spend extra capital on substations and additional cabling.
“This would be a long-term infrastructure investment that would benefit all motorists in the future and remove a key adoption barrier — anxiety over the availability of charging stations.”
The government provides individuals RM2,500 in yearly income tax relief until 2027 for the installation, rental and purchase of EV charging equipment or subscription fees.
Companies involved in the installation, maintenance and repair of EV charging equipment, infrastructure and stations are eligible for a 70% tax exemption for three years from the start of their operations.
The government also offers Green Investment Tax Allowance of 100% of qualifying capital expenditure incurred on green technology projects for a period of five years from the date of first qualifying expenditure incurred.
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