Is Malaysia Ready For Electric Cars?

Automologist LING is not a Luddite but believes that there are concerns to be addressed before pushing for EV adoption. 

The Malaysian government has announced tax incentives for the buying and use of an electric vehicle. Besides the import, excise and road taxes being 100% exempted, the individual will also enjoy tax exemption of up to RM2500 for whether they have “purchased, rent(ed) or have been paying to charge the vehicle while it’s being docked.”

Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz said, while tabling the 2022 Budget in parliament, that this initiative is part of the government’s plan for Malaysia to achieve carbon neutrality by 2050. Now, that sounds nice and all, but how ready are the country and its citizens for electric vehicles or will this inevitably benefit only a few.

Affordability. There is only a handful of EVs available in Malaysia at the moment: the Nissan Leaf, Mini Cooper SE, BMW iX, BMW iX3, the recent addition of the Honda E; the surprise hit, the Porsche Taycan, which was practically driving itself out of the local showrooms despite a starting price tag of RM750,000; and while the Tesla is not officially on our shores, it is available through a parallel importer.

But even the cheapest vehicle on this list, the Leaf, sells for about RM180,000; with the tax exemption, the price could be slashed by about RM35,000 which still places this car far above the affordable range for the average motorist.

Perhaps with the introduction of the tax exemption, we will see affordable EVs entering the market. Geely, which owns Proton,  already has an EV in its line-up but is still priced above RM100,000. Malaysia’s best-selling and go-to affordable car brand, Perodua, has said that they are looking into electrification of their vehicles but believes that the entire chain of energy, even from its source, should be considered. This brings us to…

Energy Source. Presently, coal is the main energy source in Peninsular Malaysia, contributing to 65.84% of the electricity generated for the country. This is followed by gas at 29.67% and renewable energy at a mere 3.78% and 0.7% for hydropower and solar respectively. While electric vehicles may be zero-emission, the energy they use is not. If more vehicles on the roads are depending on electricity from the same grid, will it come from just more dirty sources and will the national grid be able to support this new demand?

The government has, however, promised that there will be no new coal-fired power plants. A National Energy Policy will be introduced soon to provide direction to achieve the carbon-neutral goal by 2050, and while details are vague, what we know suggests that natural gas will play a big part. Natural gas, though cleaner than petrol or diesel, is not without some emissions and is not infinite.

Charging Infrastructure. There are only 500 public AC charging stations in Malaysia and 9 public DC Fast Charging stations. DC Fast Charging stations are the way to go if we want to remove range anxiety, whereby a 15-minute quick charge should at least get you home.

Most high-rise residences and that’s about 30% of homes in the cities do not have inbuilt charging stations in the parking area. With nowhere to charge their car, high-rise dwellers will not be able to charge their cars overnight at home, which is ideally when you’d want to give the batteries a full charge.

Petrol and Diesel are Cheap. Pump prices in Malaysia are one of the cheapest in the world: RM2.05 (US$0.49) per litre of RON95 and RM2.15 per litre of diesel fuel. That’s just slightly more than one-third the price of fuel in China, where they sell the most EVs by volume and a mere 20% of the pump prices in Norway where they sell the most EVs per population. Considering the high upfront ownership cost of an EV, even with the tax exemptions, to the relatively minimal fuel savings in the short-term, budget constraints would still nudge Malaysians into choosing a conventional ICE vehicle.

Battery cost and disposal. This is a problem faced by the entire EV industry, not just a potential one for Malaysia. Replacing a battery pack in most EVs is almost if not more expensive than buying a brand new one, and thus there is barely a secondhand market for EVs as buyers cannot assess the remaining battery health.

In about 10 years, there will be a big number of EV batteries coming to their end-of-life and they potentially could be a whole new environmental issue. The dismantling of Li-ion batteries is decidedly more dangerous and complicated, and more energy-intensive.

So, to answer the question of whether Malaysians are ready for EVs, this writer thinks only a few are and they are the higher income earners, and for the sake of the environment, not until we have shifted to cleaner, renewable energy sources and figured out what to do with the batteries when they die.

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