PETALING JAYA: Malaysia should work with its Asean neighbours rather than go it alone to advance its ambition to become an electric vehicle (EV) manufacturing hub, according to interest groups in the industry.
They pointed out that while Malaysia has the potential to become a big player in the EV segment, it still trails neighbours Thailand and the Philippines in EV adoption.
For a start, the Malaysian Automotive Association (MAA) said, the government must quickly come up with comprehensive and long-term policies and incentives to fuel the EV industry.
“This will help to position our country as an attractive EV manufacturing hub in Asean,” it said in an email response to questions from FMT Business.
MAA said that while several incentives have already been offered, more could be done to speed up the switch to EVs.
It said the government could start by giving personal income tax relief to those who not just purchase EVs but also install solar panels at home.
“This will support the move to raise the proportion of renewable energy (RE) in our energy mix,” it said. The target set by the government is to have RE account for 17% of total energy source by 2040.
The Electric Vehicle Association of Malaysia (EVAM), an NGO that promotes the shift to EV, said the potential for Malaysia to become an EV hub will rise with technological enhancement, better infrastructure, more government support and market growth.
EVAM president Dennis Chuah said the infrastructure for EV charging must be expanded and there must be tax exemptions to make Malaysia the Southeast Asian EV powerhouse.
He said that rather than compete with each other, Malaysia and its Asean neighbour should complement each other.
“We may not have the manpower to assemble the car but we can supply components, semiconductors and control units,” he told FMT Business.
“Even at home, the other Asean players can have a hand in building our EV ecosystem.”
Chuah said the talent is already available in Malaysia to develop products to support an EV hub.
“We are a semiconductor producer and we can design components here. Going forward, we want to see the production increase and more local companies making parts here,” he added.
Globally, the EV market has seen an exponential expansion. Data from the International Energy Agency (IEA) shows that more than 10 million EVs were sold last year.
Growth rate is also rising globally, from about 4% in 2020 to 14% in 2022.
Several incentives are already in place to boost the EV market in Malaysia. For instance, there is full exemption of import and excise duties for completely built-up (CBU) EVs until 2025 and full exemptions on import duty for components for locally assembled EVs until 2027.
For the completely knocked down (CKD) version, there is a full exemption of import and excise duties as well as sales tax until 2027.
Besides that, road tax is not required for EVs until 2025 and personal income tax relief of up to RM2,500 for installation, rental and purchase of EV charging facilities has already been given for the 2022 and 2023 years of assessment.
Overall, the hybrid electric vehicle (HEV), plug-in hybrid electric vehicle (PHEV), battery electric vehicle (BEV) and fuel cell electric vehicle (FCEV) are collectively classified as EVs
Malaysians love their cars. Data from the MAA shows that from the 1980s to 2000, Malaysia was the largest passenger car market in Southeast Asia despite its smaller population compared with its neighbours.
This had led to the emergence of 30 original equipment manufacturers and 640 automotive vendors in the country.
Even so, Malaysia will have to shift to top gear to achieve its EV plan.