Malaysia lacks clear electric vehicle policy despite zero tax – report

The government’s proposal to exempt electric vehicles from import, excise and road taxes, announced when the 2022 budget was tabled in October, has been widely welcomed by automakers and consumers. It has also already led to positive results, as evidenced by the attractive pricing of the recently launched Hyundai Kona Electric.

But while price is a big part of the electric vehicle conversation, it’s not the only obstacle to widespread public acceptance. There are also the problems of local manufacture and assembly of electric vehicles and the very important charging infrastructure, and industry watchers say that without a clear policy Malaysia will continue to lag behind in the industry. adoption of electric vehicles, The edge reports.

According to Malaysian Electric Vehicle Owners Club (MyEVOC) President Datuk Shahrol Halmi, while the tax exemption will help boost demand and advocate for investment in fast-charging infrastructure, the eligibility period of two years will prevent outside actors from entering. a two-year limit will deter people like Tesla from coming, which is a shame as they are good at building charging infrastructure, ”he said.

Tesla already has a presence in the Southeast Asia region of Singapore, where it sells the Model 3 and operates three Supercharger fast-charging stations. While these stations are currently limited to Tesla vehicles, the Silicon Valley automaker plans to gradually open its network of Superchargers to other electric vehicles and has already started a pilot program in Norway.

Tesla already has a presence in Singapore, but expansion in Malaysia unlikely

There is also a lack of clear direction when it comes to charging infrastructure. While the government has granted income tax relief of up to RM 2,500 for individuals who purchase a home charger, it remains to be seen whether companies will be incentivized to invest in building public charging stations. .

Malaysian Automotive Association (MAA) President Datuk Aishah Ahmad said the organization was grateful for the long-awaited tax exemption, which will encourage automakers to build electric vehicles in Malaysia. “However, infrastructure development and the availability of electric charging stations must also be developed and made available throughout Malaysia,” she added.

The good news is that there is some movement on this front, ironically with petroleum retailers in the lead. Shell is working with Porsche and BMW to set up fast-charging stations along the north-south highway to alleviate range anxiety issues, as is Petronas with Mercedes-Benz. Both companies plan to complete their pilot projects by the first half of next year.

Eclimo electric motorcycle and battery maker executive director Datuk Dennis Chuah said electric vehicle manufacturing uses “transformative new technology” and has the potential to reshape a variety of industries and create economic opportunities.

A number of electric vehicles have been launched over the past year,
including the Hyundai Kona Electric (left) and BMW iX (right)

“Electric vehicles are not like vehicles with combustion engines. The main part of the vehicle consists of electrical and technological components. To support this, Malaysia needs more people in research, engineering, innovative technological expertise and development of vehicle design and battery technology.

“Education plays a crucial role. We need to focus on training and developing people in the automotive industry to be ready to work with the next generation of technology, ”he said, adding that the government should consider policy and research grants and development to encourage entrepreneurs and manufacturers to participate in e-mobility development.

The publication said a clear electric vehicle policy should also include a timeline for the government to phase out internal combustion engines, as many countries have already pledged. Shahrol agreed, saying Malaysia should start involving the public on the costs of fuel subsidies and develop a plan to phase them out to prevent people from using ICE-powered vehicles. “They can start with a congestion charge for ICE for downtown KL, and have a timeline to apply a carbon tax, perhaps to start in 2025, with a nominal fee.”

Proton has confirmed its intention to build electric vehicles,
but Perodua says hybrids are the greenest solution for the country

Aishah, however, said banning ICE vehicles would not be a good idea and could cost the ruling government dearly in elections, as low-income groups would still need access to more affordable vehicles using the vehicles. legacy technologies.

For its part, the tax exemption proposal has spurred an encouraging movement in the auto sector, with companies like Mercedes-Benz announcing that a range of electric vehicles will arrive starting next year. On the domestic automaker side, Proton confirmed that hybrid, plug-in hybrid and fully electric vehicles are in the works, while Perodua is currently conducting market research on hybrid cars.

The latter, however, is ruling out fully electric vehicles for the time being, saying hybrid vehicles are currently the greenest solution for Malaysia given the country’s reliance on coal power.

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