The country's strategic moves are deeply influenced by broader global economic shifts, including the geopolitical tensions surrounding the recent US tariff threats against BRICS nations, which include Brazil, Russia, India, China, and South Africa and the ongoing global energy transition which is reshaping economies worldwide.
While Malaysia aims to reduce its reliance on fossil fuels, its energy mix still depends heavily on natural gas and coal for electricity generation.
As Malaysia increases its EV adoption, it will also need to accelerate the transition to renewable energy to fully realise the potential of electric mobility.
US President-elect Donald Trump's demand for BRICS nations to commit to using the US dollar as their reserve currency, coupled with the threat of imposing 100 per cent tariffs on those who attempt to abandon it, could disrupt global trade and investment flows and may affect Malaysia's economic outlook.
Strategic shift
The government has set an ambitious goal of having 15 per cent of all vehicles on the road be electric by 2030, driven by a need to decarbonise the transportation sector and reduce dependency on fossil fuels.
In a bid to promote EV adoption, the Ministry of Energy and Natural Resources launched the National Automotive Policy 2020 (NAP 2020), offering incentives like tax exemptions and rebates for EV buyers to support local manufacturing of EVs and components.
Despite these efforts, as of the first half of 2024, EV sales in Malaysia accounted for just 2.6 per cent of the total industry volume (TIV), underscoring both the growing interest in EVs and the hurdles that remain in achieving the 2030 target.
However, according to the Malaysia Automotive Robotics and IoT Institute (MARii), the local EV market could reach 100,000 vehicles annually by 2025, provided the necessary infrastructure and incentives are in place. This would require significant investments in EV charging stations, which the government has already begun developing.
Accordingly, the Malaysia Automotive Association (MAA) stated that if the government meets its 2030 target, the EV market could contribute an estimated RM10 billion annually to the Malaysian economy.
Locally, automakers like Proton and Perodua are gradually embracing the shift to electric mobility. Proton, in partnership with Geely, recently unveiled the Proton e.MAS 7, while Perodua has unveiled the eMO-II (pronounced M-O-20).
Govt support for electric push
Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz has stressed Malaysia's commitment to the EV sector, which aligns with the nation's broader green technology goals.
"As of 2024, Malaysia has seen a 112 per cent year-on-year surge in EV sales, with more than 6,600 battery-powered EVs sold in the first half of the year," he said during the launch of Stellantis Malaysia's 2024 Leapmotor C10 in October. This all-electric Chinese SUV marked the debut of another key player in Malaysia's growing EV market.
At the launch of the Kuala Lumpur International Mobility Show 2024 (KLIMS 2024) on Dec 4, Deputy Prime Minister Datuk Seri Fadillah Yusof said Malaysia has the potential to become a regional hub for EV production and innovation. "Transportation, being one of the largest contributors to greenhouse gas emissions, is a critical area in Malaysia's national energy transition plan," he added.
Malaysia's proactive approach
The country's push for EVs reflects a larger trend of oil-rich nations grappling with the global energy transition, geopolitical tensions, and the shifting economic landscape.
The US tariff threats and disruptions in global supply chains may intensify challenges for Malaysia, especially in securing cost-effective EV components.
However, these disruptions also present an opportunity for Malaysia to diversify its economy, strengthen regional ties, and accelerate the development of local EV components to position the country as a potential leader in Southeast Asia's EV revolution.
-- BERNAMA
