A new public discourse for electric vehicle adoption

The launch of the first-ever Chery OMODA E5 electric vehicle (EV) manufactured at the Kulim plant is indeed a milestone in Malaysia’s automotive industry. I would like to thank Chery Malaysia, Sime Darby Motors and Inokom Corporation for inviting me to this event and for their commitment in developing Malaysia’s automotive sector.

Chery should be congratulated for the fact that 99% of their assembly workforce here are Malaysians. The industrialisation of Malaysia must mean better jobs and better pay for Malaysians, not more jobs for unskilled foreign workers. Whenever possible, we should automate more and use more technology, instead of hiring unskilled foreign workers.

As of 30 September 2024, there are 32,543 Battery Electric Vehicles (BEVs) registered on Malaysian roads. However, 98% of these BEVs are imported as Completely Built-Up (CBU) units. Before this, only Volvo and Mercedes-Benz assembled EVs locally. With today’s launch, Chery becomes another brand to assemble EVs in Malaysia, marking a significant step forward to localise EV production.

Localising as much as possible in terms of manufacturing of vehicles has a balance of payment dimension. In 2023, the automotive sector recorded a total import value of RM62.14 billion, while total export value was RM18.01 billion.

Let me share a few broader observations about EVs in Malaysia.

According to the Global EV Outlook published by the International Energy Agency (IEA), nearly one in five vehicles sold in the world in 2023 were electric cars.

Electric cars accounted for around 18% of all cars sold in the world in 2023, up from 14% in 2022 and only 2% 5 years earlier, in 2018. “These trends indicate that growth remains robust as electric car markets mature,” according to the IEA report.

In China, during some months in 2024, new energy vehicles – China’s catch-all definition for all forms of electric vehicles – make up more than half of the all cars sold.

However, Malaysia’s adoption of EVs is significantly slower, even compared to our neighbours Thailand (12%), Vietnam (15%) and Singapore (18%). In 2023, Malaysia sold 799,731 cars, of which only 1.2% were BEVs (10,159 units). Indonesia’s share of EVs sales in 2023 was also at 1.2%.

Yet Malaysia has a very sizable total industry volume (TIV) and highest per capita sales of cars in Southeast Asia. In 2023, 799,731 vehicles were sold while in 2022, it was at 721,177 units. Indonesia has a far larger population but sold 1,005,802 four-wheelers in 2023, Thailand’s domestic sales was 775,780 units.

Malaysia has revised its xEV (which includes all forms of electric hybrids) share of TIV in accordance with the aspirations of the National Energy Transition Roadmap (NETR) to 20% in 2030, 50% in 2040 and 80% in 2050.

At 1.2% in 2023, and 2.6% of TIV in the first half of 2024, Malaysia is still quite far from the 20% target of 2030.

But just like the old tale of two shoes salesmen, the first salesman thinks that since no one wears shoes in the village, no one would buy shoes. The other sees this as a fantastic new market with massive room to grow exponentially.

I would like to take this opportunity today to urge government leaders, officials, the automotive industry, and the public, to see electric vehicles – here I include PHEVs and other forms of electric vehicles, not just BEVs – as the way forward for green transition, and the way to reduce usage of petrol.

For Malaysia to achieve energy security, we will have to restore Malaysia as a net exporter of petroleum. In 2022, Malaysia imported US$12.2 billion of crude petroleum, becoming the 21st largest importer of crude petroleum in the world. In 2022 and 2023, the total amount of fuel subsidy (RON95, diesel and LNG) stood at about RM50 billion, about one-eighth of the national budget.

The current debate about subsidy rationalisation is useful from the fiscal point of view. But to the users who rely on their vehicles, they still need to drive unless there are viable alternatives. As a nation, we should do a lot more for public transport to reduce the need for driving.

Electric vehicles of all forms including PHEVs should also be looked upon as a solution. Not only should we focus on the current level of petrol usage, we should aim to electrify so as to reduce the total amount of petrol used by the nation, with the objective of becoming a net exporter of petroleum again.

It is in this context that we should locate the public policy discourse about EVs. There is a great urgency to populate Malaysian roads with EVs to deal with the various challenges we face: namely, the balance of payment concerns, the need to restore Malaysia as a net exporter of petroleum, the need to reduce the fiscal burden of petrol subsidy, and the aspiration of building a more climate-friendly nation.

As I mentioned earlier, the share of EVs in total global vehicle sales increased from 2% in 2018 to 18% in 2023. If we get our act together, Malaysia can also see the exponential growth of electric vehicles on our roads in the next five years, reaching the target of EVs forming 20% of TIV in 2030.

May I thank Chery Malaysia again and I hereby launch the first Malaysian manufactured OMODA E5.

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Speech by Deputy Investment, Trade and Industry minister Liew Chin Tong at Chery Malaysia’s first CKD BEV Offline Ceremony for Omoda E5 on November 8, 2024.