In this age of climate action, where governments and private entities around the world urgently seek ways to cut greenhouse gas emissions, efforts to drive the adoption of electric vehicles (EVs) will become an integral part in the development of the global automotive and mobility ecosystem. The recent announcement of the proposed Low Carbon Mobility Blueprint 2021-2030 undoubtedly relieved stakeholders, including early adopters who have long hoped for improved charging infrastructure and tax incentives for buying electric vehicles[1]. While certain industry observers have raised concerns over the lack of EV-related foreign investment due to the lack of a clear EV policy[2], we at SOCAR believe that private-public partnerships will be key in accelerating the use and adoption of EVs while driving investment in the battery and charging industries.
Looking at industry forecasts, including predictions that approximately 20% of vehicles in Southeast Asia will be electric by 2025[3] followed by EVs outselling internal combustion engine vehicles (ICEV) in ASEAN from 2035[4] – in line with projections that the global EV market will grow to around USD127.7 billion by 2022[5] and grow almost five fold to USD568.2 billion by 2026[6], it is no surprise to hear worries expressed that Malaysia is falling behind Thailand, Indonesia and Singapore in developing EV-friendly policies and not participating in this massive growth industry.
SOCAR helps overcome accessibility barriers
While the Low Carbon Mobility Blueprint 2021-2030, which aims to address land transport emissions – estimated to contribute around 20% of Malaysia’s total emissions[7], the 100% import and excise duty exemption for fully electric vehicles until 2022, followed by a 50% exemption between 2023 and 2025[8], still do not address some of the fundamental cost barriers to adoption due to the relative high cost of batteries, with EVs costing 30-40% more than a similar ICEV. Plans for a homegrown EV like the MyKar priced under RM50,000 are also still very much at the proof-of-concept stage[9]. Thus, when we consider that Malaysian car buyers have indicated a reluctance to pay more for an EV, with most wanting prices similar to a conventional car (23.88%), or only willing to pay up to 10% higher (17.21%) or up to 30% higher (16.06%)[10], there is a clear opening for SOCAR to step in to allow Malaysians to offset the cost of EV ownership.
As a company committed to expanding access to mobility options, SOCAR wants to catalyse the adoption of EVs in Malaysia as part of a push towards sustainable mobility. Using SOCAR’s existing data and network of zones, we can work closely with charging infrastructure players to efficiently plan out where the EVs should be deployed, with us being able to predict the demand and usage patterns from the day these cars are deployed. With the addition of EVs to SOCAR’s fleet, drivers are able to use these cars without the steep financial outlay to pay for the car and charging stations or paying for maintenance costs. Instead, they are free to own the experience of green mobility without the hassle or financial burden of car ownership. In particular, by offering EVs to drivers in high-density urban environments via car-sharing, SOCAR is continuing to reduce the number of cars on our roads and furthering our mission to offer Malaysians the benefits of driving without the hassles of car ownership. For people wanting to share the financial burden of buying an EV, Trevo is always there to provide them with an option to share their car with other members in exchange for extra cash.
Having the option to book EVs from SOCAR’s fleet across our broad network in Selangor, Kuala Lumpur, Penang, Johor, Ipoh and Melaka, more people can experience the benefits of driving EVs and the ease of charging through our partner charging networks, which will undoubtedly grow the pool of willing adopters when they experience how an EV can fit into their daily mobility needs. Once we have a base supply of charging stations, we can also work with local partners to drive up EV ownership while maintaining the ratio of charging stations to EVs on the road at around a 1:7 level.
Data gathering fuels targeted infrastructure upgrade
Meanwhile, data can be optimised to identify and remove infrastructure-related barriers, in order to support an increase in EV use. For example, a national utility company like TNB can use data on charging needs to ensure sufficient availability of appropriate charging points and efficient load balancing across strategic locations, while mobility providers can rely on SOCAR’s platform data to ensure charging stations are stationed in the right locations to cater to both city-based and long-distance driving. After sales support will also be key to EV adoption, and with SOCAR investing in its initial fleet of EV vehicles, it will have the chance to partner with pre-vetted and qualified maintenance and service centres that can meet the needs of a highly-utilised fleet.
Despite being seen as playing catch-up to our ASEAN neighbours, Malaysia’s target to install 7,000 AC charging points and 500 DC charging points nationwide through government funding, beginning with 2,000 AC charging points and 200 DC charging points by the end of 20219 is a promising goal. Coupled with incentives to the private sector to build infrastructure for the national fast charging network under the Green Income Tax Exemption (GITE) until 2030, the broader goal to reach 125,000 charging points by 20304 is in line with Singapore’s goal to have 28,000 charging points by the same year[11].
Beyond the drive
While EV adoption has advanced significantly worldwide, this sector is still relatively nascent in Malaysia. Beyond encouraging more people to switch to EVs for sustainability reasons, the economic imperative is also there for Malaysia to invest in green innovation. It has been projected that six million battery packs will be retired from electric vehicles per year by 2030[12], eventually also including those from SOCAR’s fleet, and these can be repurposed for secondary use and even used to build remote substations for storing electricity from renewable energy sources. For SOCAR, we truly believe in a future where transportation can be fully carbon neutral. While there is still plenty of work needed to achieve that across the entire value chain, we believe that we all can play our role in creating a greener circular economy by making shared electric mobility more affordable and convenient for everyone in Malaysia.
By Leon Foong, Group CEO, SOCAR Mobility Asia
[1] Channel News Asia, 14 March 2021, Malaysia needs better EV infrastructure to avoid ‘anxiety’ on road trips, drivers say
[2] The Edge Markets, 11 February 2021, The race for EV — can Malaysia keep up?
[3] ABB Conversations, 7 September 2020, Asia Pacific – the ultimate showcase of why electric vehicles are the future
[4] The Malaysian Reserve Online, 22 April 2021, Malaysia faces EV charging network challenges
[5] PR Newswire, 27 December 2017, The global market for electric vehicle (EV) will grow from $75.7 billion in 2017 to around $127.7 billion by 2022
[6] Acumen Research and Consulting, Electric Vehicle Market – Global Industry Size, Share, Trends and Forecast 2019 – 2026
[7] Paultan.org, 19 April 2021, Malaysia’s EV roadmap – 10,000 CBU full electric cars tax free, 7,000 AC/500 DC charging points proposed
[8] New Straits Times Online, 20 April 2020, Low carbon mobility blueprint to drive larger participation of EV players
[9] Paultan.org, 31 March 2021, Building a Malaysian electric car for under RM50k – EV Innovations shows the possibility with its MyKar study
[10] Statista, 18 July 2019, Acceptable price level for purchasing an electric car compared to a conventional car among Malaysians in 2019
[11] Channel News Asia, 23 February 2020, Commentary: Electric vehicles will take over Singapore. But here’s what must happen first
[12] DS&F, 20 March 2021, Malaysia Should Look At EV Battery Recycling Business
