Behind the Hype: CPOs Highlights Challenges Facing Malaysia's EV Future

It's clear that ministers, especially our beloved MITI Minister Tengku Zafrul, must paint a promising picture to attract foreign direct investments (FDI) and automotive brands to set up base here.

This is evident during the Leapmotor C10 launch where Zafrul highlighted some impressive statistics: 6,617 battery electric vehicles (BEVs) were sold in the first half of 2024, charting a remarkable 112% increase compared to the same period in 2023. He also reaffirmed Malaysia's goal of achieving 20% electric vehicle (EV) penetration of the total industry volume (TIV) by 2030.

While these numbers appear encouraging, they overlook some underlying challenges. For instance, overall automotive sales, including EVs, have been on a downward trend. In fact, Sept 2024 vehicle sales in Malaysia saw EV sales dropped to 1,959 units from 2,240 units shifted just a month prior (Aug). This slowdown is notable, and what seems to be driving the current numbers are new model launches rather than sustained consumer demand.

Zafrul also touched on the EV ecosystem during his speech, a topic close to our hearts. As of Sept 30, 2024, according to the MEVNet dashboard, there are 3,171 EV charging bays (EVCBs) across 1,056 charging stations nationwide, with 813 being direct current (DC) chargers. Despite this, he remained optimistic about reaching the ambitious target of 10,000 charging stations by the end of 2025.

But is the industry as hopeful? Frankly, no.

According to a recent article by Digital News Asia, prominent figures in the charging infrastructure space, such as ST Chua, Managing Director, and Puvanendren Maniam, COO of a leading charge point operator (CPO) - chargEV, pointed out that the road to electrification in Malaysia is riddled with challenges for both the government and affiliated agencies.

One major obstacle is the high import duties on charging equipment, coupled with a 10% sales tax on a business that is unlikely to break even for another decade. This is a reality we at Carz.com.my have emphasised repeatedly.

Additionally, Chua and Maniam highlighted a critical point: multiple regulatory bodies are complicating the process with unnecessary hurdles. Agencies like SIRIM and BOMBA have added layers of bureaucracy that make the rollout even more difficult.

Moreover, there's the issue of inadequate power infrastructure, especially along highways. Puvanendren noted that CPOs are expected to pay around RM300,000 as a “contribution fee” just to set up a compact substation for a 600 kW charging station.

However, the substation isn’t owned by the CPOs but Tenaga Nasional Berhad (TNB), and the power from the sub-station is to be shared with any other CPOs or entities if needed. This discourages many from speeding up the installation of highway chargers and did we mention the TNB which is the national power utility provider also has vested interest in the CPO space via TNBX.

This situation is further compounded by the lack of proper government incentives. While the government is aiming for 10,000 EVCBs by 2025, CPOs are only granted a three-year tax break, with little long-term support. In contrast, countries like Norway offer significantly better incentives to drive EV adoption.

Chua also pointed out another significant issue: the lack of public education and awareness. In some cases, misinformation from government entities adds to the confusion. CPOs and EV brands often have to debunk myths about EV safety. Who can forget the time our BOMBA chief advised against charging EVs in the rain or warned against overcharging to prevent EV fires?

Despite these hurdles, CPOs like chargEV, along with its roaming partners such as Gentari and EVC, remain committed to pushing forward and helping the government achieve its goals. However, several points need to be addressed, particularly around the various guidelines issued by different government departments and local councils (PBT). Contrary to what the MITI minister stated, there is no one-stop centre for CPOs to rely on for guidance.

With the Budget 2025 set to be announced tomorrow, it will be interesting to see if the government takes all these matters seriously and extend support where it's needed the most towards a collective EV adoption goal.