More incentives from government to encourage people to buy EVs – Kenanga Research
Kenanga Research predicts that the government will provide more incentives to boost the demand for electric vehicles (EVs) among the people of Malaysia, as reported by Utusan Malaysia.
The research firm said that this aligns with the national target for EVs and hybrid vehicles to constitute 15 percent of the total industry sales (TIV) by the year 2030, and further, to reach 38 percent by 2040.
“The current vehicle sales are supported by new battery electric vehicles (BEVs) enjoying sales and service tax (SST) exemptions and EV facility incentives until 2025 for completely built-up (CBU) and until 2027 for completely knocked down (CKD) units.
“New registrations for BEVs surged from 274 units in 2021 to over 3,400 units in 2022, 10,159 units in 2023, and 6,617 units in the first half of 2024 (according to the quarterly report),” the research notes stated.
According to Kenanga Research, the targeted reduction in petrol fuel subsidies expected to be implemented by the government may also increase the interest of the M40 group in EVs.
“The M40 group may refrain from buying new cars, or they may choose to switch to smaller vehicles or switch to EVs to reduce their fuel bills after the rationalization of fuel subsidies,” it said.
Meanwhile, the research firm mentioned that the Malaysian government will also expedite the approval of charging stations across the country.
“The current operating number of charging stations stands at 3,951, and it is expected to nearly triple to 10,000 by the end of this year,” it said.
The research firm also maintained its forecast for new vehicle sales in Malaysia for 2024, also known as TIV, at 740,000 units (eight percent lower), which is slightly more conservative compared to the forecast of 765,000 units by the Malaysian Automotive Association (MAA).
Overall, the firm said, the income visibility level of the industry remains good, supported by a balance of orders totaling 170,000 units at the end of July 2024, unchanged from the previous month.
“More than half of this balance consists of new models, indicating the attraction of new models to car buyers,” it concluded, emphasizing that the rationalization of petrol subsidies and the implementation of e-invoices could put pressure on vehicle sales in the second quarter of 2024.
