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Malaysia Sun
21 hours ago
- Automotive
- Malaysia Sun
Analysts foresee policy shifts to fuel EV market competition in Malaysia
KUALA LUMPUR, July 22 (Xinhua) -- Analysts have foreseen intensified competition for electric vehicles (EVs) in Malaysia amid policy changes in the country. Research house BIMB said in a note on Monday that Malaysia's EV market is approaching a key policy turning point, with the government expected to end completely built-up (CBU) import tax exemptions and the Approved Permit (AP) regime by year-end. "This decision will likely shape the direction of the market -- either accelerating liberalization and inviting more aggressive price competition or maintaining a controlled environment that protects local players," said the research house. BIMB noted that the policy outcome will not only affect the pace of EV adoption and pricing dynamics, but also influence the competitiveness of local original equipment manufacturers (OEMs), ongoing completely knocked down (CKD) investment strategies, and the overall outlook for the automotive sector. Hong Leong Investment Bank also highlighted in its note on Tuesday that it expects continued stiff competition for the 100,000 ringgit (23,624 U.S. dollars) to 200,000 ringgit price segment in Malaysia due to normalizing of consumer demand and aggressive new launches and sales campaigns. However, it foresees the EV segment in Malaysia continuing to gain momentum with a 4.6 percent market share in the first half. It also noted that the new customized incentive mechanism (NCM) is expected to materialize by the fourth quarter of 2025, in place of the current industrial linkage program (ILP). The NCM is being structured to encourage OEMs to expand localization activities at the local vendor level and thereby increase the ability of local suppliers to produce higher-value components. Further incentives are also being considered for EVs, in order to promote the development of this new technology in the local automotive ecosystem. Meanwhile, Kenanga Research in a note on Tuesday expects more favorable incentives from the Malaysian government, which has set a national target for EVs and hybrid vehicles of 20 percent of total industry volume (TIV) by 2030 and 38 percent by 2040. Kenanga opined that Malaysia's new vehicle sales will be supported by new battery EVs (BEVs) that enjoy sales and service tax (SST) exemptions and other EV facilities incentives up until 2025 for CBUs and 2027 for CKDs. While the exemption of import and excise duties for CBU EVs has partly driven EV adoption, RHB Investment Bank opined that it is unlikely to get extended beyond end-2025, as it thinks the government's focus will now be on attracting OEMs to manufacture and assemble their EVs locally, as CKD EVs will continue to enjoy a tax holiday until end-2027. According to the research house, an extension of the tax holiday for CBU EVs would be counter-productive for incentivizing OEMs to establish local production facilities. "While we expect EV numbers to continue picking up in the coming months, growth in market share is likely to remain moderate due to structural headwinds -- high pricing and limited availability of charging infrastructure. As such, EVs are unlikely to influence overall TIV in the near term," it said in its note on Tuesday.
The Star
2 days ago
- Automotive
- The Star
Competition in EV space to intensify on policy shifts
PETALING JAYA: The automotive industry is approaching a structural inflection point with key policy shifts expected within the next six months, amid intensifying competition in the electric vehicle (EV) space, according to a research house. The government will need to decide by year-end whether to end the completely-built-up EV import tax exemptions and Approved Permit regime, said BIMB Securities Research. The decision will shape the competitive dynamics of the local EV market, either accelerating liberalisation and inviting more aggressive price competition or maintaining a controlled environment that protects local players. Those with strong exposure to electrification, efficient sourcing structures, and high local content will be best positioned to navigate the transition, said BIMB Research. While short-term demand risks persist, particularly from policy uncertainty and price volatility, credible reform execution could unlock medium-term growth and margin stability. It retained its 'neutral' stand on the sector with a positive bias, favouring original equipment manufacturers aligned with themes of affordability, EV adoption and localisation. It reiterated its 'hold' call on Sime Darby Bhd (with a target price of RM1.76 a share) and MBM Resources Bhd (RM4.30 a share). It kept its 'sell' on Bermaz Auto Bhd (65 sen a share). Despite all companies under its coverage having EV exposure, the research house liked Sime Darby for its robust EV portfolio (BYD, BMW) and resilient internal combustion engine (ICE) volumes via Perodua. This balanced mix would ensure defensive earnings amid market transition and positions Sime Darby as a structural winner in both the ICE and EV spaces. BYD slashed the price of its 2025 Atto 3 Ultra by RM44,000 to RM123,800, with a special launch offer of RM118,800 for early buyers, placing it in direct price parity with Proton's Emas 7 Premium (RM119,800). This move has reignited speculation of an impending EV price war. It favoured controlled growth, as it aligned with the government's clear policy direction. The extension of tax incentives for completely-knocked-down EV until end-2027 reinforced Malaysia's commitment to fostering local EV production, supply chain localisation and long-term industrial development, it said.
