TA Research says TNB would benefit via the increased utilisation of its electricity transmission and distribution network and maiden profits from EV charging stations.
PETALING JAYA: Tenaga Nasional Bhd
’s (TNB) venture into the setting up of the electric vehicle (EV) charge point infrastructure (CPI) is set to benefit its environmental, social and governance (ESG) rating and investor perception.
The investment into the EV charging ecosystem has a lot of potential but TNB’s management has told TA Research that the CPI business is not expected to break even until EV usage gains scale in the country.
The research house stated that over the longer term, TNB would benefit via the increased utilisation of its electricity transmission and distribution network and maiden profits from EV charging stations.
“Based on TNB’s projections, the EV market will generate annual electricity revenue of RM1.25bil by 2030.
“Additionally, unit sales of electricity from EV charging stations are expected to reach 15% of TNB’s revenues by 2040,” TA Research said in a report yesterday.
TNB’s role within the EV ecosystem will be confined to providing the CPI, supported by its mobile app platform.
Data by the Road Transport Department showed that there are more than 10,000 EVs registered in Malaysia in addition to 80,000 petrol-electric hybrid vehicles and some 2,700 diesel-electric hybrids.
The high price point for fully imported EV cars remains inhibitive with the cheapest priced at above RM140,000.
National car makers are expected to start making EVs by 2026 and hit the market by 2027 in the price range of about RM80,000.
At that price level, TNB projects EV volumes to skyrocket to 524,409 by 2030.
Hence, it has a four-year period to develop the CPI for the EV ecosystem.
In the meantime, TA Research stated TNB’s management believes heavy commercial vehicles used for logistics and e-bikes could significantly boost EV volumes in the country.
TNB expects to install 3,300 CPI by 2025 and raise that to 18,000 by 2030.
From 2022 to 2024, it plans to invest RM90mil to deploy nine electron hubs (costing RM83mil), 25 standalone direct current fast chargers (costing RM6.25mil) and 72 destination chargers (RM750,000).
The company will likely face some competition from other charge point operators like Gentari and ChargEV.
But for now, they are no preceived as competitors, but rather as enablers of the EV ecosystem.
“We believe an early start will enable TNB lead time to establish itself as a market pioneer and carve market share.
Moreover, it is envisaged that consumption of electricity from EVs will eventually increase.
“This is in anticipation that EVs will ultimately edge out market share owned by internal combustion vehicles in the future,” the research house said.
TA Research also maintained a “hold” call on TNB with a target price of RM9.60 a share, based on a discounted cash flow valuation method.
