High EV price points remain hurdle to wider adoption

Tesla has officially landed in Malaysia. – Photos: Tesla Sdn Bhd.

KUALA LUMPUR: Despite government initiatives to encourage the purchase of electric vehicles (EV) in Malaysia, the relatively high costs remain a hurdle to wider adoption in Malaysia.

RHB Research said in a sector update there are currently no EVs priced below RM100,000 on the road (OTR) with insurance in Malaysia given that the Ministry of international Trade and Industry's (Miti) approved permit policy prevents the importation of EVs with a lower price tag.

"While EV adoption continues to grow, it has yet to reach a point where it can meaningfully boost total industry volume (TIV)," said the research house.

At present, the cheapest EV in Malaysia is the Neta V EV at RM99,800, OTR and without insurance.

Slightly more expensive is BYD's recently launched Dolphin, which carries an OTR price of RM100,500.

RHB reported that the model has been moderately popular, although it believes consumers may continue to opt for cheaper internal combustion engines.

That said, RHB believes the introduction of Tesla's Model Y, which has a starting price of RM199,000, and the upcoming launch of the Model 3 in Malaysia with a potential price of RM160,000 could ramp up EV adoption in Malaysia.

Given Tesla's reputation in the EV and autonomous driving space, the research firm said these prices are attractive, and could take market share away from other marques such as Hyundai's Ionic 6 at RM290,000 a unit and Kia's Niro EV at RM256,000 each.

Meanwhile, Chinese brand Chery launched the Omada 5, which serves as direct competition to Proton's X50 and Honda's HR-V. The Chery Tiggo 8 Pro competes with the Proton X90 and is a cheaper alternative to the Mazda CX-8.

"Despite this competition, we think that most consumers still prefer the tried and tested domestic and Japanese marques, which tend to fetch higher resell value," said RHB.

RHB has a "neutral" rating on Malaysia's auto sector as it expects car sales to soften year-on-year in 2024.

"Bermaz Auto remains our top pick as its various marques will continue to see volume growth in FY24F (Apr), especially from a low base. It also offers an attractive dividend yield of 9%," it said.