Analysts: Government should focus on incentivising EEVs
KUCHING: With the release of the National Transport Policy 2019 to 2030 ( NTP 2019-2030), analysts still believe that the government should focus more on incentivising energy- efficient vehicles (EEVs) to support the growth and usage of EEVs.
Some of the key proposals of NTP 2019-2030 on the automobile sector include accelerating the implementation of lowcarbon mobility initiatives by increasing the adoption of EEVs as a preferred mode of transportation, providing incentives for manufacturers and users to support the growth and usage of EEVs in Malaysia, to consider various models of EEV while encouraging the utilization of electric vehicles ( EVs) domestically and reducing road accidents and road fatalities by improving the safety and security features of vehicles to enhance drivers’ experience.
The government also plans to introduce a safety star-rating system for commercial vehicles covering both new and used vehicles.
“As the majority of the total industry volume ( TIV) is currently EEV- compliant, we strongly believe it would be best for the government to focus more on incentivising EEVs rather than the niche market of hybrid and electric vehicles in the local auto sector,” said the research team at AmInvestment Bank Bhd (AmInvestment).
As of the first eight months of 2019 ( 8M19), AmInvestment noted that Perodua’s market share stands at 41 per cent.
“It has been the intention of the government to make Malaysia a regional hub for EEVs by 2020. We believe that the upcoming National Automotive Policy 2019 ( NAP 2019) will provide further clarification on how the government would achieve this goal,” it added.
Based on its findings, it noted that currently, completely built-up ( CBU) EEVs are not incentivised.
“This means that imported hybrid or full- electric car models are not entitled to excise duty exemptions. However, locally assembled hybrid vehicles and EEVs are able to enjoy lower excise duties. At the present moment, there are no fully electric completely knocked down (CKD) vehicles in Malaysia,” it pointed out.
AmInvestment also highlighted that EEVs are not only confined to electrical and hybrid vehicles as they also include vehicles that meet a set standard of fuel consumption and carbon emission level.
“Vehicles that fall under these standards and classifications shown will be entitled to customised incentives from the government with a range of 65 to 105 per cent, depending on vehicle models.
“Any additional excise duties exemptions or customised incentives will benefit Perodua the most as it has the highest concentration of models under its fleet which are EEV- certified. This covers all models except the Alza.
“We also note that Mazda’s CX- 5 and CX- 8, Toyota’s Vios, Honda’s City, Jazz and Civic, and the upcoming Proton X70 CKD may be the key beneficiaries of any incremental changes in incentives as these models are also EEV- certified,” it commented.
On the safety proposal, AmInvestment said: “We
As the majority of the total industry volume ( TIV) is currently EEVcompliant, we strongly believe it would be best for the government to focus more on incentivising EEVs rather than the niche market of hybrid and electric vehicles in the local auto sector. AmInvestment
think that raising the safety benchmark for vehicles has its benefits and disadvantages to the local auto sector. It will benefit the auto parts manufacturers as this may spur an increase in demand for safety parts/equipment (such as air bags, shock absorbers, suspensions, sensors, and others).
“However, this may also lead to higher average cost of manufacturing for a car, further thinning manufacturer’s profitability margins if they are unable to pass the cost increase to car owners.
“We look forward to the details of the changes in incentives and how the NAP 2019 will support the growth of EEVs in tandem to reducing the use of carbon vehicles.”