EVS in Malaysia

SIME Darby Bhd’s move to distribute China based BYD’S cars like the Atto 3 and the new e6 models in Malaysia, analysts speculate, is expected to drive down prices of electric vehicles (EV) but will not fundamentally change the market with EVS set to remain a niche market for automakers in the country despite the government incentives in place.

The arrival of BYD signals the rise of Chinese automakers and follows peers like Geely, Great Wall Motor and Cheery into the Malaysian market.

Geely has turn things around at Proton and in many ways helped build user confidence in Chinese auto technology in the country.

BYD, in which Warren Buffett has an 18% stake, is targeting the Asean market for the long term with its new plant in Thailand.

There is scope to grow if the EV support ecosystem like charging stations are put in place and prices of EVS become cheaper.

Of the 447,209 vehicles sold till end August in Malaysia, EVS sales accounted for about 3% of market share according to industry estimates and is for now a market driven by affordability.

The cheapest EV in the local market at present is the Hyundai Kona e-lite, which has a starting price of RM157,000, and for the small number of buyers the EVS is usually the second or third car in the house.

With the bulk of cars bought in the local market below the Rm100,000-price level, EV sales at current prices will remain far behind the combustion engine makes from Perodua, Honda, Proton, Toyota and Nissan.

If EV production in the region can reach a large enough scale and selling prices fall to target the mass market, consumers will respond in kind. For the government, more EVS on the road in time to come could help divert some of the Rm30bil in oil subsidiary to other purposes.

Green certification on the rise

THE journey towards producing the costly certified sustainable palm oil (CSPO) is no easy task for planters. This is inevitable for those seeking better access into stringent markets, the European Union and North America. So, have all the efforts to attain the internationally recognised certifications under the Roundtable on Sustainable Palm Oil (RSPO) and the International Sustainability and Carbon Certification (ISCC) paid off?

Planters in recent years are said to be enjoying a higher premium for their CSPO under the RSPO and ISCC certifications. The Rspo-certified palm oil could fetch a price premium between 3% and 10% above the current conventional CPO prices.

Also, increasing awareness on the environmental, social and governance (ESG) practices, is envisaged to push up demand for identity preserved (IP) certified palm oil in the near terms.

Analysts believe that IOI Corp Bhd’s CPO production in Peninsula Malaysia and Hap Seng Plantations Holdings Bhd’s CPO production certified under IP certification now commands the highest price premium.

For RSPO, the certification body expects if all its grower members’ palm oil production is 100% Rspo-certified, the total CSPO would represent about 41% of total global production. On the local front, the government has imposed on planters to get the mandatory Malaysian Sustainable Palm Oil (MSPO) certification, given the mounting ESG challenges.

Several local planters of late have also been served with a Withhold Release Order by the United States Customs and Border Protection on forced labour allegations and Esg-related concerns.

Despite palm oil status being the most-used vegetable oil globally, accounting for over 35% of all vegetable oil production, this commodity has received the most criticism with claims of causing adverse environmental impacts globally.

Perhaps, a reasonable answer to address these mounting challenges is for palm oil producers to arm themselves with more “green” certifications issued by internationally recognised bodies as a proven testimony towards their full commitment in the entire supply chain sustainability.

For local smallholders, to attain these costly international green certifications or even the MSPO certification, the government must quickly step in to provide the much-needed financial support.