More incentives needed to drive demand for hybrid and electric cars

THERE have been lot of chatters over duties and taxes for automobiles in recent weeks with arguments made for or against the reduction of car prices.

Notwithstanding the impact on the secondary car market and car loans, lowering car prices can bring benefits to the people.

But that will also depend on the price of petrol people will have pay for having cheaper cars.

The Government can balance its tax revenue by cutting petrol subsidies to offset any lost income from the reduction in import duties but higher energy prices will have other consequences on the economy, affecting both non-car drivers and automobile owners alike. I feel there is one way around it. The sale of energy-efficient cars in Malaysia has increased quite a bit in recent years. Not having to pay any taxes or duties on hybrid cars below two litres means that people are saving quite a bit when they buy such a car.

Granted that the cost of such cars in Malaysia is higher than what a consumer in the United States will pay in ringgit terms, it is nonetheless cheaper than the cost of a combustion engine car in Malaysia which is subject to duties and taxes.

Exemptions to import and excise duties on hybrid cars and electric cars will continue until the end of next year but I feel the exemption should be made permanent when Budget 2013 is announced in late September.

Apart from that, more incentives should be given to encourage people to buy and own such cars, especially electric cars.

Charging stations should be built in as many places as possible, starting with major cities.

Charging stations should also be installed at rest stops along major highways of the country to overcome the range limitation of electric cars.

To encourage people to own more energy-efficient cars, a category which I will limit to hybrid and electric cars and not the modern green diesel engine cars, maybe discounts on toll charges should be given to people who drive such cars.

Special Touch ‘n Go cards can be sold to owners of hybrid or electric cars to make it even more attractive to buy those cars. Maybe parking fees should be abolished for owners of those cars or special parking bays should be demarcated.

As people start buying more of such cars, the Government will lose out in terms of duties and taxes but the ever increasing sale of those cars will mean lesser consumption of subsidised petrol.

Petrol station companies and owners will frown but honestly, the world is changing.

There is a commitment to lower Malaysia’s carbon footprint and maybe lesser consumption of petrol will allay fears that Malaysia will soon become a net importer of crude oil.

The other benefit of seeing as many people buy such energy-efficient cars might translate into investments. Honda is committed to making Malaysia a hub for hybrid cars for Asean and the Oceania and higher sales of such vehicles will make other car companies ponder if it would be feasible to do the same.

Acting business editor (features) Jagdev Singh Sidhu can’t wait to see what Usain Bolt does in the 200m final.