Tuesday, May 28

BMI expects sales of electric vehicles in Malaysia to quadruple in 2023

Even though Malaysia’s EV penetration rate (EV sales as a percentage of total vehicle sales) will remain at just 1.8 percent, BMI Industry Research, a FitchSolutions company, forecasts that the country’s total electric vehicle (EV) sales will triple in 2023.

Within the prediction period of 2023–2022, the research unit’s automobiles team predicts that Malaysian demand for EVs will significantly outpace that for internal combustion engine vehicles.

The dearth of reasonably priced EV models and the slowly expanding charging infrastructure, according to BMI, will pose obstacles to the rate of growth of the electrification of the transportation sector.

It should be mentioned that the Malaysian government is pushing EVs by offering import duty deductions for parts used in local EV assembly, sales tax and excise duty exemptions for locally made EVs, and import and excise duty exemptions for imported fully built-up (CBU) units.

Although the government’s recently released National Energy Transition Roadmap (NETR) acknowledged the value of hydrogen as a potential clean energy source, BMI predicted that adoption of hydrogen in the transportation sector would take some time and have a negligible effect on conventional fuel consumption.

The Malaysian government established the NETR to guide Malaysia’s transition from a traditional fossil fuels-based economy to a green economy as part of the country’s goal to attain net-zero emissions by 2050.

The government’s energy transition plans depend on the land transport sector’s continued decarbonization because it is the greatest emitter, accounting for 85% of all transportation-related emissions.

“The government’s current policy focuses on electrification of transport fleet and expanding biofuels use and this is expected to become more prominent in the coming years in the form of fuel switching to accelerate energy transition in the transport sector,” BMI said.

BMI anticipates that Malaysia’s energy transformation programmes will moderate the growth of the demand for refined fuel.

“Malaysia’s fuel consumption is projected to grow at a much slower pace than anticipated,

“Malaysia’s consumption of refined fuels is forecast to see slow and steady expansion over the next 10 years, averaging at around 1.5 percent through 2023 to 2032,” it said.

This was in spite of the Country Risk teams’ estimates that Malaysia’s real GDP growth would be 4.2 percent in 2023 and then increase to 4.42 percent in 2024.

“Though an improving economy together with ongoing fuel subsidies are contributing to a recovery in fuel consumption, fuel demand faces downside pressures from high global oil prices and energy transition initiatives,

“The near-term outlook for fuel consumption points to upside, but the pace of demand growth could slow down in the long term as the government plans to implement policies aiming to cut fuel subsidies and accelerate energy transition initiatives,” it added.

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