What’s stopping more drivers in Malaysia from buying EVs

JOHOR BAHRU – When Johor restaurateur Wong Weng Kong was looking to buy a new car, the self-professed Toyota enthusiast found the offerings in the market uninspiring.

A friend’s recommendation led him to consider an electric vehicle (EV). After some research, he visited a showroom for Chinese automaker BYD in Johor Bahru for a test drive in June 2023.

“It gave me a feeling that petrol cars never gave,” said Mr Wong, 47, recalling the visceral rush he felt from driving an EV for the first time. “It is really quiet, comfortable and powerful. I cannot overstate how quiet it is.”

He was so impressed that he placed a booking for an Atto 3 sport utility vehicle on the same day. A few weeks later, he purchased a BYD Dolphin hatchback for his son. 

A lack of parking space at home, where he also has two petrol and diesel cars, has delayed his plan to buy a third EV.

“Once you’ve tried an EV, you won’t want to go back to the noise of a petrol car,” he added. “It’s like driving a spaceship, using voice to control functions like winding down the windows.”

Mr Wong is among a growing number of drivers in Malaysia who have switched to EVs in the past two years.

In 2024, 21,789 EVs were registered, a 63.8 per cent increase from 2023. 

The 2023 figure of 13,301 vehicles was a 325 per cent rise from the low baseline figure in 2022, when Malaysia introduced tax exemptions to make switching to EVs more attractive.

EV drivers in the country, where private cars are the preferred mode of transport, cite a combination of financial considerations and a desire to try new technology as motivating factors.

Further driving interest was the 2023 entry of major manufacturers BYD and Tesla into Malaysia’s nascent market.

Kuala Lumpur-based media professional Ebi Azly Abdullah owns a long-range edition of Tesla’s Model 3 sedan, which has a range of more than 600km and can take him from his home to Penang or Johor on a full charge.

He enjoys the car’s functions, which have made it an extension of his office.

“I take Zoom conference calls with the (interior) camera,” he told The Straits Times from his Model 3. “If I take my wife to the market, I just wait and watch Netflix,” he said, feeling at ease that the car is not emitting air pollutants when idle.

Mr Ebi has also found a typically Malaysian use for his Tesla.

“I experimented and put durians in the frunk. The smell doesn’t flow through to the rest of the car,” he noted, referring to the front trunk, a space where the engine of an internal combustion engine (ICE) car would typically be.

Cars made by BYD and Tesla have topped sales for EVs in 2024, with a combined six models from them significantly outnumbering those from other manufacturers. Seasonal promotions like 0 per cent interest financing or rebates that shave off tens of thousands of ringgit have also worked.

Over the past few months, BYD has emerged as the dominant EV maker in Malaysia, with official figures showing 8,570 cars registered in 2024, meaning around four out of 10 registered EVs were from BYD. Tesla had 5,124 cars registered in 2024, just under one in four.

BYD’s popularity was 10th overall in 2024 when considering all types of vehicles, including ICE cars. The list was topped by Perodua with nearly 360,000 cars registered.

In Singapore, however, BYD was the best-selling car overall in 2024, with 6,191 units registered.

On the growing popularity of EVs in Malaysia, Mr Eagle Zhao, managing director of BYD Malaysia, told ST: “A key factor is the willingness of Malaysian consumers to embrace new technologies and innovations.”

He said: “Many consumers are already well versed in the benefits of electric mobility, such as reduced emissions, lower maintenance... which have helped drive interest and demand.”  

Not without hurdles

Still, some remain sceptical about EVs and their potential.

Johor-based car reviewer Ryan Ku said the current low resale values for EVs in the Malaysian market and expensive post-warranty battery replacements are still a hurdle too high for some local drivers to make the switch.

A check on Malaysian online marketplace Mudah showed listings of pre-owned units of BYD Atto 3, Malaysia’s best-selling EV, with asking prices of less than RM90,000 (S$27,360) – reflecting a depreciation of around 40 per cent of its original value in just about a year.

Most EV makers, including BYD, Tesla and Proton, offer warranties of up to eight years for the car battery, one of the most expensive components in an EV.

Sales managers said a severely degraded battery – with a state of health of below 70 per cent – will be replaced without charge during the warranty period.

However, replacing batteries post-warranty remains uncharted territory. One sales agent quoted a replacement cost of less than RM20,000, but this price will likely decrease as production costs are expected to fall each year.

EV manufacturers looking to appeal to the mass market also need to overcome two other significant hurdles – an availability of cheap petrol and the affordability of ICE cars. 

Malaysia’s best-selling car in 2024, with just under 101,000 units registered, was the Perodua Bezza sedan, whose 1-litre automatic transmission petrol variant starts from RM36,580.

In contrast, the cheapest EVs such as the Neta V and BYD Dolphin cost at least RM100,000, according to their official Malaysian distributors. Imported EVs are subjected to a floor price of RM100,000 in the country.

With Malaysia’s median salary at RM2,745 a month, according to the Department of Statistics, EVs are currently accessible only to the more financially well-off.

“(Emission) standards weigh very little on the minds of most local drivers,” said Malaysian car reviewer and journalist Tai Choo Yee. “It will largely come down to the price of the car.”

Still, some motorists have taken the plunge.

Ms Pan Xinyi, 24, shelled out RM181,000 in May 2024 for a BYD Seal Premium that came with a wall charger.

The Johor-based real estate agent defied detractors who told her that EV batteries were susceptible to explosion or that charging would be inconvenient.

Despite the criticism and high upfront cost, Ms Pan made the switch for long-term savings.

Each full charge, which takes up to 14 hours using a slower alternating current home charger, adds around RM40 to her home electricity bill, allowing her EV to cover about 500km over five days. In comparison, her previous car, a Honda Civic, cost her more than RM80 in petrol for a similar mileage.

“To me, the ‘CP value’ is high, to be able to get a car of this calibre at this price,” said Ms Pan, using a Chinese term for cost-to-performance ratio. “It may cost much more if taxes kick in.”

She added that financial factors were instrumental in her decision-making, citing the tax exemptions for fully built imported EVs until December 2025.

Typically, import duty (30 per cent of a car’s price) and excise duty (up to 105 per cent, depending on engine capacity) would have been paid at the point of purchase.

There is also road tax exemption until December 2025, after which Ms Pan will pay RM335 a year for her BYD Seal Premium. The amount is a significant reduction from the RM3,185 previously set for a car of that motor power.

Mr Tai urged drivers to keep an open mind about buying an EV.

“While it does require a lifestyle and mindset change, those who have given EVs a try have not looked back and are even buying more,” he said.

“Drivers should not make criticisms based on stereotypes before they have tested the cars themselves.”

He believes that EVs are practical for Malaysians who have access to chargers at home – typically those living in landed houses, which make up nearly 70 per cent of residential properties.

A local manufacturer-driven EV boom?

Motorists in Malaysia are not short of options in the growing EV market, with Chinese-owned brands MG, Xpeng, Neta and Chery competing with European manufacturers such as BMW and Mini for a share of the pie not claimed by BYD and Tesla.

Two home-grown automakers, Proton and Perodua, have high hopes for their relatively lower-priced EVs, with Proton already seeing strong demand for pre-orders of its first offering, co-developed with China’s Geely.

The Proton e.MAS 7, priced from RM109,800, has already doubled its initial production run to 6,000 units to meet high demand nationwide.

“I am confident that in the next three or four years, people will scramble to use EVs and move away from buying petrol or diesel vehicles,” news agency Bernama cited Proton deputy chief Roslan Abdullah as saying on Jan 22, days before the first batch took delivery.

Perodua is aiming for its eMO-I, slated for production in the fourth quarter of 2025, to be the cheapest EV available in Malaysia. It will be priced between RM50,000 and RM100,000.

Infrastructure challenge, inconsistent payment types

Affordability is only part of the equation – concerns remain about Malaysia’s EV infrastructure, where Mr Ebi said there is room for improvement.

“If I want to go to the East Coast, I will really have to think about it and plan my route because while they are rolling out the charging facilities, it’s not enough,” he added.

Malaysia is targeting to set up 10,000 charging bays by 2025, with more than 3,350 currently operational and 4,200 more in the works to alleviate range anxiety for EV owners going for long-distance drives.

Most of the operational charging bays are in urban centres in Selangor and along the North-South Expressway for the convenience of inter-state travel from Johor, through Melaka and Kuala Lumpur, all the way to Penang in the north.

Another challenge is the confusion and hassle caused by the variety of third-party chargers, with operators like chargEV, JomCharge and Gentari using different apps, said Mr Ebi.

Charging fees are also not uniformly calculated. While most operators charge based on units of electricity used, some still adopt a time-based model.

Still, Mr Ebi acknowledges that Malaysia has come a long way in improving its charging infrastructure, thanks to demand from early adopters like Datuk Shahrol Halmi, president of the Malaysian Electric Vehicle Owners Club, who has been driving his Tesla Model S since 2017.

Mr Shahrol, a former president of government agency Malaysian Petroleum Resources Corporation, said the country is likely to take a more organic approach in allowing drivers to make the switch as part of its emission targets, rather than adopting the punitive measures some European Union nations and Britain have taken to halt sales of all ICE cars within the next decade.

Path to economic transformation

As part of its energy transition road map, Malaysia wants EVs to constitute 20 per cent of annual new vehicle sales by 2030.

Drivers are more likely to make decisions based on their wallets, said Mr Shahrol, with a concerted switch to EVs likely to come with the government’s anticipated easing of RON95 petrol subsidies in 2025.

The government is expected to raise the current RM2.05 per litre price, which is among the cheapest globally.

Deputy Minister for Investment, Trade and Industry Liew Chin Tong said the hope is for EVs to ease the country’s reliance on petrol, and shift government expenditure from subsidising petrol use to helping consumers transition to EVs.

“Malaysia has 40 years of car manufacturing experience, and also has built up a strong semiconductor industry,” he added, soon after attending the November launch of Chery’s first Malaysian-produced EV in Kulim, Kedah.

“We must not just aim to manufacture vehicle spare parts, but also work to become an industry leader in vehicle chip design.

“Taking advantage of existing manufacturing chains by integrating them with electronics and electrical sectors can be an opportunity for Malaysia’s economic expansion,” noted Mr Liew, whose ministry spearheads the country’s EV steering committee.

He added that the nation’s 2.5 per cent adoption of EVs is significantly slower than that of regional neighbours Thailand (12 per cent), Vietnam (15 per cent) and Singapore (18 per cent).

Mr Liew previously said in Parliament that the government intended to resolve the chicken-and-egg predicament of charging bays and EV adoption by installing more fast DC chargers, especially along highways where drivers make long-distance journeys.

Despite having to navigate some hurdles, some EV owners like Mr Wong, the restaurateur, have opted to enjoy the drive in the moment.

“If you overthink it, you will never get to do anything,” he said.