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Low carbon mobility blueprint to drive larger participation of EV players

KUALA LUMPUR: Malaysia's low carbon mobility blueprint can drive larger participation in the electric vehicles (EVs) space by foreign original equipment manufacturers (OEMs) as well as local distributors and manufacturers.

MIDF Research analyst Hafriz Hezry said the decarbonising plan for the local road transportation sector would be positive for the automotive industry.

Hafriz said Malaysia had outlined its electrification agenda under the proposed Low Carbon Mobility Blueprint 2021-2030 by the Ministry of Environment and Water.

The blueprint is subject to final Cabinet approval.

"The blueprint essentially entails four focus areas, 10 strategies and 45 action plans encompassing vehicle fuel economy and emission improvement, EV and low emission vehicle adoption, alternative fuel adoption and greenhouse gas emission and energy reduction via mode shifts," he said in a research note today.

He added that the key points included fuel economy and emission improvement. 

"Within this space, key proposals broadly include a shift in vehicle taxation system (road tax/excise duty) based on vehicle carbon emission (currently based on engine capacity), compulsory vehicle performance evaluation, end-of-life vehicle scrapping incentive (for specific cases where replacement is for low emission vehicles) and introduction of a fuel levy (of RM0.01/litre) on all diesel and petrol purchases."

He said plug-in hybrid vehicles (PHEVs) were seen as a transition technology to full battery electric vehicles (BEVs), adding that the blueprint entailed proposals for tax incentives for both vehicle segments.

BEVs involve 100 per cent import and excise duty exemption for complete built units (CBUs) up till 2022 (for a maximum of 10,000 total volume), followed by a 50 per cent exemption between 2023 and 2025.

PHEVs cover a 100 per cent import and excise duty exemption for CBUs proposed from 2020 to 2022, 75 per cent exemption for period between 2023 and 2025 and 50 per cent exemption between 2026 and 2030. 

He said PHEV qualifications would be established based on electric range per charge and with no engine charging; set at more than 30km (2020-2021), rising to 55km (2022-2024), 75km (2025-2027) and 100km (2028-2030).

On charging infrastructure, he said a national target of 7,000 AC charging points and 500 DC charging points had been set with government funding.

Initially, 2,000AC charging points and 200 DC charging points will be set up as an immediate phase between 2020 and 2021.

"The rest of thevcharging facilities are expected to come from the private sector involving a public tender for a national fast charging network (2022-2025). 

"These services are expected to be provided with tax incentives under the Green Income Tax Exemption (GITE) for 'Services' until 2030," Hafriz said.

Under the GITE, it is proposed that fast chargers be installed at every 100km and at every R&R stop along major highways (2022-2025) in areas not serviced by private operators.

He said the blueprint also outlined adoption of BEVs in government and government-linked companies (GLCs) fleet as a catalyst for wider adoption. 

This involves a target of 10 per cent penetration of BEV in government fleet by 2022 rising to 20 per cent within 2023 to 2025. 

"By 2026 to 2030, it is targeted that 50 per cent of the government fleet will comprise of complete-knock down (CKD) BEVs. 

Meanwhile for GLCs, the target has been established at 20 per cent BEV penetration (2023 to 2025), rising to 50 per cent by 2026 to 2030 (CKDs). 

Other than these, an e-bus central procurement agency will be established, involving a revolving fund of RM450 million for e-bus competitive leasing and an annual RM100 million fund. 

For electric motorcycles, he said tax incentives were proposed for operators purchasing these as delivery service vehicles.

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