KUALA LUMPUR: Policy tailwinds and fuel subsidy rationalisation are expected to accelerate the shift towards electrified vehicles in Malaysia, according to CGS International Research.
The research house expects hybrid and battery electric vehicle (BEV) market shares to continue growing over the next 10 years.
The firm thinks the increased hybrid and BEV adoption in Malaysia is, in part, due to key targets and incentives being pushed forward by the government.
"This includes improving charging infrastructure, exemption extensions for import duty, excise duty, and sales tax for completely-built-up (CBU) BEVs up to 2025 and completely knocked down (CKD) BEVs up to 2027, and revamping the BEV road-tax structure," it said.
Meanwhile, CGS International said the ongoing fuel subsidy rationalisation would lead to greater cost savings for consumers moving to electrified vehicles (vs. ICE) and further accelerate hybrid and BEV adoption.
"Our cost analysis shows hybrids (HEVs and PHEVs) are the best value for money, followed by BEVs, with ICE vehicles being the costliest option.
"We think the fuel subsidy rationalisation would accelerate electrified vehicle adoption in the longer term," it said.
Moving forward, CGS International said Sime Darby Bhd is expected to be a key beneficiary of vehicle electrification in Malaysia as it offers the most comprehensive hybrid/BEV line-up in Malaysia, with offerings at premium, mid-, and mass-market levels.
"We revise up our financial year 2025 (FY25)/FY26 sales volume market share estimates of Sime Darby's Malaysian motor business to 60.2 per cent/ 60.7 per cent from 58.6 per cent/57.2 per cent previously," it said.
Overall, the firm maintains a neutral call on the auto sector.