KUALA LUMPUR: Electric vehicles (EVs) will likely be part of Malaysia's transportation sector's strategy to reduce carbon emissions and improve operatorship and supply chain management efficiency.
However, challenges exist in terms of, among others, lagging infrastructure to accommodate EVs (i.e.charging stations) and weight of large trucks and semis in inverse correlation with battery capacity, industry observers said.
Despite these challenges, the sector is gradually embracing EVs due to its environmental benefits, lower operating costs and potential regulatory advantages under the government's initiatives and incentives for sustainable solutions.
Others are the lack of skilled workers, suppliers and dealers which reduced EV reliability, lower speed (under 150kmph) and refuelling time which could cause delays in supply chain, and higher initial cost of EVs with uncertain residual value.
Integrating EVs into product supply chain
MIDF Research said Nestle (Malaysia) Bhd will play a significant role in promoting EVs for the transportation industry.
Nestle Malaysia early this week announced that its product Milo will be leading the use of EV trucks for its cross-border supply between Milo's Chembong factory in Negri Sembilan and Singapore's Jurong facility.
The EV trucks are part of "Milo Sayang Bumi" umbrella programme which reflects the company's commitment to delivering optimal operations while adhering to company-level sustainability goals and the government's policies on decarbonising the transportation sector.
Transport Minister Anthony Loke said Nestlé Malaysia's green logistics initiative to adopt EV trucks for cross-border transportation aligned with the national objective of reducing carbon emissions and promoting sustainable transportation solutions.
"Initiatives such as this bring us one step closer to realising a more sustainable low-carbon future for Malaysia and attaining our target of net-zero emissions by 2050," Loke said at the launch.
Nestle Malaysia chief executive officer Juan Aranols said the pioneering initiative under the MILO Sayang Bumi umbrella has the potential to reduce carbon emissions by some 1,000 tonnes annually.
The EV trucks will cover 280km per trip and with an average of 1,750 trips annually, subsequently reduce carbon emissions by one kiloton per annum and transforming the route into a 100 per cent green lane.
The company aims to procure an additional four EV trucks within the next six months,Aranols said.
MIDF Research expects Nestle Malaysia's initiative to contribute to the nation's goal of reducing carbon emissions by 45 per cent by 2030 (about 150,000 tonnes of CO2e), in line with the National Energy Transition Roadmap and Low Carbon Mobility Blueprint 2021-2030," MIDF Research said.
Nestle Malaysia had fully transitioned to 100 per cent renewable electricity across all its operations, which had reportedly reduced its emissions by 75 kiloton of CO2e annually.
In CY23, Nestlé Malaysia achieved a net reduction of -13.5 per cent in GHG emissions and -15.3 per cent in methane emissions compared to its CY18 baseline while continuing to grow its business.
MIDF Research believes that by streamlining the logistics and distribution regulations, while upholding the green partnership, incorporating EVs would help Malaysia avoid over two gigaton of CO2e emissions by 2035.
Driving public-private partnership
Nestle Malaysia partnered with Swift Haulage Sdn Bhd, Trumas Damai Sdn Bhd, Shell Malaysia and Volvo Trucks as well as the Transport Ministry to ensure that the initiative is supported into fruition.
The multifaceted partnership is expected to optimise logistics operations and transportation, while also supporting ancillary businesses (sustainable industrial packaging, clean energy providers) and contributing to a significant CO2 emission reduction.
"We believe that this initiative is a prime illustration of how a public-private collaboration could accelerate Malaysia's decarbonisation and energy transition efforts," MIDF Research said.
The ministry has given Nestle proof of concept (POC) clearance to employ several prime movers and trailers from other businesses to ship the Milo goods.
Truck licences are usually separated for the mainframe and the storage unit, each held by separate companies.
However, the ministry allowed two such companies to enable Nestle to promptly launch its strategy.
"Considering it is encouraging companies to use EVs in their operations, the ministry has offered POC clearance in writing for companies that wished to collaborate on similar projects.
"On top of the anticipated cheaper road tax structure for EVs, the rationalisation of the clean energy regulations in a company's operations could improve the integration of EVs, consequently ensuring a smooth transition from conventional fuelled to cleaner fuelled vehicles," the firm said.
With Nestle spearheading the use of EVs as part of its logistics operations with an established green lane, the spillover from the EV truck demand is expected to benefit logistics companies to enter similar collaborations, and other industries to invest in EVs in the near term.