THERE are three main reasons for economic growth to stagnate in Malaysia — market saturation of household and automotive products; increasing cost of low-skilled labour and shortage of a high-skilled labour force; and no development of products and infrastructure in line with the Fourth Industrial Revolution (IR 4.0).
For us to rise again economically, we must lead and invest in the following: creation and production of IR 4.0 products, such as pharmaceuticals, halal foods and products, semi-finished or finished palm-based products, beside the electric vehicle (EV) industry.
As Malaysia is no longer competitive in labour cost, we need to invest more in setting up many TVET (Technical, Vocational Education and Training) institutions to produce a highly skilled labour force.
Let us compare economic development and foreign direct investment (FDI) between Malaysia and our neighbour, Indonesia. Statistics show the biggest FDI into Indonesia is in the EV and EV battery manufacturing sectors, which accounted for over 70 per cent of its FDI last year.
This year, if Tesla finalises its plan to set up the Tesla Gigafactory in Indonesia, the EV industry will once again be the largest portion of FDI into Indonesia.
Indonesia-owned company PT INKA is manufacturing and exporting electric trains to the international market, including Malaysia. Soon it will mass manufacture and export its electric buses to the international market.
To support the EV industry development, two state-owned companies, Pertamina and Perusahaan Letrik Negara, were tasked with building EV charging infrastructure for Java and Bali islands.
Where is Malaysia at in the EV industry, one which is going to revolutionise the world? The answer is we are still working on the roadmap of Malaysia's participation in the industry.
Meanwhile, Europe had more than three million plug-in EV passenger cars and light commercial vehicles in circulation at the end of last year.
In mid-2020, I was invited by the Prime Minister's Department to attend a presentation by a company, Mimco Holding Sdn Bhd, that proposed the manufacturing of New Energy Vehicles (NEV) with our own technology and using its modular platform.
This was the company that was the final two shortlisted for the Malaysia New National Car Project that was proposed to the government in 2018, to manufacture our own NEV by 2022. However, it was not chosen for the project.
After an in-depth study of its proposal, Mimco does have technical and technological expertise as it has three technical partners that have provided similar services to established major automotive companies for decades.
Mimco could be a successful automotive manufacturing company producing NEV for the global market as it has the necessary knowledge and experience to become another NIO (China-owned multibillion EV company) that can compete with companies like Tesla and others.
Its modular platform is one of the reasons for NIO's success as, at present, only the Volkswagen Group has the platform, which is now used by Ford and a few other well-known companies, besides VW Group subsidiaries.
We should emulate what the United States, China and Indonesian governments did in developing their nation's EV industry by providing funding for start-up companies to realise a potentially multibillion business.
We should know that without a US$500 million soft loan from the US government to Elon Musk, there would be no Tesla today. Without the same aid by the China government, NIO would not be a US$50 billion company today. Also, it is projected that the Mimco NEV manufacturing company will generate 25,000 direct and indirect jobs.
If the government studies Mimco's proposal, which is similar in size and production volume to Hyundai's new NEV manufacturing plant in Indonesia, it is similar in terms of investment and number of jobs created by the Hyundai factory.
According to a recent report by Bloomberg New Energy Finance, 58 per cent of global passenger vehicle sales in 2040 will be electric vehicles, yet they will make up less than 33 per cent of all cars on the road.
In short, the future of cars is electric. It goes without saying that Malaysia should start to be proactive in this matter.
The author is a senior lecturer and head of Innovative Electromobility Research Lab at Faculty of Mechanical Engineering, UiTM Shah Alam. She is also former visiting researcher and Associate Fellow of United Kingdom Higher Education Academy at University College London