Hybrid electric vehicles are the way forward

 

From RN Desell

The automotive sector was hit hard in the last two years but gradually picked up in the final quarter of 2021.

Coming into the new year, production and manufacturing were affected after one of Malaysia’s most devastating floods across multiple states in December 2021, halting production and creating delays.

Proton’s vendors for example experienced rising floodwaters which directly impacted production volume and snowballed into the inability to fulfil orders. The effects of the floods saw the company post a 25% decrease in sales for January 2022.

Despite rising household debt and unemployment, demand for passenger vehicles will remain stable in 2022 as Malaysians view vehicle ownership as a need over a luxury, due in big part to the state of our public transport system and connectivity issues in the first and last miles.

Vehicle ownership is perhaps one of the few behaviours that remained relatively unchanged among consumers throughout the pandemic.

Even with some of the world’s highest taxes on cars, Malaysia ranks third highest in the world when it comes to vehicle ownership. Ride-sharing and peer-to-peer vehicle rental have taken a hit as people assess the safety associated with sharing an enclosed space with multiple strangers.

Towards a national EV

Demand for sustainable vehicles has been on the rise globally in tandem with growing calls for businesses to be more responsible in addressing climate change issues. In Malaysia, the government is supporting the shift to electric vehicles with tax exemptions but EVs are currently not seen as affordable for the average M40 household.

Recently, Proton Edar announced it will distribute electric vehicles by the Smart automobile company. Although the deal is seen as a way to meet rising demand for EVs, it is also a missed opportunity for Proton to capitalise on their access to the resources of Geely, which holds a 49.9% stake in Proton.

This sets back the potential introduction of the first national EV car which would propel sustainable mobility in the country.

This year can very well be the start of a green revolution with the acceleration of advanced technology to develop vehicles that appeal to climate-conscious consumers. Sustainable mobility with lower carbon emission throughout the lifecycle of a vehicle is something to look forward to in the next few years.

The obvious lack of charging infrastructure poses a problem for EV car owners, but there is a more realistic option for Malaysians who want to minimise their carbon emissions from driving.

Hybrid electric vehicles are the most realistic and immediate solution for Malaysians who want a cleaner drive. It is also an essential step to bridging the gap between fuel-powered and fully electric vehicles.

As demand for vehicles increases, car sales are expected to increase, fueled by the extension of the sales tax exemption for passenger cars, full-tax exemptions on EVs, and launches of new models and facelifts as the economy recovers and travel and tourism rebounds. - FMT

RN Desell works in the automotive sector and is an FMT reader.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.