For a start, the general perception among the rich is that petrol is still cheap so there is little incentive to go electric, according to Aishah Daniyal, executive secretary of Zero Emission Vehicle Association (Zeva).

“This is despite the fact that electric versions of renowned makes such as BMW, Volvo and Mercedes are already in the market,” she said.

Electric Vehicle Association of Malaysia (Evam) president Dennis Chuah said the availability of charging stations will determine the rate of adoption of EVs.

Deputy finance minister Ahmad Maslan recently announced that those in the T20 group – the 20% of the population who are in the highest income bracket – will no longer enjoy subsidies for petrol and diesel from next year.

However, the mechanics of how this will be implemented has yet to be worked out.

Subsidies on RON95 and diesel amounted to RM50.8 billion last year, up from RM11 billion in 2021. As a result of the subsidies, pump prices for both are around RM2.05 and RM2.15 respectively, about RM1.65 to RM1.70 lower than the market price.

There is no subsidy for RON97, which retails at RM3.70 per litre.

Lack of initiative to go electric

Aishah said while there have been EV versions of luxury cars such as BMW, Volvo and Mercedes for some time now, others that have yet to make the transition are unlikely to do so within the next year or two given the time consuming nature of research and development.

“Regardless, it is worth noting that EVs offer significant advantages,” she told FMT Business.

For a start, operating an EV is 30% cheaper than driving a conventional car using RON95 petrol.

“There is also the convenience of home charging,” she added.

Apart from the European carmakers, those in South Korea such as KIA and Hyundai are also offering EVs. But at a still relatively high price of about RM200,000, it is within the reach of only T20 and perhaps upper M40 groups.

Chuah said the lower cost of operating an EV would be a selling point, and any decision to switch to EVs may not necessarily be determined by the fuel subsidy.

He sees a huge potential in the motorcycle market. Businesses and agencies that have huge fleets of motorcycles could benefit significantly from switching to EVs.

He singled out the traffic police, Pos Malaysia and food outlets that offer delivery service as some of those that will benefit from using EVs.

“In some instances, a rider could travel up to 200km a day,” he told FMT Business.

Inevitable shift

With or without fuel subsidy, the switch to EVs is unstoppable, according to some industry executives.

Sisma Auto (KL) Sdn Bhd head of after-sales operations Rajesh Rueben pointed out that it is already happening in Europe where petrol-driven engines will be completely phased out by 2030.

Malaysia will likely have to go with the trend, he said.

Even those in the T20 group will adapt to the changing market and new consumer preference, business development executive at Naza Corporation Holdings Sdn Bhd, Karishma Rani said.

“EVs are the future. Even luxury brands such as Tesla, Porsche and Audi are already in the electric car market,” she said.

Environmental concerns

While the switch to EVs may lead to lower emissions on the highways, environmentalists have warned that there is a payback.

Pumping up the extra energy into the grid to charge more EVs could put a strain on the environment.

Questions have been raised in many countries about the use of highly polluting feedstock such as coal as well as the environmental cost of building more dams to generate electricity.

But by embracing the transition and leveraging on the right expertise, Malaysia should experience a smoother drive along the EV highway.