Do young Malaysians have the kind of jobs they want or are they satisfied with Grab driving and delivering food? Or would they rather have high-value employment in a non-hazardous but competitive and rewarding environment?
The answer is obvious and the way forward is clear but hampered by conflicting agendas. We need liberal and long term investment policies to reverse the declining trend of foreign investments in the automotive sector.
The late Lim Chong Eu transformed Penang into the Silicon Valley of Southeast Asia in the 1970s by introducing liberal investment policies for multinational chip makers.
Former prime minister Dr Mahathir Mohamad continued the formula of industrialisation to boost employment and income. While he identified the automotive industry as a key industry, he chose to establish one company and anoint it as a national champion while the others had to fend for themselves in the sector. This had the unintended consequences of diverting Japanese automotive investments to Thailand.
This time, the age of electric vehicles (EV) presents Malaysia a second chance of being a joint EV hub of Asean.
“I’ve always believed Malaysia should be the automotive centre in Asean. The EV presents a unique opportunity. The future of mobility is all about computers and IT and Penang is the silicon island,” said an automotive veteran who has been in the passenger car industry since the late 70’s and who’s now in the heavy commercial vehicle sector of the automotive industry with a China brand.
“Government policy needs to be open. Despite the US-China trade war, China never stopped Tesla and Apple, two American companies, from 100% foreign ownership.
“The Malaysian government needs to do more than give import permits and tax waivers for a few years. What this current 2022 budget incentive boils down to is car companies jockeying for permits to sell a few more thousand EVs for a few years, and after that, what?” he said.
He said the the automotive industry in Malaysia missed out on the first wave of investments which went to Thailand. “We shouldn’t miss out on this new wave of EV which depends more on semiconductors and software, which I think Malaysians have the skills in.”
This is the opportunity to harvest the crop of carmakers, battery makers, autonomous driving software developers and investors from China who target a regional market.
The surge of electrification in the automotive industry is a bit spotty. On an international level, it’s big in China and Europe, especially Norway where almost 80% of new car sales are that of EVs. On a corporate scale, there’s a new bunch of EV focussed makers mostly from China while traditional makers are still conservative except the Volkswagen group which is the biggest investor in EV.
However, the world’s biggest carmaker, Toyota, cautions moderation because electric-petrol hybrids such as its Prius are still very low emission compared to internal combustion engines.
There’s also justification for more measured progress towards electrification because many national grids still significantly depend on coal.
But the important issue is that the EV industry is more than mobility as Tata Motors, India’s largest EV maker, has pointed out. For the automobile industry to fully leverage the potential of electric mobility, companies need to build on their expertise in connected technologies, says Shailesh Chandra, the president of Tata Motor’s passenger vehicles business unit.
“Any electric vehicle needs to have a minimum level of connected technologies embedded into it. Otherwise, it doesn’t really work. If you don’t leverage connected car technology in an electric car, you will not have fully leveraged the benefit that electric cars offer,” he said at a Connected Vehicle Summit.
In line with its ambitions of reinforcing its primacy in India’s EV segment, Tata Motors plans to launch 10 EV models by 2025. Tata is one of India’s largest industrial conglomerates with its Tata Consultancy Service a world leader in software programming.
Reflecting the fast-paced changes in the world EV industry, the Guangzhou Auto Show which ended yesterday (Nov 28) was the stage for the Guangzhou Automobile Group to introduce the world’s longest-range mass-produced EV, the Aion LX Plus with 1,000 km on a single charge.
This long-range was achieved by new chemistry rather than merely providing more batteries. GAC has developed silicon sponge electrode technology, which is said to allow the manufacturer to reduce battery volume while boosting energy density. The car goes on sale in January.
The annual Guangzhou Auto Show is smaller than the Beijing or Shanghai auto shows but the event is closely followed as it is a leading indicator of China’s car market. One indicator is that of the over 1,000 cars displayed, more than 200 were EVs or what is termed “New Energy Vehicles” which includes hydrogen cars and hydrogen fuel cell cars.
For another perspective of EVs, almost all the motorcycles were electrically powered at the Milan Motor Show which ended yesterday. After a one-year holiday because of the Covid-19 pandemic, this year’s show was about a market that’s radically moving towards electrification.
Italian makers of electric motorcycles were determined to get the spotlight on their home ground. Fantic, the brand of Italian mopeds that are ridden by schoolchildren at top rpm around town, introduced its first electric model, 3kW and 100 km range. Some of the show-stealers were new electric motorcycles from Vmoto, Niu and Kymco.
The call to action for Malaysia is to formulate a new EV policy in the mould of Thailand’s 30@30 – that EVs are 30% of new vehicle sales by 2030.
Malaysia’s leaders will need to act and transform Malaysia into a welcoming, inclusive society so that its youth will have more value-added employment. As for economic colonialism, don’t worry. Investors just want to have a reasonable return on investment and reassurance that their investments are safeguarded.
The views expressed are those of the writer and do not necessarily reflect those of FMT.