The EV race needs a recharge

NEWS flow of restructuring involving legacy brand distributors is commonplace these days.

Recently, Singapore’s Borneo Motors, which distributes Toyota, Lexus and Suzuki cars on the island, announced a restructuring exercise that will lead to a reduction in its workforce.

Noted to be a blue chip employer, Borneo Motors embarking on its first major restructuring was in response to the challenges being posed by electric vehicles (EVs) from China.

Singapore is venturing down that road because of its shift towards EVs.

A small and planned island like Singapore will be able to roll out such wide market-shifting agendas.

The EV onslaught, however, is being felt around the world.

In Europe, large traditional automakers are already feeling the pressure.

Traditional giants like Volkswagen, BMW and Mercedes-Benz are seeing sales come under pressure as Chinese EV makers penetrate the European market.

Despite higher tariffs on Chinese EVs and relatively high electricity prices in Europe (the prices of petrol and diesel are also high in the continent), sales of EVs have accelerated in the region in recent years.

The impact of the EV push and the rise of Chinese carmakers across the Western world and Asia are creating ripple effects throughout the industry.

Traditional car giants have responded with restructuring, job layoffs and the relocation of manufacturing operations to lower-cost countries.

The pressure on these established players has squeezed profits and slowed the industry’s previous growth trajectory.

That shake-up has not escaped Malaysia. Traditional non-national carmakers have seen their sales shrink over the years and as sales fall and consumer preferences change, the impact will be felt across the industry in both the short and long term.

Luxury marques such as Mercedes-Benz and BMW have given way to MPVs (multi-purpose vehicles) and changing dynamics within the premium segment, while even mainstream brands such as Toyota and Honda have seen their sales eroded by Chinese automakers.

Chinese cars have gained rapid acceptance in Malaysia, largely due to their competitive pricing and the overall quality they offer consumers.

It was reported that China had subsidised its car companies to the tune of US$231bil from 2009 to 2023 as part of its EV push.

This injection of direct and indirect subsidies has given the industry a huge advantage when traversing the export market, and it is no different here.

There have been reports of traditional car companies having to slash prices dramatically in China just to keep up.

Even in Malaysia, this trend is becoming apparent. One wonders what will be the long-term implications of such a dramatic market-altering shift in consumer preferences.

Ultimately, consumers will decide, and companies have to either keep up or exit.

Sales of EVs in Malaysia have grown not only in percentage terms but also in absolute numbers in recent years.

There were under 31,000 EVs sold in 2025, up from just under 15,000 in 2024.

The removal of the tax-free holiday has done little to dissuade buyers, with sales continuing to grow.

However, as sales rise, the one factor that is holding back wider EV adoption remains the charging network.

Based on the latest figure, Malaysia has under 6,500 public charging bays for EVs, with the overwhelming majority located in Peninsular Malaysia.

That number is way short of the government’s target of 10,000 charging bays by the end of 2025, and it now appears that the government is thinking of a levy to accelerate the rollout of more charging infrastructure. The government now plans for 30,000 charging bays by 2030.

Whether a levy should be imposed on EVs to fund a wider charging network is debatable. I don’t think oil companies were asked to pay to set up petrol stations back in the day, and I don’t think there were any additional fees charged in the importation or production of petrol cars in Malaysia to build petrol stations in the country.

It was surely down to market mechanics. In fact, the growth and adoption of EVs in Malaysia should be enough of an incentive for private companies to build charging stations nationwide.

The question is why isn’t this happening at a faster pace? Could red tape be holding back the rollout?

However, given how fast Malaysia’s crude oil production has declined over the years and the country being a net importer of crude oil may hasten the realisation that it does not make sense for the country to maintain one of the cheapest petrol prices, thanks to an expensive subsidy.

Cutting back on the subsidy could easily fund whatever charging network plans the government may have, but surrendering the automotive industry to imports in the push towards EVs is another issue.

EVs may not be for everyone, with hybrids offering better economics at current petrol prices.

However, eventually, changing consumer preferences and technological advances may eventually drive broader adoption of newer mobility solutions.