KUALA LUMPUR: Investors should look into the electric vehicle (EV) sector in Malaysia at its nascent stage of growth, which could be structurally positive in the long run when the adoption of EVs pick up substantially, says Tradeview Capital chief investment officer Nixon Wong.
“However, investors are encouraged to understand the supply chain well before investing, and not jump straight into any company with just a signed memorandum of understanding but nothing concrete in hand,” Wong told StarBiz.
He advocated focusing on companies with strong balance sheets as well as established track records of innovations and executions on their existing businesses.
“The global EV market has grown substantially over the past few years especially with established players like Tesla’s proven track record in manufacturing and selling EVs.
“Locally, there are some listed companies that are indirectly involved in the EV sector via manufacturing of components, machineries’ fabrication processes and solutions for EV makers in the global market as well as becoming distributors,” Wong noted.
However, he pointed out that costs and infrastructure are major roadblocks to EV adoption in Malaysia.
“To bring costs down, the most direct and quick method would be to reduce taxes in the short term. Most governments are setting carbon neutral policies by 2030 or 100% EV by 2050.
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“To develop the EV market here, there is a need for more research and development (R&D), tax incentives and subsidies from the government such as import and excise duty exemptions to encourage more imports of EVs,” said Wong.
To encourage the building of infrastructure to support the EV sector such as renewable energy generation or battery charging facilities, financial assistance is required from the banking industry to encourage more investments from the private sector.
There has been a flurry of announcements by Malaysian and foreign corporates on ventures into the EV space in the country.
In August, Proton signed a deal to sell and service vehicles from premium EV brand smart Automobile or smart in Malaysia and Thailand.
The first Geely-developed smart model to be sold by Proton will be launched in the fourth quarter of 2023.
Proton also has plans to invest in a charging network by collaborating with a local charging provider, as well as to provide and install EV home charging units.
In October, Proton deputy CEO Roslan Abdullah said the national automaker would sending 16 engineers to China for six months to be trained in R&D, homologation, and testing to develop a homegrown new energy vehicle.
Two weeks ago, Roslan also said Proton planned to launch and produce its own EV by 2027, and had been discussing with potential partners to embark on the venture.,