Early entry, lower resistance will give Malaysia advantage in developing EV, says ex-Proton MD

KUALA LUMPUR: Early entry and lower internal resistance will give Malaysia an advantage in developing an electric vehicle (EV) as the third national car, says former Proton Chairman and Managing Director (MD) Tan Sri Mohd Nadzmi Mohd Salleh (pix).

He said Malaysia was not too far behind in developing EV technology as not many big car manufacturers, apart from Tesla, has a clear advantage in this field.

“Other companies have their EVs and hybrid cars but nobody, except from Tesla, can say that they have a clear advantage over the others.

“So, the competitive advantage of all companies for electric vehicles is almost the same,” he told Bernama in a recent interview.

Mohd Nadzmi, who is currently the executive chairman of Nadicorp, was Proton MD from 1993-96 and its chairman from 2009-12.

He said one of the major problems faced by big car manufacturers in adopting EVs on a large scale was internal resistance due to heavy investment in internal combustion engines (ICE), as well as from vendors and parts suppliers.

“We are a car producing country but we are not heavily invested in the old conventional technology.

“I think if we introduce new technology for the (car) industry, people will support it and there won't be much resistance,” Mohd Nadzmi said.

Nevertheless, he noted that there would be resistance from suppliers and aftersales service providers as there would be fewer components and services needed for EVs.

However, Mohd Nadzmi said these businesses could gradually adapt to such changes as EVs would not replace ICE cars overnight.

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“For the next 10-15 years, there will be more electric vehicles on the road and this will be the megatrend in the industry which is already happening,” he said.

Even though Malaysia does not have capabilities in EVs at the moment, Mohd Nadzmi said it was not impossible for the country to develop this new industry as proven by the plantation sector.

“Just look at our plantation industry (in the early stages of) planting rubber and palm oil trees which are not native to Malaysia where we managed to become among the largest exporter of these commodities.

“To me, if you want to go into a particular industry, you must have the passion for it and you must be prepared for it,” he said.

Mohd Nadzmi said entrepreneurs, private companies or even public-listed companies should take the lead in developing the EV industry while the government should play a supporting role and not become the main driver.

“You need entrepreneurs to come and do it (EV industry) while the government can take some equity or give grants to develop this industry before it can stand on its own,” he said.

Mohd Nadzmi also said it was important to hire the right people and implement the right business model to make the initiative a success, including hiring foreign expertise at the initial stage before developing local human capital.

“If Malaysia wants to grow fast in this industry, or any other industry, we must not wait for our people to have the knowledge to develop the new technology.

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“In many countries where they don't have the technology and expertise, they will buy it or hire international people to work for them. Over time, they will have more of their own people to work on the project.

“Likewise, we can do the same thing for any industries including the EV sector,” he said.

The Nadicorp executive chairman also suggested that any parties interested in developing the EV vehicle industry could start with commercial EVs such as buses and trucks, which do not need large volumes to become viable.

“The technology is readily available and (it's) only a matter of system integration.

“Let us look at EVs in a different light, like catering for the first and last mile solutions in public transport where there is not much competition, and over a period of time, we can also produce passenger cars,” he said.

According to Mohd Nadzmi, developing commercial EVs is less complicated than passenger cars due to the bigger space available in a vehcile to place batteries as well as a less complicated chassis and technology.

Furthermore, the sales packaging of commercial EVs will play an important role as commercial vehicle buyers are not customers at large, and are usually commercial business or logistics operators that are more concerned about profit.

“If it is cheaper for them to own, maintain and operate commercial EVs, I think they will opt for these vehicles,” he said.

Mohd Nadzmi also pointed out the business model used by Perodua in partnering a large foreign company to reduce development cost as one that could be emulated.

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“Perodua's business model is the best. Because Malaysia is a small market, there is a sharing of development cost between the Toyota Group of Companies, mainly Toyota and Daihatsu, and only a marginal cost incurred on Perodua.

“This is the only way to do it. Without that (right business model), I don't think any car company in a small market can be viable,” he said.

The former Proton MD also recalled his experience during his tenure at the national carmaker where Perodua was given better protection than Proton to help it stand on its own feet and that same support could be given to the new national car.

“Proton from the very beginning paid import tax and excise duty while Perodua didn't. They had that advantage over several years,” he added.

Meanwhile, Prime Minister Tun Dr Mahathir Mohamad during his trip to Japan in June, mooted the idea of creating another national car after seeing Proton's management controlled by China-based Zhejiang Geely Holdings Bhd following the acquisition of a 49.9% stake in the local carmaker from DRB-Hicom Bhd.

One of the reasons for the new national car creation, the prime minister said, was to help engineering companies that suffered following the acquisition and to boost Malaysia's engineering capabilities. — Bernama