Clear policy and incentives will drive electric vehicle adoption

A clear policy coupled with incentives will change consumer behaviour and attract investments to supercharge electric vehicle (EV) adoption, according to industry players speaking at Maybank Kim Eng’s “The Rise of ASEAN EV” webinar recently.

Having clear timelines for EV adoption and phasing out of internal combustion engine vehicles (ICEV), incentives for EV and disincentives for ICEV will increase the demand for EV. Investments will follow suit, including on charging infrastructure and stability of power.

Citing Norway’s experience, Eirik Barclay, Group Executive Vice President, New Ventures and Technology, Yinson Holdings said that there was never a subsidy for EV; instead, the government increased taxes on ICEV and fuel. This also meant that the government did not lose revenue.

Eirik believes that these measures, and the removal of fuel subsidies, will result in consumers choosing EV over ICEV due to cost of ownership.

Range anxiety remains a concern among consumers, although most do not usually drive more than 100km on a typical day. This can be mitigated with a well-planned charging infrastructure.

Lee Yuen How, Director, EV Connection Sdn Bhd said that all stakeholders such as automotive original equipment manufacturers (OEMs), oil and gas companies, utility companies, charge point operators and the government should work together to build the infrastructure.

“If you leave it to the private sector, they will only build the charging infrastructure where there are high concentrations of EV users, leaving the semi-urban and rural areas to become EV-charging desert. Therefore the government plays an important role in ensuring investment across all areas,” he added.

Jinsi Lee, Founder and Chief Executive Officer, Oyika espoused a separation between the battery and the electric vehicle for environmental and regulatory benefits.

“The party that sells the vehicle must be responsible for the battery across its entire lifecycle, instead of transferring ownership to the vehicle buyer. The seller will be required to take the battery back, recycle it and reuse it as second life storage, decommission it and so on,” he said.

“From a consumer’s point of view, if the battery is leased, then one can buy a second-hand EV and still get the latest battery technology. We are doing this for motorbikes, I don’t see why we can’t do it for vans, trucks and cars,” he added.

Maybank Kim Eng Research predicts that sales of EVs will reach parity with ICEVs by 2030, driven by the global decarbonisation agenda and millennial consumer preferences, among others.

ASEAN countries are progressively updating their EV roadmaps. Malaysia and the Philippines are the laggards in the EV race in ASEAN. The former’s Low Carbon Mobility Blueprint is an important catalyst, however more focus should be on battery EV instead of plug-in or hybrid EV to be fully on the decarbonising agenda, while the latter’s EV roadmap still lacks clarity and direction.

ASEAN should look at China and pure-EV companies for partnerships and investment, and pursue green technology such as hydrogen at the same time.

The webinar was the ninth in the Invest ASEAN 2021 series, Maybank Kim Eng’s flagship annual investor conference. The final conversation on ASEAN outlook and strategy featuring MKE’s heads of research will take place on 5 August 2021.

Access key takeaways of Invest ASEAN 2021 post-session via the hashtag #InvestASEAN on LinkedIn.

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About Maybank Kim Eng
Maybank Kim Eng is the fully-owned investment banking arm of Maybank, one of Asia’s leading banking groups and Southeast Asia’s fourth largest bank by assets. The Maybank Kim Eng group of companies comprises businesses stretching around the globe with offices in Malaysia, Singapore, Thailand, Indonesia, Philippines, Vietnam, Hong Kong, India, London and New York. Maybank Kim Eng has been in Asia for more than 40 years and offers a suite of financial solutions, which include debt advisory and arrangement via bonds/sukuk, project financing, leveraged financing and loan syndication, corporate finance, equity capital markets, merger and acquisition advisory, sector advisory, strategic advisory, equities derivatives, retail and institutional securities broking and research. A leader in many of the Asian markets that it operates in, Maybank Kim Eng has won numerous awards in the markets that it serves.