Malaysia looks to become driving force in ASEAN’s electric vehicle market

By Ming En Liew

The man at the forefront of Malaysia’s electric vehicle push, NanoMalaysia Chief Executive Dr Rezal Khairi Bin Ahmad, reveals the tech agency’s aspirations to create a larger, more accessible EV market and develop opportunities for the local workforce.

Think of an electric vehicle. What do you imagine? Tablet screens? Check. Self-driving capabilities? Check. Sleek frames and retractable door handles? Check. Even though electric vehicles are touted as cars of the future thanks in part to features such as these, they often come with a hefty price tag.

Priced at high levels, however, EVs will be accessible to only a minority of Malaysians. “You’re only benefitting the haves rather than the have-nots,” says Dr Rezal Khairi Bin Ahmad, Chief Executive of NanoMalaysia, the country’s lead agency for nanotechnology commercialisation and industrial development.

Set up by Malaysia’s Ministry of Science, Technology and Innovation, NanoMalaysia aims to make Malaysia an EV technology hub, and to make the EV market more accessible for all.

More than the sum of its parts

Malaysia is a middleweight economy within ASEAN, unlike Indonesia, whose internal market is large but characterised by low incomes, or neighbouring Singapore, which is small but rich.

Both Indonesia and Singapore are making progress in EV-related development. Jakarta has ambitious plans to produce 140GW of batteries in 2030, an amount that’s close to the global output for 2020, according to a Reuters report. Singapore is on a mission to make every one of its housing districts EV-ready by 2025, according to broadcaster CNA.

Malaysia, by comparison, has been slow to the EV game. In the first half of this year, the country had just over 6,000 EVs on its roads, Dr Rezal says. “For us to participate in the global market of EVs, we need to play a different game,” he adds.

The country is turning its focus to producing components rather than popularising domestic EV use. EV parts in its sights include batteries, battery management systems and electric motors, Dr Rezal says.

By focusing on component production, Malaysia need not worry about entering into head-to-head EV competition with its neighbours, instead complementing those countries’ goals. Dr Rezal says, for instance, that Malaysia can help to provide Indonesia with key components for manufacturing EVs. “It's very important for Malaysia to understand its position in the regional and global supply chain rather than going ahead with a collision of David versus Goliath,” he explains.

Where the rubber meets the road

Another way in which Malaysia hopes to get a leg up in the EV market is by investing in research to produce competitively priced, high-quality parts, such as the more durable rubber tyres that NanoMalaysia is developing using nanotechnology.

Durable tyres are a particularly important component of EVs due to the high torque of EV engines, which easily wears them out. As part of NanoMalaysia’s five-year National Graphene Action Plan, it is investing in the rubber industry to improve materials by integrating graphene nanomaterials into rubber compounds to strengthen them.

This has the potential to give the country an edge in the EV race, particularly since Malaysia is one of the world’s leading producers and exporters of rubber products. “It makes sense to stitch everything together,” Dr Rezal says.

More durable tyres can also improve the overall performance of EVs, as they require less power for vehicles to travel, making them more energy efficient, Dr Rezal says.

In addition to tyres, Malaysia is looking into creating more energy-efficient and environment-friendly technologies, including by exploring the use of hydrogen to power EVs and developing fuel cells compatible with hydrogen power.

Sustainability means accessibility

From Tesla to the Volvo EV spinoff Polestar, many EV manufacturers are building vehicles for the premium end of the market – sleek, fast and powerful, and boasting sophisticated electronics.

But Dr Rezal says: “My vision is to make the EV affordable.” He wants to do so by removing “frills” such as heavy electronics and encouraging the production of smaller, more affordable vehicles similar to those made by Perodua, Malaysia’s largest car manufacturer.

Malaysia is also looking into EV conversions to make the technology more widely accessible. Conversions – which the country’s Rapid Electric Vehicles Innovation Validation Ecosystem (REVIVE) aims to promote – involve removing traditional internal combustion engines from buses, motorcycles, trucks and cars and replacing them with batteries and electric motors.

EV conversions are a promising field for Malaysia as it creates local demand for the EV components that it is manufacturing. “Rather than constructing purpose-built cars, [the components] can breathe new life into existing cars,” Dr Rezal says.

At the same time, conversions open up the EV market to Malaysians in the lowest 40 per cent income bracket, who, instead of emptying their pockets to purchase new cars, can convert their existing vehicles for a fraction of the price, Dr Rezal says. “Then, they can be a part of the conversation of saving the planet,” he adds.

Another upside of EV conversions is that they create opportunities and jobs for skilled workers such as technicians and engineers. Demand will rise for technicians with EV conversion expertise, and engineers will be needed to certify that converted vehicles are roadworthy.

“It creates a butterfly effect for engineers and technicians to prosper, and even creates new businesses to supply all those critical components,” Dr Rezal says.

Tooling up for more jobs

One of NanoMalaysia’s priorities in developing the EV sector is also uplifting the workforce through job creation and domestic investment.

“There’s a high degree of underemployment in Malaysia,” says Dr Rezal, referring to the economic phenomenon in which workers are stuck in low-paying or low-skilled jobs despite their qualifications and skills due to a lack of higher-skilled opportunities. Over time, it’s a mismatch that can demoralise workers, and one reason why NanoMalaysia is seeking to “create meaningful jobs to minimise the job mismatch”.

And driving exports of local components not only drives profits, but also creates entrepreneurship opportunities, Dr Rezal says. Domestic direct investment is of particular interest to Dr Rezal. “In terms of bringing value to the local ecosystem, local workers tend to be excluded from foreign direct investment activities,” he says, as they are often unable to access and learn about imported technologies and intellectual property.

“Our aspiration is to reshape and reconfigure our economic model,” Dr Rezal says. He aspires to a future in which foreign and domestic investment can “live in harmony”, with FDI playing a role in starting a buzz and fostering user market acceptance, and DDI working to give workers control over local technologies and intellectual property. “This would be the way forward to harmonise the presence of multinational companies and local players,” he says.

Road ahead

Although Malaysia is currently focused on building up its production and manufacturing capabilities, it is not ruling out a future as a user-centric EV market.

NanoMalaysia is already investing in infrastructure to support the widespread adoption of EVs domestically, including by constructing charging stations and developing tax incentives to make EV purchases more attractive.

The nation may even start manufacturing its own EVs in the next five to 10 years, Dr Rezal says. After all, if the country is already producing the parts for EVs, piecing them together is a logical progression.

But for the moment at least, NanoMalaysia is set on being a provider of parts and carving out a space for itself and Malaysian industry in the Southeast Asian EV market.