Wheels

This comes as Chinese automakers rapidly reshape the regional automotive landscape with competitive pricing and fast technological advances 

by AZALEA AZUAR 

THE race to electrify Malaysia’s automotive industry is accelerating, but the country may not yet be fully prepared for the transition. 

Despite growing investments from global electric vehicle (EV) manufacturers and rising consumer interest in electrified vehicles, experts at the 2nd Asean Automotive and Mobility Conference warned that Malaysia still faces major gaps in charging infrastructure, local research and development (R&D) capabilities, and long-term industry readiness. 

This comes even as Chinese brands rapidly reshape the regional automotive landscape. 

Building Local EV Innovation Capacity

The Investment, Trade and Industry Ministry (MITI) said Malaysia is poised to become a global hub for EV manufacturing. 

Global manufacturers such as BYD Auto Co Ltd had expressed confidence in the country by establishing operations at KLK TechPark in Tanjong Malim, Perak, the ministry added. 

Despite the optimism, experts warned that Malaysia may still lack sufficient EV engineering and R&D capabilities. 

During a panel discussion on technology trends in the automotive industry, Electric Vehicle Association of Malaysia (EVAM) president Datuk Dennis Chuah said this remains one of the key challenges facing the EV sector. 

He noted that many graduates were questioning whether there was a long-term career path in the industry. 

Chuah stressed that Malaysia and ASEAN must invest more heavily in EV R&D, particularly in battery technology and innovation, instead of relying on foreign players to drive advancements. 

There were opportunities for ASEAN to leverage its semiconductor expertise, particularly in Penang, to develop more efficient EV technologies such as compact, high-capacity chargers for electric two-wheelers. 

With ASEAN recording around 15 million vehicle registrations annually, alongside India’s 20 million yearly two-wheeler registrations, Chuah believes the region has significant potential to grow its EV ecosystem through local innovation and talent development. 

“There are so many opportunities for us to pursue, but we must look beyond merely adopting the technology. We also need to put in our efforts into R&D so that we can develop highly efficient products. 

“Electronics make up more than 50% or 60% of the entire vehicle, and this gives us an advantage because Malaysia has been export-oriented in semiconductors for almost 30 to 40 years,” Chuah said. 

ASEAN had spent the past decade working with governments and industry players to develop EV policies, technology roadmaps and over-the-air (OTA) regulations to support the sector’s long-term growth. 

According to Chuah, regional collaboration in R&D is crucial to ensure local industries can participate in EV innovation rather than relying solely on foreign automakers. 

He also highlighted battery technology as a key area for research. Battery energy density has improved from 100Wh/kg a decade ago to 250Wh/kg today, with expectations of reaching 500Wh/kg in the future. 

This shift would significantly change EV engineering and manufacturing processes, requiring new approaches beyond traditional welding and assembly methods.

On electric two-wheelers, Chuah said current products are still unable to compete with conventional combustion-engine motorcycles, while dedicated charging solutions for two-wheelers remain underdeveloped. 

The Better Option 

Despite the push towards EV adoption, experts believe hybrid vehicles are currently better suited to Malaysian consumers.

MCE Holdings Bhd Malaysia Group MD Dr Goh Kar Chun said hybrid vehicles currently play an important role in supporting the transition towards battery EVs (BEVs), especially as Malaysia’s charging infrastructure, affordability and consumer confidence are still developing.

“It allows the whole broader ecosystem, including companies like us and suppliers, to prepare while the industry gradually moves in that direction. 

“Our major concern as we look at the EV transition is that we have been working on different business models for the last 20 to 30 years.” 

Goh added that the shift to EVs was forcing suppliers to reassess whether their products and capabilities would remain relevant and competitive, as EVs require new load-bearing and electronic systems. 

Companies with strong electronics expertise, such as MCE, are better positioned to adapt to the transition, although the industry shift will ultimately create both winners and losers. 

Similarly, Proton Holdings Bhd deputy CEO and Auto Nexus Productivity chairman Datuk Abdul Rashid Musa said hybrid vehicles are a more practical solution for Malaysia. 

He noted that Malaysians drive about 28,000km annually, compared to 10,000km in China. 

“That makes hybrid a more reasonable solution for us compared to BEV. Nevertheless, Malaysia has a uniquely high motorisation rate, with many households owning a second or third car. So I think it is still an advantage for a second or third car to be a BEV,” he said. 

Malaysians also tend to travel longer distances during festive seasons, which can exceed the driving range of BEVs. 

Abdul Rashid also highlighted the cost difference between home and public EV charging, saying a B-segment EV costs about RM4 per 100km when charged at home, but around RM16 per 100km when using public chargers. 

By comparison, subsidised RON95 fuel under the Budi Madani RON95 (Budi95) programme costs about RM10 per 100km, suggesting that public charging costs remain a challenge for wider BEV adoption. 

EV Charging Network Still Lags

As of March 2025, there were only 4,161 charging bays nationwide, far below the government’s target of 10,000 units by the end of 2025.

BMW Group Malaysia MD Benjamin Nagel said newer EV models, such as the BMW iX with a range of up to 700km, were helping to address these concerns. 

He said BMW Group would continue investing in electrification after introducing its first plug-in hybrid electric vehicle (PHEV) in Malaysia in 2015. 

The automotive industry could not rely solely on electrified vehicles, stressing that highly efficient petrol cars would still be needed over the next decade. 

He added that BMW Group would maintain a technology-neutral approach by offering a mix of powertrain options to meet different customer needs. 

Meanwhile, Carsome Group chief business officer Aaron Kee said one of the biggest barriers to EV adoption was concern over long-term ownership value. 

He argued that many automakers focus too heavily on sales while neglecting after-sales support. 

Practices such as aggressive discounting, frequent model refreshes and weaker after-sales experiences can hurt consumer confidence and negatively affect resale values, ultimately influencing buying behaviour. 

“Brands that tend to offer heavy discounts and refresh their product cycle a bit too fast will eventually lead to poor consumer behaviour, which in turn also may affect the resale market,” he said. 

Amid the lack of charging infrastructure and concerns over battery life cycles, Kee expressed optimism about hybrid vehicles and PHEVs. 

He said demand is rising as consumers shifted towards more fuel-efficient vehicles following higher fuel costs and subsidy changes. 

Buyers are increasingly moving away from larger 2.0-litre and 2.5-litre vehicles in favour of hybrids and PHEVs, although supply remained limited. 

Carsome’s main challenge is sourcing enough vehicles at prices acceptable to both buyers and sellers. 

“But overall, while EV adoption is great, I think PHEVs and hybrids deserve much more attention to,” added Kee. 

China Overtakes Japan in EV shift

In his session titled ASEAN Perspective, PwC ASEAN Automotive Leader Patrick Ziechmann said Japanese brands continued to lose market share in Malaysia, falling from 57% at the end of last year to 54% in the first quarter 2026 (1Q26). 

He said established players such as Toyota Motor Corp are beginning to show signs of decline.

At the same time, he observed that Chinese automobile brands are rapidly gaining ground in Malaysia, increasing their market share to 15% in Q1, up six percentage points (pps) year-on-year (YoY) and 4pps higher than at the end of 2025. Ziechmann also spoke about developments in China’s automotive sector following PwC’s visit to Beijing. 

“We were able to observe the transformation from software-defined vehicles to artificial intelligence (AI)-driven vehicles, making them autonomous.” 

Companies such as BYD and Xiaomi Auto are increasingly positioning themselves as technology firms, while tech giant Huawei Technologies Co Ltd is also entering the automotive space. This reflects how quickly Chinese automakers and technology companies are converging. 

Ziechmann said these companies had successfully built a broad portfolio of brands at scale, something even some established global players have struggled to achieve. 

Traditional manufacturers such as BMW and Volkswagen are now trying to catch up with China’s rapid advances in automotive technology. 

These brands are also facing challenges related to speed, pricing and strong consumer nationalism in the Chinese market. 

Ziechmann said Malaysia’s electrified vehicle market, which includes BEVs, hybrids and range-extended vehicles, recorded a sharp increase in Q1, with adoption tripling YoY to 11% and surpassing the 10% threshold for the first time. 

In April, Proton posted strong sales performance in 1Q26 and its position as Malaysia’s leading EV brand through its Proton e.MAS line-up. 

Proton sold 49,140 vehicles in the first three months of 2026 (3M26), its highest quarterly sales since 2004, despite Malaysia’s overall automotive market shrinking. 

This was driven by strong demand for both its traditional internal combustion engine (ICE) vehicles and its expanding EV and PHEV range. 

Ziechmann acknowledged Proton’s success with its two Zhejiang Geely Holding Group Co Ltd-based technologies, namely the e.MAS 7 and the e.MAS 5. 

“They have very competitive pricing, very good technology and very good reviews in public domains,” he said. 

While Malaysia’s EV transition is accelerating, experts say the country must address gaps in charging infrastructure, local R&D and industry readiness to remain competitive. 

For now, hybrids and PHEVs are seen as the more practical solution for Malaysian consumers, while Chinese automakers continue to reshape the market with competitive pricing and rapid technological advances. 

Industry players say Malaysia’s long-term success will depend on its ability to develop local innovation, talent and supporting infrastructure, rather than relying solely on foreign technology and investment. 

• This article first appeared in The Malaysian Reserve weekly print edition

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ECARX Holdings Inc., a company backed by Chinese billionaire Li Shufu (picture), said it reached an agreement to deliver robotaxis to US startup May Mobility Inc., in a deal it valued at about $750 million.

Under the deal, Ecarx would deliver thousands of self-driving cars and design the computing platforms and sensor suites for the vehicles, according to a statement on Tuesday. That should help halve the all-in cost of May Mobility’s autonomous vehicles by 2028, it said.

Though America restricts the import of Chinese car technology, Ecarx has made moves to become compliant with US Information and Communications Technology and Services rules, a company spokesperson said. The vehicles and sensors will be built outside of China, the spokesperson said.

China’s dominance in electric vehicle supply chain and development of advanced driver assistance technology have boosted local robotaxi companies such as Baidu Inc., Pony AI Inc. and WeRide Inc. They have expanded globally and scaled their robotaxi fleets quickly as the cost of their vehicles is relatively low compared with those of rivals in the US.

For smaller players such as May Mobility, turning to a partner that has gained know-how from China is a quick way to grow its robotaxi fleet as competition with Alphabet’s Waymo and Tesla heats up. Waymo has also partnered with Zeekr, a premium EV brand under Geely Automobile Holdings Ltd. to produce its latest generation of robotaxi called Ojai.    

Although Ecarx’s headquarters are now established in London and Singapore, the Nasdaq-listed company has roots in China and counts Li, the founder of the Geely auto empire, as its largest shareholder. –BLOOMBERG

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VinFast Auto Ltd said its planned sale of two Vietnamese factories will enable the electric vehicle maker to shed about 182 trillion dong (US$6.9 billion or RM27 billion) in debt and obligations while potentially speed its path toward profitability.

“After restructuring, VinFast will essentially be debt-free, with only a small amount remaining,” the company said in an emailed statement responding to Bloomberg’s questions.

Founder Pham Nhat Vuong — who is also Vietnam’s richest man — said last month he expected VinFast to hit earnings before interest, taxes, depreciation and amortization breakeven point in 2027. The company declined to provide a timeline for reaching profitability after the spinoff, but said it expects to generate a profit in its domestic market in 2027, according to the statement.

“This is a strategic pilot model for VinFast,” the struggling EV maker said in the statement. “If the model proves effective, we will continue to scale and expand it. If challenges arise, we remain prepared to make the necessary adjustments.”

Under the restructuring announced May 12, VinFast will separate its manufacturing operations into a standalone company, effectively outsourcing production at its plants in the northern port city of Haiphong and the north-central province of Ha Tinh. The move would also allow the facilities to manufacture vehicles for other automakers, though VinFast said its own orders will be prioritised. It will retain its overseas production operations at factories in India and Indonesia.

The manufacturing operations are housed under VinFast Trading and Production JSC, or VFTP, and VinFast plans to transfer its entire stake in the unit — valued at about 13.3 trillion dong — to a buyer group led by Future Investment Research and Development JSC, with Vuong also participating as a minority investor, according to a filing.

Following the transfer, Future Investment will hold 95.5% of VFTP, while Vuong will own less than 5%. The buyer group will also assume borrowings, bonds, finance leases, payables and other obligations tied to VinFast’s manufacturing operations.

Future Investment, formerly known as Novatech R&D JSC, was spun out of VFTP last year to hold intellectual property assets before being sold to Vuong for about US$1.5 billion. Vuong later divested his stake in the firm. The filing lists Nguyen Hoai Nam as its majority voting shareholder.

Meanwhile, the restructuring could also ease the debt burden of parent Vingroup JSC, which has total debt of about 358 trillion dong, according to data compiled by Bloomberg. The transaction would allow the EV maker to generate “significant value for Vingroup”, instead of continuing to draw resources from the conglomerate, VinFast said in the statement.

VinFast reported a net loss of 97.25 trillion dong in 2025, widening 25.7% from a year earlier.

“Upon completion, the transaction could support VinFast’s transition toward a less asset- and debt-intensive operating structure,” Vietcap Securities JSC wrote in a note. “The transaction may also help improve Vingroup’s balance-sheet risk perception.”

To be sure, the restructuring may not fully insulate the broader Vingroup ecosystem from manufacturing-related risks, given VinFast’s operational links to the spun-off entity and the involvement of Vuong — also founder and chairman of Vingroup — in the buyer consortium. VinFast still faces challenges expanding overseas as well in an increasingly crowded EV market dominated by Chinese rivals, while scaling back plans for a North Carolina factory that is now expected to be smaller than originally envisioned.

The deal is expected to close by the third quarter, subject to shareholder and creditor approvals. — BLOOMBERG

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by ALISSYA ZUNIZAM

UMW Toyota Motor (UMWT) recorded sales of 6,464 units in April 2026, bringing its cumulative sales for the first four months of the year to 21,924 units as the company continued expanding its electrified vehicle offerings in Malaysia.

In a statement today, the company said the performance was supported by continued product activity, wider mobility choices and stronger ownership support.

UMWT said it is accelerating its electrification direction through Toyota’s Multi-Pathway approach with a wider range of Hybrid Electric Vehicles (HEVs) and Battery Electric Vehicles (BEVs) tailored to different customer needs.

The electrified models include the Toyota bZ4X, Urban Cruiser BEV, Hilux BEV and the all-new Yaris Cross B-SUV.

UMWT president Datuk Ravindran K. said the company’s Multi-Pathway approach aims to provide wider mobility choices that are practical and accessible to Malaysians with different lifestyles and usage needs.

“Whether it is (HEVs) for customers seeking greater fuel efficiency and convenience in daily driving, or (BEVs) for those ready to transition towards fully electric mobility, our goal is to offer solutions that fit how Malaysians live, commute, and travel,” he said.

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HONDA Motor Co. forecast a rebound in operating profit for the current fiscal year, even after an ill-timed bet on electric vehicles led to a writedown and a record loss.

The manufacturer of cars and motorcycles sees profit of ¥500 billion ($3.2 billion) for the period ending March 2027, higher than the consensus estimate of ¥212.4 billion. It posted a ¥414.3 billion shortfall during the previous year, its first annual loss since it was founded in 1948.

The Japanese carmaker has struggled to keep up with intense competition as the global automobile industry shifts toward electrification and automation. Honda has insufficient models to tap into renewed demand for gas-electric hybrids in the US, while in China local brands churning out EVs have all but taken over what is now the world’s largest car market. 

The onus now falls on Chief Executive Officer Toshihiro Mibe to stem further losses and stabilize Honda’s automobile business before it becomes too much of a burden for its more profitable motorcycle unit.

“The management group there has been shielded too long by a super profitable motorcycle business that allows them to push problems with the automotive business under the rug,” said Christopher Richter, a senior analyst at CLSA Securities Japan. “The motorcycle business has become a crutch for Honda that prevents them from taking a serious look at their automotive business.” 

Almost one in three motorcycles sold globally carries the Honda badge. The unit generates a majority of the company’s operating profit despite accounting for less than a fifth of sales. 

A host of geopolitical challenges — war in the Middle East, US tariffs and a shortage of Chinese semiconductors — have only added to the challenges faced by global carmakers as they navigate the transition toward EVs and software-focused development.  

Honda first sounded the alarm of a costly slowdown in EV demand in early February. Soon after that it warned of a massive impairment charge that led to it scrapping plans with Sony Group Corp. to co-develop EVs just months before the first vehicles were set to roll off production lines. 

Honda said in March that it’s looking to strengthen its hybrid-vehicle lineup by reallocating resources and streamlining products so that it can raise production, especially in North America. It’s also aiming to enhance its business in India, which is a growth market both for cars and motorcycles. –BLOOMBERG

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RAWANG — Perusahaan Otomobil Kedua Sdn Bhd (Perodua) intends to produce the Ativa hybrid model locally, said its president and chief executive officer Datuk Seri Zainal Abidin Ahmad.

He said the company is finalising discussions, including production time and pricing, among other details.

“Once we finalise all those items, we will make a proper announcement at a later date.

“Rest assured, the hybrid of this Ativa model will be produced locally,” he said at a press conference, in conjunction with Japan Ambassador to Malaysia Noriyuki Shikata’s Perodua factory tour, here today.

Perodua Ativa is a compact five-seater B-segment sport utility vehicle (SUV) introduced in March 2021, marking Perodua’s first model equipped with a turbocharged engine and continuously variable transmission (CVT).

Built on the Daihatsu Rocky and Toyota Raize platforms, the vehicle is powered by a 1.0-litre turbo engine and comes with advanced safety features.

For the Ativa hybrid project, Zainal Abidin said Perodua received about 1.5 billion yen (more than RM37 million) from the Global South Fund to support Japanese hybrid technology in Malaysia. 

Regarding plans to collaborate with Daihatsu on electric vehicle development, he said that the first step is to stabilise the infrastructure and charging station requirements in Malaysia.

“We still have a problem because of the few charging stations in the country,” said Zainal Abidin.

Daihatsu, a Japanese compact car company, holds a 20 per cent share in Perodua. — BERNAMA

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by ANN ZAINUDDIN

THE Transport Ministry (MOT) is studying autonomous vehicle technologies as part of broader efforts to modernise Malaysia’s logistics and transport ecosystem, including long-term reforms to strengthen supply chain efficiency.

Transport Minister Anthony Loke said any deployment of autonomous vehicles in Malaysia would require a clear legal and regulatory framework before implementation can be considered.

“We are engaging with industry players on future mobility solutions, but regulation must be in place first before any deployment,” he said at the launch of the Malaysia Commercial Vehicle Expo (MCVE) today.

He added that logistics and commercial transport remain critical to national economic stability, and disruptions in the sector could have wider spillover effects on trade and supply chains.

“The logistics sector is a backbone of the economy. Any disruption will directly impact trade flows and overall economic performance,” he said.

Driver shortages, Loke highlighted, remain a persistent structural challenge for the industry, while fuel subsidies are still being used to manage transportation costs in the interim.

The government is also looking at international examples, including China, where logistics and delivery ecosystems are already adopting advanced mobility technologies at scale.

Loke also explained that the government is also not only focusing on current challenges but also on how the logistics sector will develop over the next decade.

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by ANN ZAINUDDIN

THE Transport Ministry (MOT) will table new proposals at the upcoming Electric Vehicle (EV) Task Force meeting next week to accelerate the adoption of electric trucks in Malaysia, as the government moves to expand its electrification agenda beyond passenger vehicles.

Transport Minister Anthony Loke (picture) said Malaysia is still at a very early stage of EV truck adoption, with fewer than 10 units currently operating nationwide, while costs remain a major barrier for logistics operators.

“The reality is EV trucks are still two to three times more expensive than diesel trucks, and that is a significant hurdle for small and medium enterprises (SME) and logistics players,” he said at the launch of the Malaysia Commercial Vehicle Expo (MCVE) today (May 14).

The government is now considering targeted incentives, including tax exemptions, to reduce upfront investment costs and encourage fleet conversion.

“We are looking at incentives because we want to encourage adoption, not force it. This is a carrot rather than a stick approach,” Loke said.

He added that Malaysia is also studying China’s experience, where electric trucks have already become mainstream as part of efforts to reduce diesel dependence.

Meanwhile the local assembly of electric trucks using the completely knocked down (CKD) method is also encouraged to strengthen domestic industry participation.

The transition, Loke said, is closely tied to Malaysia’s long-term climate commitment.

“At the end of the day, this is linked to our net-zero emissions target by 2050. We need to start preparing the transport sector now,” he added.

Loke also stressed that Malaysia is currently spending more than RM2 billion monthly on diesel subsidies, which is becoming increasingly difficult to sustain.

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