MALAYSIA’S automotive sector should receive an injection boost with the speeding up of the policies involving the electric vehicle (EV) policy.
MIDF Research said enhancements to the National Automotive Policy are being carved as a low carbon pathway with International Trade and Industry Minister Datuk Seri Azmin Ali indicating that the Government is in the process of studying more incentives to encourage EV ownership and development of related infrastructure.
“This includes road tax exemption, income tax relief for EV purchases and tax relief for EV charging station installations,” opined analyst Hafriz Hezry in an automotive sector update.
“In addition to these, a prior draft on Low Carbon Mobility Blueprint (LCMB) by the Environment and Water Ministry which encompasses a low carbon policy proposal for the broader transport sector highlighted several key incentive proposals for EV adoption.”
The proposals include:
- Excise duty exemptions for completely built-up (CBU) Battery EV (BEV) and completely knocked down (CKD) Plug-in Hybrid EV (PHEV) with gradual normalisation up till 2030;
- A target of 7,000 AC and 500 DC charging stations whereby 2,000 AC and 200 DC stations will be Government-funded.
- A public tender for a national fast charging network, accompanied by Green Income Tax Exemption scheme until 2030.
- Setting BEV penetration target of up to 50% by 2026-2030 for Government and government-linked company (GLC) fleet.
- An e-bus central procurement agency involving a revolving fund of RM450 mil for e-bus competitive leasing.
- Tax incentives under Green Investment Tax Allowance for delivery operators’ purchase of electric two-wheelers (e2W).
- Development and implementation of battery swapping standards for e2Ws by 2023.
All-in-all, MIDF Research maintained its “positive” outlook on the automotive sector given its potential as a play into the reopening theme.
Some of its top picks include UMW Holdings Bhd (“buy”, target price: RM4.35), Bermaz Auto Bhd (“buy”, target price: RM2.35) and MBM Resources Bhd (“buy”, target price: 4.30). – Oct 8, 2021
