Tesla will not pose any meaningful threat to local auto players – Kenanga Research
21 Jul 2023
Tesla’s all-electric sports utility vehicle (SUV) Model Y is likely to be well-received domestically but its entry is not expected to to pose a meaningful threat to the local automotive industry over the immediate term, according to Kenanga Research.
It said the Model Y is competitively priced at RM199,000 to RM288,000 versus its competitors in the compact SUV segment and has a low financing rate.
“(However,) more than 70 per cent of vehicles sold locally carry a price tag of less than RM100,000, including close to 40 per cent under the RM50,000 mark,” the research house said in a note.
The electric vehicle (EV) is still far from being an affordable price range to fully replace internal combustion engines (ICE) vehicles, it said.
“From the lack of EV charging stations to the lack of a holistic strategy in building up a robust EV ecosystem, ICE will still be in dominance,” Kenanga Research said.
It noted that Perodua, which controls almost 50 per cent of the local industry’s total industry volume (TIV), will first focus on hybrid cars (expected to launch at below the RM70,000 mark) to build up the local expertise and gradually transition vendors capacity towards localising the key components of EVs, including battery, inverter and motor.
It said the car maker has indicated that to launch affordable EVs, there is a need to have a robust localised EV parts supply ecosystem.
Kenanga Research said Bermaz Auto, meanwhile, has indicated that it will monitor the development of the EV ecosystem closely in tandem with the national brand’s commitment and will compete with other EV brands by launching various new completely built-up (CBU) EV offerings.
These include Mazda MX-30, Kia EV6, Kia Niro EV and Peugeot e-2008, which are much newer models compared to the Tesla Model Y.
Kenanga Research also said Tesla’s presence in Malaysia is expected to create skilled and better-paying job opportunities in the battery EV segment and increase the participation of local companies in the ecosystem.
“(It will) strategically leverage on Malaysia electrical and electronics ecosystem to make Malaysia the preferred investment destination for technology related to low-carbon mobility,” it added.
Tesla has unveiled a comprehensive development plan for experience centre, service and support, and charging infrastructure in the country, aimed at delivering a seamless ownership experience and building an EV “supercharger” network of at least 50 Superchargers within three years from the current 10 chargers, with at least 30 per cent of them usable by other brands.
Maintaining its 2023 TIV projection of 720,000 units that will match the record level achieved last year, Kenanga Research said a new car is still an affordable luxury for most Malaysians despite the high inflation and a slowing global economy.
Its forecast is 11 per cent higher than the 650,000 units projected by the Malaysian Automotive Association in January this year.
The research house said its optimism is underpinned by the strong consumer confidence supported by a stable economy and a healthy job market; the affordability of motor vehicles amid stable new car prices, thanks to the deferment of new excise duty regulations; and attractive new models.