Malaysia sees surge in investments for EV sector

Malaysia is seeing a spate of investments into its electric vehicle (EV) industry, with the latest being Japanese firm NHK Spring's decision to expand its metal substrate production in Malaysia following Malaysia's latest trade mission to Japan.

NHK Spring produces metal-based printing wiring boards — a metal substrate essential to the electrification of automobiles — in Malaysia's state of Negeri Sembilan. The construction of a new plant and facilities is expected to be completed by December, according to the Malaysian Investment Development Authority's (MIDA) announcement on 2 June, although the capacity was undisclosed.

Prior to the Japan trade mission, Malaysia's trade missions to South Korea and China in March and April, respectively, similarly generated interest in foreign direct investment across different sectors.

EVE Energy Malaysia, a subsidiary of major Chinese lithium-ion battery manufacturer EVE Energy, on 12 May signed an initial agreement with Malaysian firm Pemaju Kelang Lama to invest $422.3mn in building a cylindrical lithium-ion battery factory in Malaysia's state of Kedah. The factory will spearhead the development of an "International Cylindrical Battery Industrial Park", with the main focus on cylindrical lithium-ion batteries for power tools and two-wheeler EVs. Its production capacity was not disclosed.

South Korean battery and semiconductor materials producer SKC is exploring the possibility of making additional investments in the EV industry in Malaysia. "Malaysia is a strategic location for rapid global expansion of EV investments as it has started to develop the necessary infrastructure and materials to support the expansion of EV battery production," said chief executive of the company's SK Nexilis unit, Jae Hong Yi.

Lotte EM Malaysia, a subsidiary of South Korean conglomerate Lotte, is investing around 2.3bn ringgit ($503mn) to introduce electro-deposited copper foil into lithium-ion batteries, according to MIDA's announcement on 29 May.

The acceleration in EV and EV-related investments throughout Asia has brought to light the potential the region boasts, and Malaysia is emerging as a key manufacturing and consumption market.

"EVs are the intuitive solution for low-carbon mobility and zero-emission vehicles, and the nascent global EV industry provides significant room for growth, particularly in ASEAN, which has the potential to be both a manufacturing hub and market for EVs," said the country's minister of investment, trade and industry, Zafrul Abdul Aziz during Malaysia's first national level EV conference held on 14 February.

"[The Ministry of Natural Resources, Environment and Climate Change] NRECC has taken into account the importance of balancing energy demand and reducing carbon emissions, and this includes the development of EVs and its ecosystems in Malaysia," said NRECC minister Nik Nazmi Nik Ahmad.

"The country aims to install 10,000 EV charging points by 2025 through the Low Carbon Mobility Blueprint, with up to 900 charging points at present. NRECC is also committed to increasing electricity generation from renewable energy sources through the Electricity Supply Generation Development Plan 2021-2039 while strengthening the grid and developing the EV ecosystem," he added.

MIDA approved 54 EV and EV-related projects totalling 22bn ringgit from 2018 to 2022, which includes EV assembling, manufacturing of EV parts and components as well as its charging components.

By Joseph Ho