Proton will start selling EVs in Malaysia but it isn’t a Proton. Here’s why it’s a missed opportunity

On the 19^th of January 2022, Proton Holdings Bhd signed a Memorandum of Agreement (MOA) with Smart Automobile Company to be the official importer, distributor, and dealer of Smart vehicles in Malaysia and Thailand.

CEO of Smart, Tong Xiangbei said the partnership with Proton will allow them to enter the Malaysian and Thai automotive market with minimal investment. The MOA outlines that Proton Edar will establish a robust sales and service network, experience center, sales outlets by Proton Edar, and after-sales service for Smart vehicles in Malaysia and Thailand.

Proton to sell Smart vehicles in Malaysia and Thailand

Syed Faisal Albar, Chairman of Proton said, “With the signing of the MOA, Proton is taking its first steps on its New Energy Vehicle strategic journey. By collaborating with smart, we will be able to gain experience in the selling, servicing, and charging of NEVs and build up the skill sets we require to be a force in ASEAN’s rapidly expanding NEV sector. This is also an opportunity to tap on smart’s customer base, which will open up more opportunities for the Proton brand,”

Now, despite Syed Faisal Albar and Proton’s press briefing mentioning ASEAN markets, there is no word if the Smart vehicles will be introduced in other ASEAN markets by Proton Edar. Proton themselves stated at the end of the press release that there are no plans to collaborate beyond the tenets of the agreement. Therefore, the availability of Smart vehicles in other markets is uncertain at this point.

Who is Smart Automobile Co?

The company started out as Smart, an automotive project from the popular Swiss watch company, Swatch. They partnered with Daimler, parent company of Mercedes-Benz in 1982 to build a car that Swatch was developing. The name Smart derived from the name of Swatch and Mercedes-Benz – Swatch Mercedes ART – back in 1994. This came after the 2 parties wanted a neutral name for the brand. Mercedes parent company, Daimler, who was the majority stakeholder, designed and built the cars. Eventually, they bought over all Swatch’s stake in the company to become a wholly owned subsidiary of Daimler.

These Smart cars under Daimler were sold in Malaysia for a period of time. They were sold in their own showrooms, separate from Mercedes-Benz. Models like Smart ForTwo, Smart ForFour and Smart Roadster were offered to Malaysians. However, sales of smart cars were less than stellar globally and incurred heavy losses for Daimler. As a result, Smart and all its operations were liquidated.

Then in 2019, Daimler announced a partnership with Geely. The outcome of the partnership was Smart Automobile, an equally owned company. The plan is to produce a range of EVs under the smart brand that will be built in China and exported globally. These cars will be known as new energy vehicles (NEV) as branded by China for electric vehicles.

If you’re curious to know which Smart Automobile model might be offered in Malaysia, Proton did share photos of the Smart Concept #1 in their press briefing. It could be a hint, or on the other hand, Proton could have just added the pictures to spice up their press release. We’ll have to wait for more information on which model will be sold here. As for the Concept #1, despite having the word “concept” in its name, the futuristic looking car below will be going into production some time in the future.

Missed opportunity to launch Malaysia’s first national EV car

To be clear, Proton Edar will be the distributor of vehicles built and manufactured by the Smart Automobile company. This partnership will not see Proton building “smart” EVs of their own, at least not for the time being. This to me is a missed opportunity by Proton to introduce the first national EV car like how the Proton Saga was the first national vehicle. This could have been easily done now since Proton has access to Geely’s resources. Proton could have made plans to introduce Geely’s Emgrand EV in Malaysia. Yes I know, it would be just a rebadge and not Proton’s own EV, but there’s an argument to be made that Proton would learn more about EVs by selling and manufacturing a rebadged Geely EV.

This would open up opportunities for our local engineers and designers to tweak aspects of the car to acclimate the car to the Malaysian market. The Proton X70 and the Geely Boyue it’s based on is very different because our local talents made some changes for the Malaysian roads. The locally assembled Proton X70 has subtle design changes, suspension that was tweaked for local roads, and mecahnical changes to suit our hotter climate. They also took what they learned from the X70 and trickled it down to the Saga, Iriz, and Persona which you can see from the recent facelifts.

Just like how the X70 went from fully imported to locally assembled, a rebadged Proton EV could have gone through the same process. This would have been a great way for Proton to extensively learn about EV systems, while equipping our local workforce with the skill set required to manufacture EVs. With this knowledge and know how, it might have lead to Proton creating a locally designed and manufactured EV in the form of a Proton Saga EV or Proton Persona EV.

Being a little ambitious here, if Proton does make EVs that are affordable and owned by the masses, the demand will drive expansion of EV infrastructure in the country. They would have invested big in local EV Charger companies like ChargeEV, or at the very least, get Geely to bring in their Zeekr Power EV charging network and service. With these infrastructures in place, it would convince more carmakers that Malaysia is an EV ready country. To compete with Proton, they will choose to locally assemble their EVs to meet the demand. As a result, Malaysia would have joined the likes of Thailand in becoming an assembly hub for EVs in Southeast Asia.

But instead of aiming to give Malaysia its first national EV, they are planning on being an importer and distributor of an EV which is designed and manufactured in China. There is some facts in what Syed Faisal Albar said about Proton gaining experience in selling, servicing, and charging EVs from this partnership, which will build the skill set required for future EVs from Proton. However, wouldn’t that be too late? The EV market is advancing at a rapid rate. If you’re just going to watch and learn instead of getting hands on experience of actually producing EVs, Proton is going to be doing a lot of catching up and less leading the way.

Another lingering question is whether these vehicles will be rebadged as Proton vehicles. That is highly unlikely, since Smart Automobile wants to establish themselves as a premium automaker and want recognition as a premium brand, they will likely use their own badge anywhere they can.

But why is Geely trying to sell Smart EVs in Malaysia now?

It’s surprising to see Geely taking an interest in the Malaysian EV market today when in 2019, during the launch of Geeley’s EV brand Geometry in Singapore, a representative from the company was skeptical about the EV market in Malaysia. Victor Yang, Vice President of Public Relations of the Zhejiang Geely Holding Group told SoyaCincau that the Malaysian government had not reached a consensus to widely promote EVs. He proceed to tell us that before Geely can make electric cars available in the country, the country needs to be ready in terms of infrastructure for the cars and incentives for the manufacture, supplier and buyers.

However, we did comment that there is an interest in EVs among Malaysians. It was the Government that was not clear on where it wants to go with regards to new energy transportation like electric vehicles.

Fast forward to 2022 and Budget 2022 introduced tax breaks for EVs in Malaysia. Taking the Porsche Taycan as an example, it was slashed to RM508,000 from RM584,561. Yes, at the moment, it primarily benefits the rich, because there are no affordable EVs to take advantage of this incentive. There are more cheaper options coming in such as the Hyundai Kona electric but it is still too expensive for the regular Malaysian.

Other green energy tax incentives that have been introduced since Victor’s comment during Geometry’s launch in Singapore are Green Income Tax Exemption (GITE), Green Technology Financing Scheme (GTFS) and Green Investment Tax Allowance (GITA).

As for the charging infrastructure for EVs, the progress has been slow. As of 2021, there are 500 public AC charging stations and only 9 public DC fast charging stations in Malaysia. Compared to Thailand’s 1406 charging stations and a whooping 771 DC fast charging stations, Malaysia is way behind in the EV game. Before Proton Edar introduces Smart’s EVs in Malaysia, they first need to bring the charging station numbers up, especially the number of DC fast chargers.

BMW recently signed a Memorandum of Understanding with key partners to improve and expand the charging infrastructure. This is the only way if they wish to sell their future EVs in Malaysia.

Other companies like Shell are starting to introduce DC fast chargers in Malaysia. However, at the moment, their pricing structure seems to indicate it’s only for premium EV buyers. Furthermore, there is only 1 station currently operational in Tangkak, Johor. They have plans to build one more in Muar, Johor and 2 each in Negeri Sembilan and Perak. Although this is still not enough and is way behind Thailand’s numbers.

Therefore, it seems that Malaysia is starting the process of expanding its EV infrastructure. However, it still in its early stages and it’s not ready for widespread adoption. Neither Proton nor Smart Automobile outlined any plans to expand the charging network by either building new ones or investing in current ones in the MOA. Hopefully we hear more details on this matter soon.

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