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3 Steps to Build the Future of Electric Transport According to Volvo Car Malaysia

The future of electric vehicles (EVs) is built together. Adopting a new, landscape-changing technology like electric vehicles can only be successful when everyone plays their role in building the future of low-carbon travel. This involves multiple stakeholders, including governments, businesses, energy companies and consumers.

Sales of electric and plug-in hybrids reached 2.1 million in 2019, a whopping 40% year-on-year increase from 2018. In the same year, Volvo Car Malaysia saw a 10.76% increase in plug-in hybrid electric vehicle (PHEV) sales, and are expecting a growth of 31.5% in 2021. As it stands, it is predicted that there will be more than 140 million EVs on the road globally (excluding two/three-wheelers) by 2030.

Considering that EVs play a critical role in meeting climate change goals, that number is just 7% of vehicles on the road today. With a more sustainable focus, that number could rise to 245 million; but first, we need to tackle the barriers holding us back from the transition:


1. Planting the seeds – raising awareness among consumers:
The first step in this transition to electric mobility is raising awareness. Popular awareness and consumer demand will unlock the benefits of low-carbon vehicles. Government has an important role to play in this first step, as a respected independent voice that advocates for this change. Awareness is already growing in Malaysia, with 60-70% of cars Volvo sells in the country today being plug-in hybrids.


2. Enabling change – Government support lends confidence:
The second step focuses on creating the supporting infrastructure. Customers might be enthusiastic about purchasing their new EV, reducing their carbon footprint, and even spending less or eliminating petrol expenses, but without the charging infrastructure for EVs in place, they are likely to remain sceptical about the benefits of this transition.

Building this supporting framework is not just about the hard infrastructure of charging stations. It will also require a positive financial ecosystem supported and championed by government. Customers need certainty and visibility that the government will push the electric agenda, encouraging individuals to invest in this EV market structure.


3. Incentivising the industry – kickstarting the EV movement:
The final piece in this puzzle will be the financial incentives that promote the manufacturing and sales of cars within the automotive industry itself. At the same time, tax incentives to nudge consumers towards low-carbon transport will encourage the transition. Malaysia is currently doing well when it comes to roll out of electric vehicles; now is the time to intensify these initiatives.

 

 

The COVID-19 outbreak has revealed the importance of environmental protection.

 

 

 

 

 

 

 

 

The COVID-19 outbreak has also revealed the importance of environmental protection. During the lockdown, the air in populous cities like Delhi had cleared to such an extent that one could view the Himalayas many miles in the distance.

This period has shown what a low-carbon future might look like. Total daily emissions decreased globally by 17% during peak confinement in April. Surface transport such as cars represented almost half (43%) of that total.

COVID-19 will also make us more focused towards digitalisation. It is my belief that electrification is something that will continue growing at a stable pace. In fact, it may even accelerate faster than analysts predict, with this global crisis reemphasising the importance of sustainability.

It is crucial that companies also play their part. In Malaysia, Volvo has been assisting the government, especially the Malaysia Automotive, Robotics and IoT Institute (MARii), in collecting and providing data to support understanding and policy decision-making as and when it is requested.

Globally, Volvo has committed to becoming carbon neutral across its entire journey, from supply chain to products, by 2040. Auto companies should not just focus on building low-carbon cars, but on running a low-carbon business too. That reflects the history of a company which has always been committed to safety. It is not just about the safety of the passengers; it’s about the safety of our environment too.


Leading the Charge in Southeast Asia

Across Asia, countries like China, Thailand, and Malaysia are leading EV adoption in the region. In Malaysia, the government has been highly focused, enabling an impressive penetration of the plug-in hybrid. One of the big advantages of the Malaysian government is that they’re very open to engaging the automotive industry. They are proactive in coming to us and having dialogues with us on how they should incorporate policies and concepts to lead the country in the right direction in this area.

I think that’s a very positive aspect and it’s promising for industry players like ourselves when high-level players are receptive to engaging with the industry. Volvo works closely with governmental stakeholders to develop the EV agenda through initiatives like the National Automotive Policy (NAP). We are also a Council Member of the Malaysian Automotive Association (MAA) and are constantly in dialogue with governmental bodies on topics in the automotive industry, both as a member of MAA and as a standalone organisation.

Thailand similarly has created an encouraging market for EVs

Thailand similarly has created an encouraging market for EVs by simplifying its intended programme for customers. Through our conversations with Malaysia’s government, we have recommended adopting similar simplicity in this country. China is far more advanced, with the level of penetration being far deeper than Malaysia’s. It is my view that Malaysia, Thailand, and China are on a par with several developed countries, and possibly ahead in a few side areas in the EV market.

Besides these three countries, there is a lag in EV uptake across Asia. It is fair to say that Europe, from an awareness point of view, is ahead of Asia as a whole. Compared to countries in Europe – for example, Finland – EVs are more widely available on the roads than in the Asian region. The results are evident when world leaders such as Europe and the Scandinavian countries set much stricter targets to achieve lower carbon emissions across their operations.

Both investors and customers prefer brands and organisations which are purpose-driven

 

 

 

 

 

 

 

Another advantage that the European region has is the availability of EVs and supporting infrastructure. It is not only built physical infrastructure, but essential financial infrastructure that is required. For Malaysia to progress in this market, it is vital to make financing options available to consumers so purchasing EVs can be more accessible. This can be a short-term trial or loan concept that does not tie consumers into long-term deals. At Volvo, this is something we are already implementing.


Low Carbon Public Transport

A mass public transport system that is also sustainable is much needed for any nation’s development. But that infrastructure be developed in parallel with passenger vehicles. A lot of people prefer the flexibility of personal mobility – and this is highlighted even more with the COVID-19 situation, where people want mobility in their own way to ensure their own safety.

A lot of people prefer the flexibility of personal mobility.

 

 

 

 

 

The demand between public mobility and personal mobility must be managed in an extremely balanced manner to steer electrification in sustainably, through an approach that provides the right benefits. Ultimately this is about making a positive impact on the world, which can also benefit profit-driven businesses. People are looking to the future: today, both investors and customers prefer brands and organisations which are purpose-driven.

The next 10 years area going to see significant growth in electric vehicles. We will see rapid adoption of EVs in both public and private transport. Collaboration of key stakeholders will be essential in building this future, which means it is up to leaders to reflect the behaviour, actions, and decisions, to help steer a positive path forward.

Leaning into the Shared Climate Responsibility

Future initiatives cannot succeed without a collaborative effort between all stakeholders

We are realising as human beings that we cannot destroy the planet. This is a space where phenomenal business benefits will accrue, if a brand continues to stick to its purpose and build products around that purpose. When it comes to our sustainable future, everyone is an important player. Any future initiatives cannot be successful without a collaborative effort between multiple stakeholders, including all the players in the automotive industry.

There is no doubt that COVID-19 is also a challenging period for businesses, and a challenge that we cannot predict how long will last. We have worked very closely with our stakeholders, our employees, our factories, our dealers, and also our customers to keep our teams intact, and our motivation high – and I can safely say this approach ultimately will deliver phenomenal business results.

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