KUALA LUMPUR - Proton’s first electric vehicle is expected to go on sale in December, as Malaysia’s national carmaker takes the fight for market share to Tesla and Chinese brands including BYD.

The e.MAS 7 has a sleek design with body contours similar to that of the BYD Atto 3, a 150kW compact electric crossover, but is expected to have a smaller price tag.

It could cost around RM100,000 (S$30,150), according to industry observers.

The Atto 3 is sold at around RM149,800, while Tesla’s cheapest EV in Malaysia, the 208kW Model 3, is priced from RM181,000.

“Our goal with the Proton e.MAS 7 is to fulfil our promise of delivering Malaysia’s first national all-electric vehicle. With the groundbreaking technology embedded in it, we are confident it will not only impress with its innovative breakthroughs but also deeply resonate with our audience on an emotional level,” Proton CEO Li Chunrong said at a media preview of the EV on Aug 2.

Malaysia’s EV market is still at a nascent stage. The higher price points of these electric vehicles and concerns about the lack of charging stations outside major cities are deterrents for buyers.

In the first six months of 2024, a total of 12,850 EVs were sold in the country, a 150 per cent surge from the same period in 2023. But that is just 3.3 per cent of the 390,269 total vehicle sales in that period.

A total of 720,658 vehicles were sold in the country in 2022, and 799,731 in 2023, figures released by the Malaysian Automotive Association showed.

Malaysia has a target of having EVs, including hybrids, account for 15 per cent of the total industry volume by 2030.

Like most other markets, Malaysia’s EV market is being flooded with EVs from China. Apart from BYD, those that have entered in the last few years include Chery, Great Wall Motor and MG.

And Proton’s e.MAS 7, after it is launched, will not only be facing off against foreign EV models, but in the near future, also against one from Perodua, the second Malaysian national carmaker.

Perodua’s model, reportedly named the eMO-1, is slated to be launched at the end of 2025, with an expected price tag of between RM50,000 and RM100,000.

In fact, Proton’s main rival is not any of the foreign car brands, but Perodua.

Proton in total sold 150,975 vehicles locally in 2023, out of nearly 800,000 cars in total, compared with Perodua’s sales of 330,325 cars.

Perodua’s compact sedan Bezza and the Axia and Myvi hatchbacks are Malaysia’s top three best-selling car models – in the first half of 2024, these cars sold 47,100 units, 42,900 units and 34,688 units, respectively.

Proton’s best-selling model, the Saga, is at fourth place with 34,035 units sold in the same period.

Since May 2017, Proton has been 49.9 per cent owned by Chinese carmaker Zhejiang Geely Holding Group. The Malaysian carmaker was in the red when Zhejiang Geely bought the stake for RM460.3 million.

In 2016, Proton’s sales fell 29 per cent, from around 102,175 units in 2015 to 72,290 units in 2016. The total number of cars sold in Malaysia in 2015 and 2016 was 666,674 and 580,085, respectively.

The Chinese group quickly brought in its Geely SUVs, rebadged them as Proton X70 and, later, the smaller X50, which today dominate the Malaysian SUV market.

These are priced much lower than similar-sized rivals such as the Honda CR-V and Honda HR-V, respectively. For example, the price of an X70 starts from RM98,800, while the CR-V starts from RM159,900. (Geely cars are not sold in Malaysia.)

Proton sales have since been steadily exceeding 100,000 units annually for six consecutive years.

The Malaysian carmaker was launched in 1983 as a national car project by then-premier Mahathir Mohamad, with minority shareholder Japanese giant Mitsubishi Group.

It was part of his grand industrialisation plan for the country to mimic the success of Japan and South Korea.

Proton was quite successful in its early years with the rebadging of old Mitsubishi sedans.

Sales of its first car, the Saga, launched in 1985, outstripped supply; by 1986, it had gained 64 per cent of the domestic market for cars below 1600cc.

“Proton was created to build a Malaysian automotive industry, connect the Malaysian automotive industry to the global industry, and to promote Malaysia to the world,” independent transport consultant Moaz Yusuf Ahmad told The Straits Times.

“While Proton has achieved these goals, it could not sustain them on its own.”

In Proton’s early years, Malaysian leaders kept a strong grip on the company, maintaining its “Malaysian carmaker” status while trying to expand the Proton and Malaysia brand internationally, said Mr Moaz.

“But as Proton began facing local and international competition and losing money, it could not sustain a strong presence and share in international markets,” he said.

In its 40-year history, Proton has exported its cars to as many as 70 countries. It currently has a presence in 20 export markets, including Brunei, Egypt, South Africa and Nepal.

But its exports have always been weak. In 2012, the carmaker sold around 20,000 units abroad. This fell to 248 units in 2017, before recovering to 5,406 vehicles in 2022.

“The success of Proton is generally driven by the domestic market,” said Dr Mohamed Eskandar Shah, associate professor in Islamic finance from Qatar’s Hamad Bin Khalifa University, who specialises in finance and economics including the automotive sector.

Proton has yet to become a household name beyond Malaysia, with much of its revenue driven by local demand, he noted.

Even though Geely owns 49.9 per cent of Proton today, it is still a Malaysian-owned company, Mr Moaz said. Malaysian conglomerate DRB-HICOM owns the remaining 50.1 per cent stake in Proton.

The value of the investment from Geely is significant for Proton and Malaysia as long as the investment in the Malaysian automotive industry and technology, local research and development as well as jobs continues, Mr Moaz added.

“It’s now time to invest in turning Proton around by focusing on building industrial capacity, improving vehicle design and building for a sustainable industry,” he said.

The carmaker needs to push for local consumption, the creation of better infrastructure for EVs in Malaysia, and leverage its partnership with Geely in terms of technology transfer, analysts say.

Automobile reviewer and content creator Tai Choo Yee told ST that Proton has an edge over Perodua, in vying for business against their foreign EV counterparts.

“Proton can tap its partnership with Geely, which also has a stake in Volvo,” he said, noting that the Chinese and Swedish manufacturers have had years of expertise in producing multiple EV models.

In contrast, he said, “Perodua’s R&D in the EV market is almost starting from scratch, without a foundation”.

Perodua is 38 per cent owned by local company UMW Corporation and 25 per cent owned by Japan’s Daihatsu. Its other main shareholders are local firm MBM Resources (20 per cent), Malaysian fund manager Permodalan Nasional (10 per cent), and Japan’s Mitsui & Co (7 per cent).

Datuk Shahrol Halmi, president of the Malaysian Electric Vehicle Owners Club, said expectations that local manufacturers Proton and Perodua will deliver affordable EVs to the masses have to be tempered.

“There is a lot of expectation on the home-grown EV manufacturers, but these expectations need to be managed. The local manufacturers will not have the same efficiency in supply chains and manufacturing scales as the Chinese manufacturers do,” he told ST.

“It is crazy how intense the competition in China is, such that they have very decent products for RM40,000 to RM50,000 with decent range, but I don’t think the local manufacturers will be able to reach that (price point) so soon.”

Proton’s prices are likely to affect its sales.

“My next car purchase will be an EV. I think it’s better for the environment,” housewife Janice Liew, 56, told The Straits Times. “I will probably buy a BYD for its reputation but I would also consider Proton if the price is attractive,” she said.

Said academic Dr Mohamed Eskandar: “The survival of Proton very much depends on how well they can adapt to the EV technology, because this will be the future, whether we like it or not. I think any company which is not able to embrace this, will be left behind,” he said. 

• Additional reporting by Lok Jian Wen