China-based BYD, which dethroned Tesla in the fourth quarter as the global top electric vehicle maker, plans to have up to 40 showrooms across Malaysia by the end of this year.

The Warren Buffett-backed company is in the process of opening showrooms in the country where the government has been pushing for more adoption of EVs and wooing more EV-related investments in Malaysia.

BYD has appointed Sime Darby Motors as the official exclusive distributor of BYD vehicles in the country, according to a statement in December 2022.

Sime Darby Motors is the automotive arm of Malaysia-listed conglomerate Sime Darby Bhd and is involved in the retail, distribution and assembly businesses. The company has a presence in nine markets across the Asia Pacific region. It was reported that MYR500 million ($107.53 million) will be invested to set up BYD showrooms in Malaysia.

“By end-2023, with the support of dealer partners, Sime Darby Motors and BYD expect to bring the number of showrooms in the country to between 15 and 20. In 2024, we aim to double this number by establishing our presence across all states in Malaysia to ensure wider customer service coverage. Hence, BYD customers can be rest assured that they will be able to travel throughout Malaysia with the wide coverage of BYD’s network,” a spokesperson from Sime Darby Motors told TNGlobal in an email interview.

As of last month, BYD already operates 14 showrooms in Malaysia.

“There continues to be growing demand for EVs amongst Malaysians, especially with the increasing line-up of EV vehicles in the market,” the spokesperson said.

“This is further demonstrated by the positive response for the launch of EV models across Sime Darby Motors’ portfolio of world-class principles. The EV sector is projected to see steady growth, supported by the Malaysian Government’s incentives. We believe BYD’s innovative vehicles will be well-received by Malaysian consumers as EV adoption continues to pick up,” Sime Darby Motors said.

BYD’s assertive expansion into Malaysia and Southeast Asia coincides with a broader trend of escalating competition and dwindling profits for automakers in China. Besides automakers, Chinese tech giants such as Huawei and Xiaomi have also introduced EV models. Concurrently, the Malaysian government actively promotes EV adoption, seeking foreign investment to develop the EV sector.

US-based EV giant Tesla has set up its regional headquarters in Malaysia last year. The country also has plans to woo more EV companies to set up assembly plants here, trade and investment minister Tengku Zafrul Aziz said in an interview with CNBC last week. Currently, many EV makers are procuring components from Malaysia “in the billions”, he said, adding that Malaysia is doubling down on the semiconductor industry to tap the growing EV market.

Competition has also heated up in Southeast Asia as Malaysia, Indonesia and Thailand have aspired to become the main player or a hub in the global production and supply chain of EVs.

As the world’s biggest seller of battery electric vehicles (BEVs) eyes expansion globally, BYD recently announced that it will launch its cars in Indonesia this week. The launch also comes amid efforts from Indonesia to accelerate EV adoption in a bid to reduce emissions, Reuters reported.

BYD is also accelerating its overseas footprint by setting up production facilities in Brazil and Thailand (with an annual production capacity of 150,000 units each) and expanding its sales network in Europe, according to DBS Group Research. The company is shipping several models including Dolphin and Atto3 models abroad and will add more to the export list. The overseas market generates better margins, DBS Group Research analyst said in a note.

But expansion to overseas market may not always be smooth sailing. Quoting sources, Reuters reported on Friday European Commission investigators are to inspect Chinese automakers in the coming weeks as part of a probe into whether to impose punitive tariffs to protect European EV makers. The inspectors will visit BYD, Geely, and SAIC, two sources told Reuters.

As comparison, in Southeast Asia, a significant driver accelerating the rapid growth of the EV market is the region’s strong commitment to reducing fuel emissions and improving road safety, investment platform AsiaFundManagers.com reported in August 2023. In addition, pivotal to this momentum of EV adoption is governmental regulatory support and early investments in the sector, the report added.

Besides BYD, several Chinese car makers such as Great Wall Motor have been expanding their footprint in Southeast Asia. Great Wall Motor announced last week that it has started commercial production in Thailand, Nikkei Asia reported.

Chinese state-owned automobile manufacturer SAIC Motor has also announced in May last year that it has started construction of the SAIC Motor-CP New Energy Industrial Park in Thailand. The industrial park is expected to help SAIC Motor develop the Asean market, and expand its EV capacity in Southeast Asia.

Zooming into Malaysia, it was reported last year that Geely has teamed up with its Malaysian partner Proton to invest $10 billion and build a manufacturing hub in Malaysia as it eyes a stronger footprint in the Southeast Asia region.

BYD has appointed Sime Darby Motors as the official exclusive distributor of BYD vehicles in the country, according to press statement in December 2022.

Sime Darby Motors is the automotive arm of Malaysia-listed conglomerate Sime Darby Bhd and is involved in the retail, distribution and assembly businesses. It has a presence in nine markets across the Asia Pacific region. It was reported that MYR500 million ($107.53 million) will be invested to set up BYD showrooms in Malaysia.

TNGlobal has asked several questions about BYD’s plan in 2024, opportunities and challenges Sime Darby Motors and BYD sees, among others.

Below are the edited excerpts:

It was previously reported that MYR500 million will be invested to set up BYD showrooms. How is the progress so far? Any update on the timeline of the opening of showrooms?

We are in the process of opening BYD showrooms nationwide. Our first showroom – at TREC KL in Jalan Tun Razak – opened in December 2022. Our second showroom has been operating in Ara Damansara since February 2023.

By end-2023, with the support of dealer partners, Sime Darby Motors and BYD expect to bring the number of showrooms in the country to between 15 and 20. In 2024, we aim to double this number by establishing our presence across all states in Malaysia to ensure wider customer service coverage. Hence, BYD customers can be rest assured that they will be able to travel throughout Malaysia with the wide coverage of BYD’s network.

Some car owners or potential EV owners pointed out that charging stations/facilities are one of the main reasons they felt hesitant to purchase an EV. On this front, how is BYD? Any plans to build charging stations? How is the company helping its customers on the charging front?

To support the government’s push to low-carbon mobility and to propel our EV ambitions, Sime Darby Motors is committed to strengthening the country’s EV charging infrastructure network. This includes a memorandum of understanding with Tenaga Nasional Bhd, which involves establishing a network of highly efficient EV charging infrastructure along key highways across Peninsular Malaysia. In addition, Sime Darby Motors is also collaborating with prominent hotels in the Klang Valley to install EV charging stations. Excluding Porsche, we have a total of 49 chargers across Klang Valley, Penang, and Johor. Apart from this, KINETA was established by Sime Darby Bhd to provide EV charging solutions in Malaysia, as well as in Hong Kong, and has started supplying and installing EV charging equipment (Wallbox, Siemens, Starcharge, Tritium).

What is the opportunity and potential Sime Darby Motors & BYD sees in Malaysian market?

There continues to be growing demand for EVs amongst Malaysians, especially with the increasing line-up of EV vehicles in the market. This is further demonstrated by the positive response for the launch of EV models across Sime Darby Motors’ portfolio of world-class principles. The EV sector is projected to see steady growth, supported by the Malaysian Government’s incentives. We believe BYD’s innovative vehicles will be well-received by Malaysian consumers as EV adoption continues to pick up.

What are the biggest challenges and hurdles so far?

A key concern for many EV adopters is range anxiety. To help address this, Sime Darby Motors is playing a key role in contributing to the establishment of a comprehensive EV charging infrastructure in Malaysia. This includes the installation of EV charging infrastructure at strategic locations along key travel routes to better support the EV community.

Is there any plan for the joint venture to expand beyond Malaysian market? Which are the markets/countries? Any timeline?

We are always seeking out opportunities to expand to new markets with good prospects, at the right time and with the right partners. Any concrete expansion plans will be announced at the appropriate juncture.

Analysts expect the demand for EV in Malaysia to pick up in three years. What is the expectation from Sime Darby Motors & BYD? What would be the catalysts to boost the demand of EVs?

The EV trend in Malaysia is clear and unmistakable, and Government policies are supportive of this trend to move towards low-carbon mobility and sustainability targets. The appeal of EV products, complemented by incentives to purchase, and subsidies to maintain and operate, combined with an accessible charging infrastructure, will drive sales growth for EVs. Sime Darby Motors will continue leveraging on our wide portfolio of world-class principals to expand our EV line-up and to tap on this opportunity. We are also building capabilities via our collaboration with TOC Automotive College to continuously upskill EV technicians and supplement EV service and maintenance training.

How important is Malaysian market to BYD? Why is Malaysia chosen as one of the early markets BYD venture into?

Malaysia indeed holds much potential, particularly given its strategic location in the heart of the Southeast Asian region and the country’s strong long-term prospects. The outlook for the EV sector is projected to grow steadily, supported by the Malaysian Government’s incentives. Furthermore, given the strong growth of Malaysia’s SUV segment which saw sales increase by 43 percent in 2021, the BYD ATTO 3 was the ideal choice as the first BYD model to enter the Malaysian passenger car market, providing a more environmentally-conscious option as an all-electric SUV.

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