Published on September 6th, 2023 | by Subhash Nair0
Tesla Has Disrupted The Malaysian New And Used Car Market Before Even Making Its First Car Delivery
Throughout the short history of the Malaysian automotive market, few players have had such significant impacts. When Proton first launched in the 1980s, the resale value for non-national brands suddenly spiked as a result. When Perodua launched the Myvi in the mid-2000s, the dominance of Proton vehicles eroded. When Honda launched the HR-V in the mid-2010s, Toyota was temporarily dethroned from the top of the non-national brand spot.
Now with Tesla you have the entire industry completely reshaped once again. The difference is this time the change has started before Tesla even delivered their first vehicle.
I don’t think I need to go too much into why so many Malaysians have placed their order. Many EV enthusiasts here have been waiting for over a decade for the chance to own a Tesla. Now that it arrives, it’s being priced much lower than your typical premium EV brand while still being perceived as more aspirational than the Chinese options with just an 11% price gap at their extremes. This has put a lot of pressure on both the Chinese brands.
That being said legacy premium brands are also feeling the pinch. ‘Bread and butter’ ICE cars for BMW, Mercedes-Benz and Volvo are all priced well above the RM200,000 mark. They’ve all got assembly plants while Tesla can deliver a product fully-imported for a significantly lower price tag. Yes, these brands also offer EVs here, but most of the ones around the RM250K-RM300K bracket are based on shared platforms with ICE/Hybrid products. The iX1, EQA, and XC40 Pure Electric for example.
If you go a rung up, you start to see more dedicated EV products, but these products are often North of RM400,000 like the iX and EQE. Tesla’s most kitted out Model Y is still priced at RM288K. Yes it’s a size smaller, but the brand draw is still considerable. As a potential Tesla customer put it, “you don’t feel out of place parking a Tesla next to a Benz”.
Car brands aren’t the only ones affected. The used and reconditioned market have also had to readjust prices in response to Tesla’s arrival. It started with Model Y and Model 3 reconditioned models being repriced on listing sites. Some slashed prices in half from RM299,000 to RM150,000 overnight. Mind you, we’re still at least a quarter of a year away from the first official Tesla cars being delivered to customers.
In an industry with pricing so micromanaged by the government, it might initially be a bit tough to understand why Tesla was allowed to enter with such aggressive pricing. One theory proposed by Lua Bo Feng of Autophiles was this: the PH government went through a coup the last time they tried to dismantle the existing system. Instead of doing that, they’re now making the existing system unprofitable and using Tesla as their political tool, allowing them to establish themselves without a local partner, without a GLC’s involvement and without AP holder involvement. The avenues for AP holders are still there, but their margins are now much thinner. The question is how the government is going to keep legacy brands with huge investments happy?