Will Targeted Electricity Subsidies Cost EV Owners More For Home Charging?

Recently Prime Minister Datuk Seri Anwar Ibrahim announced that households with high consumption of electricity would no longer receive subsidies.

To be precise, his exact words were that “those who can afford to run 3 fans and 4 air conditioners at home are believed to belong in the T20 group, hence should pay the actual cost of their consumption.”

He clarified that this targeted electricity subsidy method based on consumption levels is perfect. Naturally, this method assumes only T20 income households would actually consume high amounts of electricity, thus leaving M40 and B40 households untouched.

However we’ll point out that Datuk Seri Anwar did not exactly quantify the threshold amount of electricity consumption that would equate to a household being categorised as T20.

Back in Dec 2022, the Prime Minister had announced a tariff hike for MNCs, with general households and SMEs exempted. SMEs, according to him, take up the bulk of the subsidy at that time, which sees an estimated cost of RM30 billion annually.

Meanwhile, Natural Resources, Environment and Climate Change Minister Nik Nazmi Nik Ahmad mentioned in March that the government had allocated RM10.76 billion to cover electricity bill subsidies for domestic and non-domestic consumers in the low voltage (LV) category from Jan 1 to June 30, 2023.

EV home charging utilizing the conventional wall plug-point. 

Now with this sudden surge in electricity prices for the so called “T20” group, would this act as a deterrent to all the effort done by the government previously in pushing for a wider spread of EV adoption and drive to bring in more affordable EVs to cater for the M40 and eventually the B40 household category.

Most EV users that we’ve spoken with reside in landed properties and charge their vehicles via private home AC chargers. Based on current subsidised prices, a 76 kWh EV would consume about RM43 to charge from 0-100%.  Also, most EV owners charge their EVs at a rate of 8 times a month, meaning their current home EV charging consumption would be roughly RM344.

However if this household is categorised as T20 based on electricity consumption alone, it would cost RM0.841 per kWh instead. At this rate, single charges will cost RM64, and up to RM512 monthly. This is an increment of RM168 purely on EV charging excluding all other household consumptions.

Now do also keep in mind, petrol prices in Malaysia remain heavily subsidised. Also, one push factor for EV ownership was the cheaper home charging prices that offsets the “hassle” early EV adopters have to endure in charging downtimes, especially during long distance travels with limited charging stations.

Would this move to increase the electricity tariffs benefit EV owners? Will this drive away more potential EV adopters for fears of being indirectly classified in the “T20” category? This is even with the high number of Chinese EV brands poised to the local market with offerings below RM150,000 that are targeted towards M40 groups.

Source: New Straits Times