Spurred by tax breaks announced during Budget 2022, the electric vehicle (EV) movement in the country may now be on the move, but an investment bank says that it will take some time for players in the automotive sector, including those in the component/parts supply segment, to fully map out strategies and their business for the new direction in electrification.

In a report, Affin Hwang Capital said it expects the automotive sector to consolidate in the next two years. It said that based on its channel checks with the auto and auto parts companies under its coverage, every company was formulating its own strategies and initiatives to cater for the emerging landscape, as the New Straits Times reports.

“In the next couple of years, we expect the sector to consolidate in order to find its footing in the industry on the degree of involvement within the manufacturing, assembling, distributing and providing after sales services within the EV supply chain. Moreover, we are also seeing increasing support from other industrial and energy players to implement EV charging infrastructures,” it said.

The investment bank said opportunities within the EV supply chain ranged from localisation of critical components to EV interoperability centres as well as the development of charging stations and its infrastructure.

Late last year, the government said it was identifying strategies to promote the EV industry in the country, and was looking into a number of specific initiatives, including those that would strengthen the development of the EV ecosystem. This includes the manufacturing of critical components, the establishment of standards to support the EV ecosystem and encouraging research and development activities to develop local technologies.