Mercedes-Benz Malaysia mulls CKD EV models, local battery recycling

Mercedes-Benz Malaysia is looking into local assembly (CKD) of electric vehicle (EV) models at its Pekan plant, as well as upgrading its production network and supply chain to achieve the standards of carbon neutrality that Daimler has committed itself to worldwide.

However, how soon these ambitions can be realized is highly dependent on various factors beyond the company’s control – for example, clarity with regards to Malaysia’s direction for low carbon mobility.

At virtual meeting with the local press earlier today, CEO Sagree Sardien spoke about parent company Daimler’s goal of becoming an electric vehicle-only company by 2030 and how Malaysia fits within Daimler’s strategy:

“We are of the opinion that there are some fundamentals that we obviously need to put into place and as Mercedes-Benz Malaysia we will work on that.

“For example, one of the key areas will be the readiness of our dealer network to introduce an attractive product portfolio (of EVs). This will mean that we have to ensure that we have the right digital and technological foundations at our dealerships that we bring in the right product ranges. We look for opportunities where we can localize electric vehicles, where it makes financial and economic sense."

“We also need to look into the charging infrastructure, and this in our opinion is not just a Mercedes-Benz challenge, it’s an industry-wide challenge, and there are several stakeholders that need to be involved - from the authorities to the OEMs, the entire supply chain who could all work in a cooperative and very collaborative fashion to ensure the rollout of infrastructure in the country.

“Whilst the bigger topic of electric vehicle policy, incentives, and infrastructure gets resolved, we will take the time and opportunity in the short-term to show the readiness of our network, training of our personnel, not only on the sales side but also on the after-sales side to be able to sell and maintain our vehicles.

“We will look into our own internal charging network across the country and see whether is there an opportunity for us to have fast charging at our dealership level.

“When it comes to the direction of carbon neutrality, we will focus both, not only at our plant, but also at our dealer retail footprint, to see how we can support the direction of carbon neutrality in the next decade.”

That’s a very polite way of saying that Mercedes-Benz has the intention to build EVs here but nothing is going to happen in Malaysia until our country decides what it wants to do with its industry, because there’s only so much that a car manufacturer can do.

The keywords “where it makes sense” and “financial and economic feasibility” were repeated many times throughout the meeting.

In short, it simply means that in Malaysia’s current environment where petrol is cheap and subsidized, carbon tax is non-existent, EVs are paying higher road tax than equivalent combustion engine cars, it makes no sense to sell electric vehicles here, because there is just no demand for it.

Nevermind EVs (specifically it is BEVs, for battery-electric vehicles) because even regular hybrid electric (HEV) and plug-in hybrid (PHEV) models – which that are meant to bridge the gap between combustion engines and fully electric BEVs – have yet to catch on here, so talking about BEVs here is a bit like putting the cart ahead of the horse.

The lack of PHEV and BEV models from Mercedes, Sagree said, “It’s not that we don’t have a PHEV (or BEV) offensive, but rather we want to focus on the holistic requirements of our customer base here.”

Also read: How many EVs are there on Malaysia roads? Slightly under 500, which brand leads?

When asked about other premium car makers' push launch BEV models in Malaysia (BMW, MINI and Porsche for example), Vice-President Michael Jopp added that he can’t comment on other competitors’ activities but would like to add that MBM would like to shorten the timing between announcing and actual introduction of cars.

“I think that’s probably the biggest difference. From that perspective, I don’t see us in any disadvantage,” said Jopp.

The Porsche Taycan is currently on sale in Malaysia, with prices starting from RM 584,561. The MINI Electric starts from RM 217,470.

BMW has also launched its BMW iX but deliveries won’t begin until next year, priced at RM 419,630.

Investing into battery recycling was also mentioned. At the moment, spent high voltage batteries from Mercedes hybrid (HEV) and plug-in (PHEV) models are shipped back to Europe for recycling.

To WapCar.my’s knowledge, BMW Group Malaysia is the only car company to do high voltage battery recycling in Malaysia. Spent lithium-ion PHEV and BEV batteries are recycled by BMW’s battery recycling partner SungEel HiTech, which has a plant in Penang.

Although Daimler has committed to a 2030 deadline to become an EV-only company, it hasn’t set a deadline to phase out combustion engines. In fact, Daimler specifically mentioned that the 2030 deadline applies only to markets where market conditions allow.

In other words, countries that can’t adapt to EVs will have to make do with older combustion models.

Up north, Mercedes-Benz Thailand has since confirmed that it will be assembling (CKD) the Mercedes-Benz EQS later this year, with Thailand-assembled high-voltage battery, at its Samutprakarn plant.

The EQS will be the first battery electric vehicle (BEV) to be made there. At the moment, the Samutprakarn plant already makes 5 different plug-in hybrid electric vehicle (PHEV) models, all equipped with batteries packaged at the RM 497 million Thonburi Energy Storage Systems (TESM) plant.