- RM 200k - RM 300k BMW and Mercedes-Benz models to be most impacted by Tesla's launch in Malaysia.
- Tax-exempted EVs will offer a much-awaited third choice to buyers.
- Novelty of having a new toy to one up their peers outweighs the potential downsides of limited charging infrastructure.
Tesla's entry into the Malaysian market is expected to disrupt the premium car segment, with the most significant impact being felt by established players such as BMW and Mercedes-Benz.
One of the key reasons why premium brands such as BMW, Mercedes-Benz, Audi, and more, should brace themselves for Tesla's arrival is the price range of the Model Y, which is estimated to start from RM 199,000 for the standard rear-wheel drive variant to RM 288,000 for the AWD Performance variant.
Also read: Officially imported Tesla Model Y for Malaysia - from RM 199k, FSD upgrade for RM 32k, deliveries starting in 2024
These price points fall within the RM 200,000 to RM 300,000 range, which is a reasonable price range (consistent with prices in overseas markets) and comparable to models like the BMW 3 Series and Mercedes-Benz C-Class.
The compact executive sedan market in Malaysia has long been dominated by locally-assembled (CKD) models of BMW and Mercedes-Benz due to high tax penalties for imports and a relatively small market size.
The small market size leads to lower economies of scale, which means other manufacturers will find it difficult to justify the investment into CKD operations. This places fully-imported (CBU) rivals at an automatic disadvantage.
However, EVs like the Tesla Model Y are currently tax exempted and the prospect of owning an EV with its associated environmental benefits and lower operating costs can attract consumers who want something different.
Importantly, buyers in this price segment are likely to already own at least one internal combustion engine (ICE) car, and their decision-making is less driven by practicality. The current charging infrastructure and longer waiting times for interstate travels are not expected to be significant barriers for potential Tesla buyers.
The allure of owning a new, perceived as technologically-advanced Tesla and the novelty factor of showcasing it to their peers are likely to outweigh any perceived downsides.
The traditional mindset of Malaysian car buyers, especially in the luxury segment, leans toward established brands like BMW and Mercedes-Benz. However, Tesla's reputation as an industry disruptor has earned it a loyal following worldwide. We expect the entrance of Tesla into the Malaysian market to shake up the status quo.
Also read: It's official: Tesla will be launched in Malaysia on 20-July
As Tesla Malaysia is set to launch on July 20, the countdown to its official arrival is well underway. So far, only the Model Y has been confirmed, though we’re expecting an announcement for the Model 3 sooner than later.
Also read: Tesla EVs are officially coming to Malaysia - Here's everything you need to know