Like many Malaysians, Adit Rahim has grown up around — and owned — Proton and Perodua, the national car brands. He has been thinking about switching to an electric vehicle, but decided against BYDi and Tesla, the most popular EV brands in the market. He’d rather wait for Proton’s first EV, due to be launched later this year.

“My first and second car were Protons, both hand-me-downs,” the 47-year-old communications professional told Rest of World. “I was seriously contemplating a Tesla, but it is beyond my reach, and no BYD fits my needs.” He currently owns three Proton cars.

With their low price points and wide range, the homegrown Proton and Perodua brands have been the first car purchase for Malaysians for decades. They account for nearly two-thirds of car sales in Malaysia, in contrast to other countries in Southeast Asia that have long been dominated by Japanese and Korean brands. As EV sales surge in the region, BYD is dominant, with Vietnam’s VinFast ruling in its home territory. Malaysia, the region’s second-biggest automotive market, is banking on Proton and Perodua to drive EV conversion in the country.

In June, Proton — backed by its Chinese partner Geely Holdings — unveiled its EV brand, e.Mas, with plans to launch its first EV by the end of the year. The vehicles will be made at the Proton factory in Perak state, which is being converted into an EV hub. Geely is also considering setting up a Proton factory in neighboring Thailand, with designs on the larger Southeast Asian market.

“Given Perodua and Proton’s current market share, it should be relatively easy for them to sell their EVs.”

“Our goal with the Proton e.Mas is to fulfill our promise of delivering Malaysia’s first national all-electric vehicle,” Li Chunrong, Proton’s chief executive, said at the brand launch in Kuala Lumpur. Access to Geely’s technology allows Proton to integrate new features, he said. “We are confident it will not only impress with its innovative breakthroughs, but also deeply resonate with our audience on an emotional level.”

Connecting with Malaysians on an emotional level is what sets Proton and Perodua apart in an increasingly crowded market. Set up in 1983 as the first national carmaker, Proton, or Perusahaan Otomobil Nasional, initially made budget versions of Mitsubishi cars under an agreement with the Japanese firm. It produced its first indigenously designed car in 2000, and set up plants in countries including Pakistan, Nepal, and Sri Lanka. It exports to several Asian and African nations. Geely — whose brands include Volvo and Zeekr — came on board in 2017, buying 49.9% in the company. Proton’s first EV will likely be based on the Geely Galaxy E5, the company’s first fully electric SUV, according to the blog Paul Tan’s Automotive News.

Perodua, or Perusahaan Otomobil Kedua Sendirian, was set up in 1993, with Japan’s Daihatsu holding a minority stake. It is Malaysia’s biggest carmaker, followed by Proton. Perodua launched its first EV prototype in May, developed in partnership with three local universities, with roll-out expected in 2025.

“This is a beginning for us, and we want to make this beginning as Malaysian as possible,” Perodua’s president and chief executive officer, Zainal Abidin Ahmad, said at the launch.

Pricing will be key. Perodua and Proton are expected to set the starting price of their EVs below $25,000, markedly lower than BYD and Tesla cars, which are priced above $30,000, Abhik Mukherjee, auto analyst at Counterpoint Research, told Rest of World. BYD and Tesla together account for nearly 80% of EV sales in Malaysia.

“To boost the sector, Malaysia needs its domestic brands … Proton and Perodua can provide tough competition by offering their EVs at a lower price point,” he said. “Given Perodua and Proton’s current market share, it should be relatively easy for them to sell their EVs, as both brands are well-established and trusted.”

Malaysia is also taking other steps to boost the domestic industry. The government will discontinue tax exemptions on imported EVs by the end of 2025. In July, authorities said that EVs assembled in Malaysia would not be subject to a minimum price of 100,000 ringgit ($23,000), an attempt to encourage foreign EV makers like BYD and Tesla to set up local assembly.

$25,000Perodua and Proton are expected to set the starting price of their EVs below this amount.

Malaysia had sales of about 720,000 passenger vehicles last year. The country’s electric-vehicle plan aims for EVs to make up 15% of all vehicles sold by 2030, from about 3% now. Getting to that target will depend largely on the affordability of EVs and the charging infrastructure, Shahrol Halmi, president of the Malaysian Electric Vehicle Owners Club, told Rest of World. 

“EV ownership will see an upward growth trajectory when Proton and Perodua roll out their own EVs,” said Halmi. “The big advantage they have is the fact that they are local companies with better relationships and better networks.”

A big challenge, however, will be ensuring that the charging network keeps pace, particularly in high-rise buildings in a city such as Kuala Lumpur, Halmi said. Malaysia has more than 2,000 EV charging stations now, with a target of 10,000 by 2025. The government is offering individuals a tax rebate for the installation, rental, or purchase of EV charging equipment.

The government’s sweeteners have paid off, with investments in the EV industry rising steadily. Nearly 60 projects worth more than 26 billion ringgit ($6 billion) related to vehicle assembly, parts manufacture, and charging infrastructure were approved from the start of 2018 to March 2023. The government offers the industry various tax exemptions, and is also considering a one-time subsidy for vehicle owners to switch to EVs.

With their local manufacture and government backing, Proton and Perodua have an edge over other EV makers. They will also be counting on loyal users like Adit, whose most recent acquisition was the Proton X90 SUV. 

“No other car on the market fitted my criteria within the price range I was willing to accept,” he said of his purchase. “I would definitely consider buying Proton’s e.Mas. It will be a good investment for my family.”