Thursday, December 26, 2013


By Dr Mahathir Mohamad

1. Someone suggested Proton produce electric cars. It is a good idea. Electric cars cause less pollution because the electricity to drive the cars is ultimately provided by electric power plants. These use fuel oil, coal, gas water-power and nuclear power. The pollution is still there but minimised.
2. Electric cars need batteries, specifically lithium-ion batteries. They cost RM1,000 per cell currently. Tesla needs between 36 to 48 cells, adding to the cost of the cars.
3. Mitsubishi MIEV and Nissan Leaf use slightly less number of batteries but are still quite expensive, certainly more expensive than Proton’s internal combustion engine cars.
4. Charging the batteries take 8-hours. The batteries would be fully discharged after running from 70 to 130 kilometres. Some run further but needs more batteries, increasing the price.
5. The batteries are said to last 10 years. This is by computer simulation. Replacing the batteries would be costly.
6. Toyota and Honda produce hybrid cars i.e. petrol engines together with batteries. They don’t seem to have faith in electric cars. Chevrolet produce the Volt which is also a hybrid and not electric. They are all more expensive than ordinary cars.

7. For the past five years Proton has been researching and developing both electric and hybrid cars. It cost a lot of money though not as much as the major car manufacturers who have spent more than USD4 billion each. So far nobody has truly succeeded.
8. We are still trying in Proton.
9. The Malaysian Government subsidises fuel prices. More cars on the road means more subsidies. To recover some of this money, the Government taxes motor vehicles including Proton. The high price of the cars is due to the taxes.
10. The only way to reduce car prices is to lower or abolish taxes. The Government would lose a lot of revenue. There will be affordable electric cars when battery prices come down considerably. That will take a long time.
11. I am presently in Australia. This rich developed country had a national car – the Holden. When foreign cars came in the Holden lost market share and money. It was sold to General Motors of America which agreed to produce Holden GM cars on condition the Australian Federal Government support it by 200 million Australian dollars a year (600 million Ringgit).
12. Now General Motors wants to pull out unless the Australian Government guarantees to subsidise it beyond 2015. The Labour Party is offering Aus$300 million a year. The high cost is due to the rise in exchange rate of the Australian dollar and very high labour cost. The cars on Australian roads are almost all from Korea and Japan though a small number are produced in Australia with 30% local content. Toyota which produces a lot of components locally is also contemplating pulling out.
13. Consider what would happen to Australia’s economy if General Motors pulls out. No one is talking about electric cars.

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