Which T20 eats more government subsidies – the ICE car owner or the EV owner? Ioniq 5 vs 330i compared – paultan.org
This infographic on electricity subsidies in Malaysia was published yesterday through Bernama. It says the ICPT rate for the period of January to June 2023 is a 27 sen surcharge over the current electricity tariff, but the government has decided to subsidise it to maintain the current 2 sen rebate for domestic users.
ICPT is basically a mechanism to review the electricity tariff every six months to take into account fluctuating fuel pricing, which contributes to 65% of the cost component of the electricity tariff.
It is revised every six months based on the six months period before it. Based on actual fuel costs from July 2022 to December 2022, the ICPT for January 2023 to June 2023 has been determined to be a 27 sen surcharge. The government has decided to fully subsidise this for domestic users, which is expected to cost RM10.76 billion for this six month period.
With all the recent talk about transitioning to targeted subsidies to ensure the T20 does not unfairly benefit from subsidies that they do not need, we thought we’d do a simple calculation to see if the government would be subsidising T20s that use electric cars less than if they were to drive ICE cars.
We decided to compare a Hyundai Ioniq 5 Max to a G20 BMW 330i. Why a Hyundai Ioniq 5 Max? Well, it’s simply because I have one so I am able to confidently say how much its electricity consumption is based on my mixed driving pattern, which in this calculation I will be using 17 kWh per 100 km.
An Ioniq 5 Max has a base price of RM270,408, with the price typically increasing to around RM280k when you upgrade to the 5 year warranty package. In choosing which ICE car to compare it to, we decided to use something that a typical T20 shopping for a car in that price range would buy, so we decided to use the G20 BMW 330i, which is priced at a premium over the Ioniq 5 Max at RM318k.
Now we know that BMW 320i is closer in price to the Ioniq 5 Max than the 330i, but we felt that someone who would go for the Max variant of the Ioniq 5 would likely be interested in driving a powerful car and having a higher equipment level, which is what the 330i would be instead of a base model like the 320i.
Based on Fuelly data for the 2021 BMW 330i, we took 7.28 L/100km as the average fuel consumption for the ICE car, and compared it to the 17 kWh/100km that I was getting with the Ioniq 5 Max.
So which T20 would receive more government subsidies? The Ioniq 5 Max owner or the 330i owner? We crunched the numbers based on inferred unsubsidised pricing for both electricity and RON95 petrol.
For unsubsidised RON95, we are using the RM3.22 per litre pricing used at the dedicated unsubsidised fuel stations in Perlis. For unsubsidised electricity, we are adding the 27 sen ICPT surcharge that is being subsidised to the highest TNB domestic tier, which is what T20 EV owners would typically pay to charge their cars at home.
After crunching the numbers, it turns out the BMW 330i owner receives a RM8.52 subsidy per 100 km, while the Hyundai Ioniq 5 Max owner receives less subsidies, with his EV netting him a RM4.92 subsidy per 100 km. So if more T20 switched to EVs, the government would actually be reducing its subsidy bill.
Interestingly, even if the EV owner did not receive any electricity subsidies and paid a full unsubsidised price of RM14.30 per 100 km, it would still cost less than paying RM14.93 for subsidised RON95 for 100 km of travel in the ICE car.
So there you have it, if our maths are sound, it would appear that the more of the T20 population that switches to EVs, the less government subsidies they would consume.
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