Which T20 eats more government subsidies – ICE car owners or EV owners? Ioniq 5 vs 330i

This infographic on electricity subsidies in Malaysia was published yesterday through Bernama. It said the ICPT rate for the period January-June 2023 is a 27 sen surcharge on top of the current electricity tariff, but the government decided to subsidize it to maintain the current 2 sen discount. for domestic users.

ICPT is essentially a mechanism that reviews electricity tariffs every six months to account for fluctuations in fuel prices, which contribute up to 65% of the cost component of electricity tariffs.

It is revised every six months based on the previous six-month period. Based on actual fuel costs from July 2022 to December 2022, ICPT for January 2023 to June 2023 has been determined as a 27 sen surcharge. The government has decided to fully subsidize domestic users, which is expected to cost RM10.76 billion during this six-month period.

With all the recent talk of moving to targeted subsidies to ensure the T20s don’t unfairly benefit from subsidies they don’t need, we thought we’d do a simple math. simply to see if the government would subsidize T20s that use less electric cars if they drive ICE cars.

We decided to compare one Hyundai Ioniq 5 Max to one G20 BMW 330i. Why Hyundai Ioniq 5 Max? Well, simply because I have one I can confidently say its power consumption based on my mixed driving style, in this calculation I would use 17 kWh per 100 km.

An Ioniq 5 Max has a base price of RM270,408, with the price typically rising to around RM280,000 when you upgrade to a 5-year warranty plan. When choosing which ICE car to compare it to, we decided to use what a typical T20 when buying a car in that price range would buy, so we decided to go with the G20 BMW. 330i, the car costs more than the Ioniq 5 Max at RM318k.

We now know that the BMW 320i is priced closer to the Ioniq 5 Max than the 330i, but we feel that someone who will choose the Max variant of the Ioniq 5 will likely enjoy driving a powerful and well-equipped vehicle. be more advanced. , which is what the 330i will instead of a basic model like the 320i.

Based Fuel data for BMW 330i 2021we take 7.28 L/100km as the average fuel consumption for the ICE and compare it to the 17 kWh/100km I get with the Ioniq 5 Max.

So which T20 will receive more government subsidies? Owner Ioniq 5 Max or owner 330i? We process numbers based on unsubsidized inferred prices for both electricity and RON95 gasoline.

For unsubsidized RON95 gasoline, we are using the RM3.22/litre rate applied at the dedicated unsubsidized fuel stations in Perlis. For unsubsidized electricity, we will add the subsidized 27 sen ICPT surcharge to the highest domestic TNB, which is what T20 EV owners typically pay to charge their cars at home.

After processing the numbers, it turns out that owners of the BMW 330i receive an allowance of RM8.52 per 100 km, while owners of the Hyundai Ioniq 5 Max receive a lesser allowance, with the His EV, he gets a subsidy of RM 4.92 for every 100 km. So if more T20s switch to EVs, the government will actually reduce the subsidy bill.

Interestingly, even if the electric vehicle owner does not receive any electricity subsidies and pays the full unsubsidized price of RM14.3/100km, the cost is still lower than paying RM14.93 for subsidized RON95 petrol for 100km of ICE vehicle travel.

So you get it, if our math is reasonable, it seems that the more T20 population switches to electric vehicles, the less government subsidies they will consume. But apparently, electric cars are purchased tax free at the moment, so the government gets no tax income when T20 buys it compared to ICE.