EVEN if Tesla Inc’s decision to pull out of Southeast Asia (SEA) - including Malaysia, Thailand and Indonesia - is a one-off decision not reflective of other foreign direct investment (FDI) initiatives of the Madani government, the key lesson is surely never to count one’s chicks before the eggs are hatched.

One wonders whether the relevant authorities had conducted ample due diligence on the EV (electric car) behemoth’s business trend prior to trumpeting prospect of Tesla ‘pouring lucrative investments’ for sheer populist political milage.

What irks Malaysians is the much-publicised 25-minute teleconferencing between Prine Minister Datuk Seri Anwar Ibrahin and billionaire tech mogul Elon Musk on July 14 last year (2023) with the Texas-based carmaker reportedly pledging to establish its Malaysian headquarters in Selangor and the former showering him with ‘mouthwatering’ incentives.

Among others, Tesla will be able to sell its vehicles assembled abroad in Malaysia without any import tariffs. The company was also granted exemption from having a local partner as well as the minimum 30% Bumiputera equity rule.

South China Morning Post Malaysia correspondent Hadi Azmi summed up the Madani government’s over-enthusiasm with Musk’s conquest best: “Malaysia was so eager to attract Elon Musk to invest in the country that it exempted Tesla from having to work with a local partner. Then, it got gamed.”

Not all is lost

To deflect criticism of having told the media “to ask Tesla” over its plan to shelve its SEA investments, Minister of Investment, Trade, and Industry Tengku Datuk Seri Zafrul Tengku Abdul Aziz has reiterated that MITI or any of its agencies “had never announced that Tesla will open its plant in Malaysia”.

“Regardless, MITI will continue to strive to attract high quality investment to Malaysia,” he penned in a Facebook post. “Strategies to attract investment in the automotive industry are not limited to Tesla.”

From 2022 to 1Q 2024, Malaysia according to Tengku Zafrul, has attracted investment worth RM24.55 bil in EV-related manufacturing activities from companies such as Chery, Gemilang Coachwork, Samsung SDI Energy, NexV Manufacturing and EVE Energy.

“Our local manufacturers also support Tesla’s global supply chain by supplying them with parts, components and factory automation systems,” contended the former finance minister.

“In addition to investment in the automotive sector, the government also attracts investment in various other sectors. For 1Q 2024 alone, the approved investment was RM83.7 bil - up 13% compared to last year.”

While Malaysia awaits Tesla’s official announcement of its so-called “exit plan’, twice former premier Tun Dr Mahathir Mohamad has recently expressed his scepticism of the Madani government’s claims of increased FDI inflows into Malaysia.

“We are told that there is a lot of FDI coming in from companies like Microsoft and Apple,” he told Free Malaysia Today in an interview. “But on the ground, nothing is happening. We don’t see any progress being made. Until we see (tangible actions), we cannot take the proposals seriously.”

Contrasting the many government announcements to news about companies relocating to countries such as Indonesia and Singapore, the nonagenarian pointed out that many of the announcements were “just memorandums of understanding (MOUs)” as opposed to actual investment agreements.

Taking the country’s longest serving premier of 22 years and 22 months’ viewpoint with a pinch of salt, Malaysians must now brace for two more US tech giants to keep to their words.

In late May, Anwar who is also the Finance Minister has reportedly showed his appreciation towards Google’s investment of RM9.4 bil in Malaysia through his Facebook post, alluding to the fact that this positions Malaysia as one of the key players in the adoption and support services for digital technology-based services.

Earlier in May, Anwar also hailed the additional investment by Microsoft amounting to US$2.2 bil (RM10.5 bil) in Malaysia over the next four years as the largest single investment by the company in its 32 years in the country.

“Malaysia welcomes this investment decision which proves their confidence in the country’s strong economic base, clear and focused policies, in addition to investor friendliness and political stability,” he noted in his Facebook post on Microsoft’s AI (artificial intelligence)-centric investment.

Given the high hopes, Malaysians certainly would not want to witness a repeat of having to purchase 40 units of Starlink internet devices - also a tech business of SpaceX founder Musk - probably as a sweetener for Tesla to invest in the country which it never did. - Aug 9, 2024

https://focusmalaysia.my/after-teslas-blow-malaysia-braces-for-google-microsoft-not-pulling-out-another-david-copperfields-stun/