Bzzzzttt! MyEG and Oyika Green Technologies (Yinson’s wholly owned subsidiary, OGTSB) have just signed a memorandum of understanding to undertake a project on electric motorbikes and battery swapping stations.

It’s non-binding, which means both party can back out of the project anytime if it’s not working. So what’s the deal about?

Here are 5 things you should know about it!

#1 To start trial on electric motorbikes and battery swapping Stations … kinda like gas tong model

Do you know the gas tong that you always need to switch every month or two?

This project mimics that but the difference is that you will change the battery that you have in your motorcycle with a charged one at the batter swapping stations.

OGTSB will supply electric motorbikes to MyEG for 30-day trial periods for free, and I am guessing MyEG will hire or use their own people to conduct these tests.

There aren’t many electric motorbikes in Malaysia currently, as there isn’t an adequate amount of infrastructure available for electric vehicles yet.

Hence, this project could be crucial for Malaysia to conduct pilot projects to test whether the battery-swapping model is feasible.

There is a big rationale surrounding this. If you have been reading about the electric vehicle problem, there is a problem in terms of the time taken to charge the vehicles.

When China reopened beginning of the year, there was a big jam at the charging stations as vehicles needed up to 30 minutes to charge their vehicles.

Battery swaps could potentially reduce the congestion at batter stations.

#2 MyEG to provide location sites for OGTSB (Yinson) to deploy battery-swapping stations

One of the key success factors for this project to succeed would be for MyEG to provide the location sites for OGTSB to deploy their battery-swapping stations.

This is because this model will require high initial investments into land and properties to house these batteries.

The big question is whether MyEG has the required cash or assets to provide such land and properties. One of the things really interesting is that MyEG in its disclosure said that there will be no material effect on “gearing” which in laymen’s terms means that it will not borrow money.

This just leaves MyEG with two ways I can think of – its own cash and MyEG kiosks/offices.

1. Cash: As of 1Q 2023, MyEG has about RM215 million in cash which they can utilize to maybe rent land or properties.
2. Buildings: MyEG’s buildings are worth about RM222 million currently, where it could utilize them to house the battery swapping stations.

No more details are in yet but these 2 reasons are my best guess on how MyEG will fulfill its part of the bargain.

#3 Yinson invested in Oyika in 2021 to increase the adoption of electric vehicles

What MyEG lacks in expertise on electric batteries Yinson makes up for it in its investments in Oyika Pte Ltd back in 2021.

Oyika is an app-based solution that provides battery infrastructure and already has current technological capabilities in this field. Its batteries are swappable and compatible with most electric motor brands in Southeast Asia.

Oyika’s brand of electric motorbikes is called rydeEV and it is expected to roll out about 150 of them and 400 swappable batteries across the Klang Valley by the end of 2023.

It seems like this pilot project would be part of a test run by Yinson to see whether the model is feasible from their side.

This will also be important as the renewable business of Yinson suffered losses of RM129 million in 2023.

#4 MyEG is trying to diversify away from government contracts

You can say MyEG’s days are numbered if it continues to be dependent on government-related services. In February 2023, the government announced that all immigration services will be under government control by 2025.

Furthermore, the government has also relaxed the rules to show road tax on cars which further drives down demand for MyEG’s products.

MyEG’s share price declined sharply in the months of February 2023 in light of all this news to as low as RM0.60, where its highest share price in the past year was RM0.96.

As the government has agreed to extend MyEG’s services in the meantime until 2025, share price has recovered back to RM0.85 currently but the writing is on the wall. MyEG needs to diversify away.

#5 Success of this project could pave the way for the Malaysian government to invest in charging stations

In line with the National Low Carbon Cities 2050 plan by the Malaysian government, the success of this pilot project could provide confidence for the government to invest in the electric vehicles market.

It has plans to build 25,000 public charging stations and bring about 100,000 private charging stations in Malaysia by 2030.

This will be important for Malaysia also as it aims to achieve net-zero carbon status by 2050. Furthermore, the collaboration between Proton and Geely in the Automotive High-Tech Valley in Tanjung Malim could benefit from the success of this project.

Conclusion

It remains to be seen whether this pilot project between MyEG and Yinson could bear fruit in the next 2 years. Both sides could stand to gain as MyEG could diversify away from its current government contracts while Yinson could embark on increasing its electric motorbike and swapping electric batteries products in Malaysia.