AmWatch - DRB-Hicom : Proton EV development appears on track BUY, 3 Oct 2014

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DRB-Hicom :  Proton EV development appears on track BUY

Proton appears to be making a strong headway in its development of an electric vehicle (EV), according to the Business Times.  The paper said this after pictures and remarks were posted by International Trade and Industry Minister Datuk Seri Mustapa Mohamed on his Facebook page.

The minister had uploaded several pictures of a Proton Iriz EV prototype, taken during his recent working visit to LG Electronics’ R&D centre in Incheon, Seoul. The minister said the car can travel up to 240km on a single charge. Business Times said the Nissan Leaf EV, which is being sold here, can reportedly travel less than 200km on a single charge.

Although the ministry had said that Proton would begin selling EVs this year, the introduction of the vehicle to the mass market is now likely only to occur only next year. Business Times cited a source as saying the National Automotive Policy (NAP) does not spell out proper incentives for EVs, unlike other energy-efficient vehicles such as hybrids, which enable their local production and sales to be viable and competitive.

On a hybrid model, Business Times reported that DRB-HICOM chairman Tan Sri Mohd Khamil Jamil had said earlier this year that Proton was on track with the hybrid project, and would launch the new technology by the end of next year. The report also said the Iriz’s all-new platform has been designed to support hybrid and electric powertrains, though the EVs can still be developed from future models.

We do not believe that the EVs or hybrid models would make much of an impact, and have not incorporated them into our projections. Proton’s current fortunes rest on its recently-launched 1.3L and 1.6L compact car, the Iriz. We maintain BUY on DRB-Hicom Bhd, with an unchanged fair value of RM3.60/share – a 15% discount to our SOP value of RM4.25/share.

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