Elon Musk and Tesla enter MY: An opportunity or threat to the local economy?

Elon Musk, the controversial tech mogul behind the rebrand of Twitter to ‘X’ and his automotive brand, Tesla, has displayed a growing interest in Malaysia as of late. The attention on Malaysia initially manifested in the setting up of Tesla on Malaysia’s shores, and has expanded to include his satellite communications service company, Starlink.

This has gotten the public and the marketing industry talking as to what opportunities and challenges lie ahead upon this groundbreaking development within the electric vehicle industry in Southeast Asia, and what Malaysia has done to draw Musk’s attention.

MITI minister, Zafrul Aziz, said at the initial point of announcement that the move demonstrates Tesla’s confidence in Malaysia’s economic fundamentals and conducive business environment, making Musk’s interest in Malaysia a profitable one. He said that even as major global brands decide to invest and re-invest in Malaysia, MITI and its agencies will continue to enhance efforts to improve the ease of doing business, while continuously profiling Malaysia as "pro-trade, pro-industry and pro-investment".

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While it can be assumed that a famed international figure like Elon Musk investing in Malaysia would be financially lucrative for the country, it is also important to note that Musk has a notorious reputation for being temperamental, as seen in his decisions with Twitter. Naturally, it is valid to question if his interest stands to help or harm Malaysia in the long run.

What makes Malaysia a point of attraction for Elon Musk? 

Industry players A+M spoke to also agreed that Musk’s interest in growing Starlink’s adoption in Malaysia, making it the second country in ASEAN, is brought about by Malaysia’s strong economic performance.

Ashvin Anamalai, CEO of DNA Creative Communications said the country’s solid economic growth is indeed the anchor point that has catalysed the growth of investment attraction to Malaysia. He said:

It may inspire regional collaboration, investment attraction, and knowledge sharing in technology and innovation, contributing to enhancing ASEAN’s connectivity and bridging a digital divide.

Moreover, Malaysia’s leadership prioritising the adoption of advanced technologies could spur progress and economic growth throughout the ASEAN region, he added.

Apart from Malaysia’s strengths, the risk-taking personality of Musk is also one of the contributing factors. Lee Poh Li, managing director at RAPP said Musk loves uncharted territories and Malaysia is one for him.

“Though he can be a controversial figure, he sets his priorities to help in the way he sees that it should be done. This could be exciting times if we do peak his interest and if he starts investing in Malaysia, I can see there would be changes coming, there's really no win or lose, there’s only win or learn,” she added.

Does Musk’s controversial brand help or harm Malaysia? 

Despite his controversial behaviours on social media, industry players A+M spoke to believed that Musk and Tesla entering Malaysia can bring both opportunites and challenges to the country in the long run.

Sandeep Mark Joseph CEO and co-founder of Ampersand Advisory said the entry of Tesla and Musk to Malaysia comes as a boost to the country’s self-esteem as the local market is ripe for electric cars, and the country’s largest company PETRONAS has launched Gentari, a separate entity dedicated to renewable energy solutions. He said:

With a large affluent class that is well travelled, techno savvy and environmentally aware, Tesla should do well. Musk’s timing is right: Malaysia will be the third high income nation in SEA.

Tesla’s presence will accelerate the entry of electric cars from other manufacturers, and will spur the business of electric charging as well, he added.

On the other hand, DNA Creative’s Anamalai said Musk’s interest in technologies such as Starlink could lead to exciting advancements, investments, and global recognition for the country. “This may pave the way for job creation and growth in Malaysia's technology sector,” he said.

However, it's important to consider the potential drawbacks, such as uncertainty caused by his unpredictable behaviour and the risk of negative public perception. He added:

Malaysia should approach this association carefully, focusing on strategic planning and collaboration to make the most of the opportunities while addressing any potential risks that may arise.

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