Empowering Malaysia’s EV Charging Ecosystem: Exploring Rental Model for EV Charger Installation
ARC News • April 30, 2024
In tandem with Malaysia’s ambitious targets to promote electrified vehicles and expand the nation’s charging infrastructure, the installation of EV chargers has recently garnered significant attention. With a national goal of producing 15% electrified vehicle by 2030 and the installation of at least 10,000 public charging facilities by 2025, the momentum for EV adoption is noticeable.
However, as of 19 January 2024, Malaysia has only reached a modest milestone with a total of 2,020 EV charging bays, comprising 1,591 AC chargers and 429 DC chargers. This figure falls short of the initial targets outlined in the Low Carbon Mobility Blueprint 2021-2030. Recognising the urgent need to bridge this gap, industry players are increasingly exploring avenues to contribute to the growing EV ecosystem.
The installation of EV chargers often involves collaborative efforts between landowners and operators, taking various forms such as rental arrangement, revenue/profit sharing arrangements, and joint ventures. In this article, we delve into the first model: the rental arrangement, discussing essential terms in this model to shed light on the collaborative process between landowners and operators in establishing EV charging infrastructure.
Key Terms in a Rental Arrangement for EV Charger Installation
Tenure: Typically the Rental Agreement spanning a minimum of three years with provisions for automatic extensions, enabling operators to gradually recoup their investment costs over time.
Rental/License Fee: Usually, this comprises a fixed monthly fee, occasionally supplemented by potential revenue-sharing mechanisms based on the charging station’s utilisation rates.
Fit-Out Period: Landowners often provide a fit-out period of several months (typically between 1-3 months) for the installation and setup of the EV charger infrastructure, ensuring seamless operational readiness.
Operator Obligations: Encompassing responsibilities such as timely payment of rental fees, obtaining necessary approvals and licenses for EV charger operation, securing adequate insurance coverage against risks of fire, theft, and public liability, and arranging for an electricity meter with Tenaga Nasional Berhad.
Landowner Obligations: Encompassing responsibilities such as providing power supply, allocating designated charging spaces, and rectify any defects or malfunctions in existing facilities that could compromise the safety and security of the EV charging facility.
Indemnity: Typically, an indemnity clause is included for the operator to indemnify the landowner against any losses or damages incurred as a result of renting the space to the operator. This clause may also cover losses or damages resulting from the operator’s breaches of covenant or legal obligations in the Rental Agreement.
Termination: Outlining requirements for vacating and returning the space to the landowner in a good and tenantable condition, with provisions for restoring the space to its original state if mandated by the landowner.
While these terms represent crucial aspects of a license/rental agreement for EV charger installation, it’s essential to recognise that there’s no one-size-fits-all approach. Each agreement must be meticulously tailored to accommodate the unique requirements and preferences of all parties involved.
This Article is written by Yeo Shu Pin (Partner) of Messrs. Afif Rahman & Chong
Disclaimer: Every attempt to ensure the accuracy and reliability of the information provided in this publication has been made. This publication does not constitute legal advice and is not intended to be used as a substitute for specific legal advice or opinions. Please contact the authors for a specific technical or legal advice on the information provided and related topics.
