Indonesia’s

Electric Vehicle
Outlook
SUPERCHARGING
TOMORROW’S
MOBILITY
JULY 2023
Electrifying As Indonesia’s Coordinating Minister of Maritime
and Investment Affairs, I am pleased to receive this

Indonesia: report from AC Ventures and the Indonesian Electric

Mobility Ecosystem Association (AEML). It provides

A Vision for a comprehensive analysis of the potential growth

trajectory of the electric vehicle (EV) sector in our

Sustainability nation.

and The transition to electric mobility represents a

strategic national decision with dual objectives:

Prosperity promoting a sustainable future and stimulating

significant economic growth. Given our resource
abundance and strategic location, Indonesia has a
unique opportunity to emerge as a central player in
the global EV market. This objective is a long-term
commitment that extends for decades to come.

Climate change demands immediate, decisive

action. The introduction and adoption of EVs will allow
Indonesia to reduce carbon emissions substantially,
contribute to global sustainability efforts, and generate
significant economic returns. An integral part of this
transition is the development of a comprehensive
EV ecosystem, which cannot be achieved overnight.
It demands a holistic and sustainable approach,
requiring continuous commitment from the public and
private sectors to ensure the proper development of
the industry.

Our advantage as the world’s leading nickel producer,

a critical element in lithium-ion batteries, amplifies
our potential to contribute significantly to the global
EV battery supply chain. This represents a robust
investment opportunity for industry stakeholders.

With the rise in demand for EVs, particularly from the

expanding middle class, the Indonesian government
is taking proactive measures. We are shaping policy
frameworks that enhance the quality and affordability
of EVs, thereby promoting their adoption. A pivotal
aspect of our strategy is Presidential Regulation
No. 55 signed in 2019, outlining the government’s
commitment to support the EV industry.

Indonesia’s Electric Vehicle Outlook 2

“Electric vehicles We have set targets to have 13 million electric
motorbikes and 2 million electric cars on our roads by

are important 2030.

because they Our renewable energy goals are ambitious, aiming

to increase the contribution of renewables to 23% of

can reduce our the country’s energy by 2025, up from about 9% in

mid-2020. By 2056, we plan to complete a broader

dependency on nationwide energy transition. These initiatives align

with our commitment under the Paris Agreement to

imported energy reduce our emissions by 32% by 2030 and achieve a

net-zero emissions goal by 2060 or earlier.

and reduce Recognizing the challenges ahead, we acknowledge

emissions.” the importance of nurturing the EV ecosystem

holistically. Major breakthroughs, such as the
investment in a new aluminum industry in East Java,
signify the development of the supporting ecosystem
crucial for the sustainability of EVs.

This report by AC Ventures and AEML serves as a

tool to deepen our understanding of the EV sector. It
outlines the current state and future direction of the
industry, including growth trajectory, technological
trends, policy impacts, and potential obstacles.

This report may serve as a strategic guide, providing

insights to investors, businesses, policymakers, and the
public. The information herein may help us adapt our
strategies, maximize opportunities, and manage risks.

The imminent EV revolution requires a collective effort.

This report can potentially aid collaboration, strategic
decision-making, and informed investments in our
long-term journey toward an electrified future.

Luhut Binsar Pandjaitan

Coordinating Minister of Maritime and Investment
Affairs, Indonesia

Indonesia’s Electric Vehicle Outlook 3

Spark of Based on the enhanced Nationally Determined
Contribution document, transportation is considered

Change: a part of the energy sector. This sector emphasizes

energy conservation and the utilization of new and

Redefining renewable energy in controlling greenhouse gas

emissions.

Transportation In order to reach the goal outlined above, the Ministry

for a Thriving of Transportation has implemented a financial

incentive policy. This policy waives certain fees for the

Nation KBLBB type test, the KBLBB Type Test Certificate, and for
the conversion of motorized vehicles. Specifically, the
costs for the Type Test Certificate and Certificate Type
Test Registration have been reduced to IDR 0.

Through the instructions of the Ministry of

Transportation concerning the implementation and
acceleration of using battery-based electric motorized
vehicles, we are putting effort into promoting
and implementing the roadmap for transitioning
operational service vehicles from electric motorized
vehicles to battery-based electric motorized vehicles.

Regarding vehicle conversion, the total number

of motorcycles converted, as per the Type Test
Certificate and the Type Test Registration published
as of May 12, 2023, can be confirmed as 178 units. At
present, we have 25 certified and ten non-certified
workshops that specialize in motorcycle conversions.
We are actively encouraging the growth of both these
categories, as we aim to increase the overall number
of conversion workshops for motorcycles and other
vehicles.

As of June 21, 2023, there are 70,242 electric vehicles

in Indonesia. Two-wheeled vehicles account for the
majority of these, with 53,734 units, followed by four-
wheeled vehicles with 16,102 units. Three-wheeled
vehicles number 316 units, buses 80 units, and goods
vehicles ten units.

Currently, the Ministry of Transportation is finalizing the

revision of a regulation concerning the conversion of

Indonesia’s Electric Vehicle Outlook 4

“To establish an electric motorcycles into battery-based electric
motorcycles. This is to support the acceleration of type

EV ecosystem test services for converted motorcycles.

in Indonesia, In the future, conversion workshops will be divided into

two clusters, and the implementation of type testing

synergy and will not only be conducted at the roadworthiness

testing and motor vehicle certification center but also

collaboration at all testing locations in Indonesia – private testing,

public service agencies, and conversion workshops

between the that have been accredited.

government, To establish an electric vehicle ecosystem in

Indonesia, synergy and collaboration between the

automotive government, automotive industry players, and the

community are essential. The government hopes that

industry stimulating the use of electric vehicles will increase

energy efficiency and energy conservation in the

players, and the transportation sector, while also improving air quality
and, most importantly, reducing our dependence on

community are imported fuel.

essential.” I would like to express my appreciation to AC Ventures

and AEML for supporting the government’s program
to improve the battery-based electric motor vehicle
ecosystem in Indonesia.

Budi Karya Sumadi

Minister of Transportation, Indonesia

Indonesia’s Electric Vehicle Outlook 5

Shifting Gears: As Minister of Industry, I am pleased with this
comprehensive report on the emergent and dynamic

The Future landscape of the Indonesian electric vehicle (EV)

industry. It demonstrates our nation’s unwavering

of the Green dedication to the development of environmentally

favorable technology and serves as a road map to our

Revolution progression toward lower emissions and sustainable

development.

In addition, it highlights the innovators and investors

responsible for our forward momentum.

In an effort to reduce emissions, our government

promotes the use of electric vehicles. Recognizing that
incentive programs play a significant role in fostering
green innovation, we have implemented a strategy
that prioritizes benefits based on emission levels rather
than conventional engine capacity.

The distinction between these initiatives and a

carbon tax exemplifies our considerate approach to
sustainable development.

On the basis of the accomplishments of the Low-Cost

Green Car (LCGC) program, we are incorporating
valuable lessons and newly acquired knowledge
into our evolving policies. Simultaneously, we
are implementing incentives for domestically
manufactured electric vehicles with a local
component level exceeding 40%, with the intent
of bolstering innovation and entrepreneurship in
Indonesia.

Our vision for electric mobility is firmly established

at the intersection of technology and imagination.
Multiple automakers contribute to our comprehension
of market dynamics and how to develop cutting-edge
technology to meet the escalating demand for green
transportation through the use of distinctive strategies
and methodologies. While competition in the sector
promotes economic development, it also accelerates
our collective efforts to reduce greenhouse gas
emissions.

Indonesia’s Electric Vehicle Outlook 6

“The growth of This imminent EV shift represents a once-in-a-
generation opportunity for Indonesia to cultivate a

electric vehicle thriving domestic market, which is far from being

a straightforward manufacturing endeavor. It

(EV) sales encourages local industries to innovate and develop

scalable EV technology. Indonesia has the potential for

indicates public long-term growth, aided by innovative research and

development, despite difficulties and competition. We

readiness in must capitalize on this opportunity.

Indonesia, with We must not forget our commitment to the

international community to attain net-zero emissions

the electric by 2060. This broader perspective guides us as we

structure our EV ecosystem, recognizing its potential

mobility market to generate employment opportunities in addition to

economic value.

having the Understanding the EV industry is not just a matter

potential to of academic interest; it’s an investment necessity.

Beyond the obstacles of traffic and emissions, the

develop at a sector’s growth and job creation offer significant

economic benefits. With our climate commitments

CAGR of 58.5% and economic objectives in sight, the EV industry

represents an opportunity that we cannot afford to

through 2030.” pass up.

The increasing sales of electric vehicles already

indicate the public’s readiness to implement clean
transportation. The Indonesian EV market is expected
to develop at a CAGR of 58.5% between 2023 and 2030,
according to projections.

This report by AC Ventures and AEML outlines a

strategic plan for advancing Indonesia’s electric
vehicle (EV) industry. It emphasizes fostering
innovation and sustainability while augmenting the
quality of life for all Indonesians.

Agus Gumiwang Kartasasmita

Minister of Industry, Indonesia

Indonesia’s Electric Vehicle Outlook 7

The Mission Indonesia is committed to addressing climate change
by transitioning its energy landscape to be powered

to Catalyze by more sustainable sources.

Indonesia’s EV Achieving Indonesia’s target of net zero emissions by

2060, or sooner, is no easy feat. We need to prioritize

Ecosystem
the decarbonization of industries that contribute the
most emissions.

Mobility is a significant contributor to carbon emissions

in Indonesia. Therefore, electrifying Indonesia’s
transport network by establishing a sustainable
electric mobility industry is a critical part of the overall
net zero emissions goal.

Given the multifaceted nature of this emerging

industry and the presence of strong incumbent
players, it’s crucial to foster collaborative efforts
among key players in the electric vehicle (EV)
ecosystem. This should be supported by a
comprehensive regulatory environment.

In executing the mandate set out by President Jokowi

in Perpres no.55/2019, Inpres no.7/2022, and Permen
ESDM no.1/2023, Indonesia’s state-owned enterprises
are implementing various strategic efforts to build an
end-to-end, integrated EV ecosystem.

Pertamina, along with its sub-holding company,

Pertamina New & Renewable Energy, is spearheading
various strategic efforts in EV ecosystem development,
particularly in battery packing, infrastructure, and
battery-as-a-service.

PLN, the nation’s sole electricity provider, is also

establishing a network of swapping and charging
stations.

AEML is a forum and a non-profit organization that

acts as the industry body, thought leader, and public
policy advocate for the EV ecosystem. AEML engages,
sustains, and grows the EV ecosystem through
partnerships with vehicle brand owners, component

Indonesia’s Electric Vehicle Outlook 8

“Our mission to suppliers, battery providers, and infrastructure players.

electrify mobility AEML values collaborative efforts, sharing best

practices, and benchmarking with other countries.
in Indonesia
We partner with the government of Indonesia,
is based on a international organizations, key actors in the EV
ecosystem, as well as other associations, to reach out
calling to protect to more people and promote a positive campaign for
EVs.
the environment
Our mission to electrify mobility in Indonesia is based
by reducing on a calling to protect the environment by reducing
pollution for future generations.
pollution
AEML is committed to supporting the adoption of EVs
for future and fostering the creation of a globally competitive EV
ecosystem.
generations.”
Dannif Utojo Danusaputro
AEML Chairman

Indonesia’s Electric Vehicle Outlook 9

 Indonesia’s US$20B+ opportunity:
Electric mobility drives energy transition.

OVERVIEW

Estimated
Indonesia
Indicative EBIT Headwinds Tailwinds
market size
($B, 2030)

Cell Supply-chain
manufacturing 3-4.5 5-8%2 challenges,
Rise in pro-
and battery increasing
domestic
mgmt. system commodity costs
manufacturing
targets and
Rising battery / Growing
Auto R&D and regulation
12.5-15 10-12%2 component costs e-2W
manufacturing
(e.g., lithium) demand,
given lower
Pressure on dealer Growing
6-10% cost and
margins due to consumer EV
depends on OEM denser
Vehicle sales higher EV costs and demand and
1-21 partnership, urbanization
and dealership rise of online OEM consumer
agreements, in SEA
sales channels subsidies by
discounts, etc.
government

Uncertain
Profitability has Commercial operators
Charging / changing
2-3 yet to be proven building onsite charging to
infrastructure government
in US markets attract traffic
regulations

Service, Reduced aftersales Potential emergence for

maintenance care required for
0.5-1.5 4-8% 2 end-of-life battery mgmt.
and battery EVs vs. ICE market/recycling
recycling3

Indonesia’s Electric Vehicle Outlook 11

 ASSESSMENT

Room
Adoption Regulatory Overall assessment for
Scalability for local
readiness support Indonesia
player

Cell
Raw material advantage (rich in
manufacturing
nickel, cobalt, and other rare earth
and battery
metals)
mgmt. system

Auto R&D and

Potential to
manufacturing
scale e-2Ws
manufacturing
Limited
with foreign
opportunity for
and local OEMs
new player to
Vehicle sales
deal major 4W
and dealership
brands, EV-only
pure-plays are
Opportunity
rare
for 2Ws
Opportunity for manufacturer
local corporate to partner with
fleet companies
to scale and
(e.g., ride-
operate, smaller
hailing) to
opportunity for
develop EV
Charging battery swapping,
ecosystem
infrastructure dominated by
OEMs
Smaller
opportunity as
hardware/R&D
limited in SEA

Very early, as EV adoption is

Service,
driven by lower servicing needs
maintenance
and costs compared to ICE
and battery
vehicles and limited battery
recycling3 supply.

Attractive Opportunistically attractive Nascent

Note: 2W refers to two-wheelers (e.g., motorbike) and 4W refers to four-wheelers (e.g., car); (1) Does not include leasing/secondhand

market; (2) Based on global players; (3) Battery recycling industry not expected to be sizeable by 2030 since EV industry is still

nascent in SEA and the average battery life is 10 years

Sources: Bain Temasek Green Economy Report, Team analysis

Indonesia’s Electric Vehicle Outlook 12

 Indonesia has taken significant steps in recent years to
establish a strong foundation for a prosperous electric
vehicle industry.

Key Events Timeline in Indonesia’s Electric Vehicle Ecosystem

The Minister of State-

Owned Enterprises
(SOEs) encouraged
the use of EVs by the
government and its
businesses.

MoI increases EV 2022

ambitions, creates The General Plan of
Indonesia Battery National Energy (RUEN)
Corporation (IBC). is established.

2021 2017

Dec 2020 2023 Jan 2019

MoU signed with New EV regulations PLN launches first
LG Chemicals for a cover subsidies, road electric charging
US$9.8B investment in restriction bypass, and station in Indonesia.
battery production. improved electricity
prices.

2020 2019
The Ministry of Industry TransJakarta launches
(MoI) issues a new trial of electric busses, first
regulation on the e-taxi fleet by Bluebird.
production and testing Jan 2020 Presidential Regulation
of EVs. No. 55 is signed on the
Grab launches EV fleet
in Jakarta & Bali. promotion of battery-
powered road vehicles,
outlining fiscal and non-
fiscal incentives.

Indonesia’s Electric Vehicle Outlook 13

 Current readiness and priority status of EV segments
in the Indonesian market:

READY FOR SCALABLE DEPLOYMENT

Corporate-supported
motorcycles, such as
those used for deliveries

Electric buses

Private electric two-

wheel vehicles

Electric minibuses (angkots)

and other forms of small
public transportation

Electric taxis

Private electric cars

EARLY STAGES OF DEVELOPMENT

Sources: IESR, Press Search

Indonesia’s Electric Vehicle Outlook 14

 Two national electric vehicle
production targets exist, but the lack
of a unified governing body causes
implementation problems.

1 2019 General Plan of National Energy (RUEN)

Target of Target of Target of Target of

2,200 711,000 2.1 million 100%
battery electric hybrid cars by 2025 battery electric bikes electric vehicle (EV)
vehicles (BEVs) by (BEVs) by 2025 sales by 2040
2025

2 Ministry of Industry Plan for 2020/21

Target of Target of Target of

400,000 1.8 million 29.3%
battery electric vehicles battery electric bikes reduction in greenhouse
(BEVs) by 2025 (BEVs) by 2025 emissions by 2030

Sources: RUEN, KEMENPERIN, AHK

Indonesia’s Electric Vehicle Outlook 15

 Indonesia’s current EV penetration level is similar to
China’s ten years ago, indicating significant growth
potential.

EV Penetration

MARKETS 4W1 2W2

1.0% 0.5%
Mainland China
15.0% 19.7%

0.0% 0.1%
India
0.5% 0.9%

0.0% 0.0%
Taiwan
3.1% 8.5%

0.3%
South Korea Limited 2W adoption
7.5%

0.9%
USA Limited 2W adoption
4.2%

1.7%
European Union Limited 2W adoption
16.1%

Indonesia Limited 4W adoption

0.2%

1.2%
Vietnam Limited 4W adoption
9.7%

2015 2021

1. BEV + PHEV sales of total passenger car vehicle sales

2. Excluding bicycles

Sources: IEA, Statista, ICCT

Indonesia’s Electric Vehicle Outlook 16

 Local ecosystems need to address several challenges to
achieve the government’s EV growth plans

1 3
Higher costs
Limited investment
(upfront incl.
in BSS/ charging
financing & total
infra
cost of ownership)

3
Reliant on imports with tariffs
High capital
and additional logistics costs
investment for BSS/
Sub-scale local production
charging infra
leads to higher costs

LIMITED LIMITED BSS/

LOCAL LOW DEMAND CHARGING
PRODUCTION NETWORK

4
Limited BEV parts
supply chain (e.g.,
battery, e-motor) Not relevant for
BSS model

4 2
High capital Home charging
Insufficient vehicle
investment for capacity
specs
new EV production constraints

Current situation Demand-side challenge Supply-side challenge Deep-dive

BSS: Battery Swapping Station, BEV: Battery Electric Vehicle

Sources: Stakeholder Interviews, BCG Analysis

Indonesia’s Electric Vehicle Outlook 17

KEY PLAYERS &
INFRASTRUCTURE

Developing the electric vehicle ecosystem in Indonesia

involves several key players such as state-owned
enterprises Pertamina and PLN for infrastructure, and
Indonesia Battery Corporation for collaborations with foreign
giants like LG Chemical and CATL for battery production.

Major brands like Hyundai, BYD, and Tesla dominate the

4W space, while the 2W space is fragmented with local
and low-cost global original equipment manufacturers
competing for market share.

B2B channels, such as Grab and Bluebird, have shown

promising results in implementing EVs in their fleets,
alongside Damri and TransJakarta. These companies are
collaborating to establish a more sustainable and eco-
friendly transportation system in Indonesia.

As of now, there are 439 general charging stations and

961 battery swap stations available for electric vehicles
in Indonesia. These stations provide charging options for
electric cars, bikes, and buses, but the infrastructure is
expected to expand with the growth of the industry.

PLN has set a target of building 6,316 general charging

stations and 14,000 battery swap stations by 2025 to
facilitate the growth and adoption of electric vehicles.

Indonesia’s Electric Vehicle Outlook 18

Key players in the Indonesian electric vehicle ecosystem

PLN Sole electricity distributor

Ministry of Oil and gas, new and

Pertamina renewable energy
State-Owned
Enterprises LEN Electrical products

Jasamarga Toll road management

Ministry of
Research and BPPT New tech development
Technology

Public Transport Operators of buses and trams

(city-owned) (TransJakarta, TransBandung, etc)

Agency for the

Ministry of study of industrial
Industry policy, climate
and quality

Coordinating Ministry
STATE for Maritime and Coordinates investment between ministries
Investment Affairs

Ministry of Energy Handles EV infrastructure such as charging stations,

and Mineral battery swapping stations (BSS), conversion and
Resources energy pricing

Ministry of Develops electrification plan and is responsible for

Transport public transportation

Traffic police Issues vehicle registration, licenses, and permits

Ministry of Provides guidance to potential investors, assists with

Investment necessary permits and licenses to establish plants

Indonesia’s Electric Vehicle Outlook 19

 Private Bus
DAMRI
Operators

Leaders: Toyota, Hyundai, BYD,

4+ Wheels
Mitsubishi, Honda, Tesla, VKTR
EV Producers

Leaders: Honda, Gesits, Selis,

2 Wheels
Alva One, Viar

Invested US$9.8Bn in
LG Chem
battery production

Indonesia
Battery Battery SOE that helps to develop
PRIVATE Production Corporation the EV battery ecosystem
(IBC)

Invested US$5Bn in battery

CATL
production

15k+ EVs across Indonesia

Grab & Gojek
(GrabWheels, etc)

Taxis
Launched e-Taxis with BYD
Bluebird
and Tesla

Battery swapping
Ecosystem Electrum, Swap, stations and EV bikes,
Players Volta, Oyika collaborations with ride-
hailing companies

Sources: ADB, Catapult, Press Search

Indonesia’s Electric Vehicle Outlook 20

 We must accelerate the construction of EV charging
facilities to keep up with the increasing demand for EVs

Charging stations in operation

As of Q4 2022, there are 439 high-powered general charging stations

available in 328 public locations for EV charging.

The target is to have 2,500 charging stations by 2025 and 7,000 by 2030.

Battery swapping stations in operation

As of Q4 2022, there are 961 battery swap stations in Indonesia.

This is well below the stated targets (4,000 by end of 2020, 14,000 by 2025, and
52,000 by 2030).

The potential scale for battery swapping stations is hindered by the varying battery types and
requirements, indicating the need for a unified infrastructure that can accommodate multiple
brands.

Sources: DJK, ESDM, Databoks

Indonesia’s Electric Vehicle Outlook 21

Sales &
Localized
Production

As of Q4 2022, 33,600 EVs were registered in

Indonesia, with 7,600 four-wheel EVs on the
roads, a significant increase from 230 previously.
The sales growth is mainly driven by affordable
Chinese companies like Wuling, as well as higher-
end brands that have committed over US$3 billion
for 4-wheeler manufacturing in Indonesia. Despite
this growth, the target sales goal of 400,000 units
by 2025 according to the Ministry of Industry plan
suggests there is still significant untapped market
potential for EVs in Indonesia.

The two-wheel vehicle market in Indonesia is

growing rapidly. In 2020, 1,947 two-wheel EVs
were registered, with local production from 15
companies with a capacity of 877,000 units per
year. As of end-2022, there were already 26,000
2-Wheeler EVs on the road, driven by B2B usage
and direct consumer purchases. The Ministry of
Industry’s updated plan aims to sell 750,000 units
by 2025, reflecting the high demand for two-wheel
vehicles in Indonesia.

Indonesia’s Electric Vehicle Outlook 22

 Significant investments have been made for EV
production in Indonesia for 2W and 4W vehicles

Investments by large, global original equipment manufacturers in 4W

In 2019, announced an In 2020, announced an In 2020, announced an

investment of US$1.5B to investment of US$370M investment of US$2B
produce EVs in West Java plant to produce EVs in Indonesia to produce EVs in Indonesia

In 2021, announced an investment of

Invested US$1B from 2015-2021 for localized
US$779M to produce hybrid and battery EV production in Indonesia
EVs in Bekasi

Numbers

33,600
EVs
were registered
in Indonesia as
of Q4 2022.

Indonesia’s Electric Vehicle Outlook 23

 2W (number in units)

4W (number in units)

Sources: ESDM, AISI, Katadata

Local players investing in the 2W ecosystem

Company Investors

Indonesia’s Electric Vehicle Outlook 24

 B2B partnerships have accelerated electric vehicle
adoption

Most 2W EV sales today are to businesses that use them for their fleet
of delivery couriers and field agents

Companies Initiatives

Grab Indonesia Has operated 14,000 electric vehicle fleets. The numbers
accumulated since electrification started in 2019.

Lazada Logistics Through its logistics unit Lazada Logistics, in collaboration with
PT Smoot Motor Indonesia (Smoot) as an electric vehicle provider.

PLN Use 264 Gesits Electric Motors for operational vehicles.

SiCepat Ekspres In collaboration with PT TFAS Energi Indonesia (TEI) in purchasing

10,000 units of Volta electric motorbikes for operational vehicles.

Sources: Kompas, Indotelko, PLN, Kontan

“ The EV paradigm in Indonesia brings opportunities

to address the environment, boost the economy,
and embrace sustainable transportation. Soul
Parking is excited to support widespread EV adoption
by providing and collaborating on charging
infrastructure. Together, we can drive the transition
to electrification, shaping a brighter and more
sustainable future for Indonesia.
“
Kenneth Darmansjah
Co-founder & CEO, Soul Parking
[email protected]

Indonesia’s Electric Vehicle Outlook 25

 Indonesia’s 2W market shows potential for an EV trend,
but key gaps and needs remain.
Alva One
IDR 34.9 M

Gesits G1
IDR 28.7 M
T1800 CM
IDR 33.5 M Honda PCX
IDR 32.1 M

Honda Vario
Price (in million IDR)

Selis E-max
IDR 22 M IDR 22.2 M

Price gap of IDR 5-11 M

Volta 401 between e2W and ICE in

IDR 15.7 M mass market segment

BF-Q7 Viar Q1 despite still lower specs

IDR 13.2 M IDR 18.95 M Yamaha Mio Honda Beat

IDR 17.1 M IDR 17.6 M

TVS Dazz
IDR 14.5 M

ECGO-2 Budget Mass Premium

IDR 11 M

EVs are still relatively expensive compared to

traditional vehicles, unless government subsidies or
incentives are factored in.

EVs still have lower range, speed, and incline capacity

than similarly priced internal combustion engine (ICE)
vehicles, which affects their overall quality.

Indonesia’s Electric Vehicle Outlook 26

Local producers may gain more power in Indonesia’s 2W
market with the shift to EV, which has been dominated by
Japanese players.

Motorcycle sales (2021-2022)

Honda

Yamaha

Kawasaki

Others

Suzuki

Sources: Indonesia Automobile Association, Press Search

Motorcycle purchases in Indonesia are heavily reliant on leasing, where Astra

FIF (which has the same parent company as Honda motors) is one of the
strongest players

Big 4 brands have heavy dealer networks and distribution, allowing for heavy
presence in Tier-2 and 3 cities

In Japan, the Big 4 are teaming up on motorcycle development & testing,

in addition to developing a shared swappable battery platform for their
e-motorbikes

Japanese players are moving slow in EV adoption due to lack of expertise and
fear of losing market share.

Local producers have the advantage of similar starting points and the ability
to learn from successful EV markets in China and India.

Indonesia’s Electric Vehicle Outlook 27

Public
Sentiment

Public knowledge on EVs:

63% of the public is knowledgeable about electric
bikes, while 46% are knowledgeable about electric
cars.

Public perception:
The public views EVs positively for fuel efficiency
and lower operating costs but is relatively
indifferent toward their environmental impact.
A lack of incentives and infrastructure hinder
adoption. Subsidies and visibility of infrastructure
may improve this perception.

Indonesia’s Electric Vehicle Outlook 28

 Public awareness of EVs has improved, but concerns
about quality, design, and infrastructure remain.
Awareness on electric vehicles
Do you know Indonesia already has an e-motorcycle model available for purchase?

37% N=100 63%

Yes Negative

Perception on electric vehicles

What is your first impression on e-motorcycle features in general?

Less maintenance cost

Riding range

Model & appearance

Pricing

Charging infrastructure

Dimension & size

Positive Negative N=63

Source: BCG

EV positive campaign and infrastructure development, including battery charging and swapping
infrastructure, are important to accelerate EV adoption in Indonesia.

Indonesia’s Electric Vehicle Outlook 29

Electric bikes have shown lower overall operational costs,
and can be further reduced via government subsidies.

Total cost of ownership for 2 Wheelers

5 Year Total Cost of Ownership (in USD)

Total cost of ownership for EVs can be significantly lower than that of traditional (ICE)
2-wheelers, given savings from energy costs that can go north of 40% and operating costs
savings of 50%.
However, the majority of purchasing costs (vehicle prices) are still higher than incumbent
ICE. EV companies will need to execute strong financing / payment plans to accelerate EV
conversion.
Source: Team analysis

Comparison of fuel subsidy spending for ICE and incentives required for e2W
over 6-year lifetime
10.3-12.5
9.7
8.6-10.3
2.8-3.5
1.1-1.3
Unit: IDR m

7.5-91 7.5-9

Fuel subsidy per vehicle Home charging model BSS model

Funding (incentive) for 1 battery4 Electricity discount from PLN2

Electricity discount to offer BSS the same rate with SPKLU3

1. Based on average electricity subsidy from PLN

2. Subsidy needed to reduce from IDR 1644/ kWh to IDR 714/ kWh in electricity tariff for BSS
3. For battery of 1.7-3 kWh with the price of $200-300/ kWh
Note: Assume 6 years as e2W lifetime, average travel distance per vehicle per day is 50 km,
ICE fuel efficiency is 50 km/l, electricity efficiency is 1.4-1.7 kWh/ 50 km

Sources: Press Search, BCG Analysis

Indonesia’s Electric Vehicle Outlook 30

Industry &
Supply Chain

Cathode precursor production in Indonesia is

carried out in two locations (Indonesia Morowali
Industrial Park and Indonesia Weda Bay Industrial
Park). The total investment for this production thus
far has reached around US$2.6 billion, indicating
significant economic interest in this sector.

For cell and battery module production, the

Indonesian government is investing US$5 billion
to build a battery factory backed by CATL. A
consortium led by the second largest EV battery
maker LG Energy has also set aside US$9 billion to
invest in an integrated battery project in the country
with the local supply chain. These investments
point to a growing interest in the development and
production of batteries in Indonesia.

The Indonesian Battery Corporation is a joint

venture between Pertamina, PLN, MIND ID, and
Antam. This partnership aims to develop both
upstream and downstream sectors of the battery
industry in Indonesia. With such collaborations
and investments, the country is well-positioned to
establish a significant presence in the global battery
market (estimated to overtake China for nickel
processing within 2025) and support the emerging
EV industry locally.

Indonesia’s Electric Vehicle Outlook 31

 The Indonesian ecosystem is poised to benefit from the
BEV cost structure

Internal Combustion Engine (ICE) Vehicle cost structure

ICE Vehicle

Chassis Body Drivetrain Equipment Others

Battery Electric Vehicles (BEV) Vehicle cost structure

BEV

Chassis Body Drivetrain Equipment Others Battery

From the total battery costs, the lithium ion packs currently make up 40-70%
Nickel, of which Indonesia has 21Mn tons of reserve (the most in the world) makes
up and important aspect of the lithium ion build

Due to Indonesia’s rich minerals supply, and large demand

for vehicles, the Indonesian government has initiated key
investments to take part in the production of materials in the
supply chain.

As more batteries are stocked and more use cases in play,

Indonesia can develop a thriving battery recycling industry in
the future as well, further reducing the BEV costs.

Source: UC Davis

Indonesia’s Electric Vehicle Outlook 32

 Indonesia’s nickel reserves show the country’s local
strength in raw material

Global Advantage
Indonesia’s nickel reserves could fuel its electric vehicle ambitions

Nickel reserves (tons)

Indonesia

Australia

Brazil

Russia

Others

Cuba

Philippines

South Africa

China

Canada

Guatemala

Madagascar

Columbia

United States

Source: U.S. Geological Survey

Indonesia’s Electric Vehicle Outlook 33

 Indonesia is currently building up its infrastructure
across the EV supply chain

Ministry of Energy
and Mineral
Extraction of raw ores/
Resources,
MINING material required for
Antam, Inalum,
battery materials
private local
players.

Processing and refining

of raw material into RAW MATERIAL
precursors for battery PROCESSING
materials

Manufacture of
specialised battery Ministry of
CELL COMPONENT components: cathode Industry,
PRODUCTION and anode materials, Indonesia Battery
electrolytes, separators Corporation, EV
and casings battery project
Fabrication of battery acceleration
cells, then integration team, private
into the battery pack BATTERY CELL/PACK sector
including electronics, PRODUCTION partnerships (LG,
sensors and battery CATL)
management system

Manufacture of vehicle
EV players,
and integration of
EV PRODUCTION Indonesia EV
battery and subsystem
association
hardware

Charging and battery Pertamina, PLN,

CHARGING
swaping station private sector
INFRASTRUCTURE
distribution partnerships

Sources: IESR, Press Search

Indonesia’s Electric Vehicle Outlook 34

Policy &
Regulation

General sentiment:
The overall sentiment toward EVs in the country
is positive, but it would need more support from
regulators to develop a unified plan.

Financial incentives:
The government offers financial incentives to
companies that invest in EVs. For those that invest
IDR 10 trillion (~US$647 million) or more, there is a
five-year corporate income tax holiday. Smaller
investments are also eligible for mini-tax holidays.

EV owners can benefit from reduced luxury taxes

for premium vehicles, while the mass market can
enjoy an IDR 7 million (~US$453) subsidy from
March 2023 for 2W EV purchases. 4W EVs will also
be given subsidies based on government quota
and restrictions.

EV owners can also benefit from improved

discounts on electricity for home charging.

Other regulations:
To encourage local production of EVs, there are
regulations that require a minimum of 40% local
components by 2023. Other regulations include
traffic restrictions exemptions.

Indonesia’s Electric Vehicle Outlook 35

Policy clusters Policy Key authorities

End-user Lower risk weight of 75% for loans for EV

financial purchasing (compared to 100% for other
incentives industries)
IDR 7 million subsidy for EV-2Wheelers;
other subsidies for 4-Wheelers (currently Financial Services
Authority
limited to individuals and MSMEs that
meet conditions; EVs will have to meet
DEMAND
minimum local production requirement)

Presidential
End-user tax Luxury goods tax reduction for EVs - 0% for decree
incentives BEV/FCEV if local content requirement met Ministry of
Finance

Preferential Exemption from road restrictions

access Parking fee discount
Presidential decree

Manufacturer Lower risk weight of 75% for loans for

financial EV value chain activities (compared to
incentives standard 100%) and exemption from
Financial Services
maximum credit limit if guaranteed by Authority
BUMN

Presidential
Manufacturer CIT holiday (up to 20 years) for investment
decree
tax incentives in EV industry Ministry of
SUPPLY Import duty exemption on SKD kits for EV Finance

Regulatory Government grants free access to

hurdle government owned BEV-related
reduction technology to EV players Presidential decree

Capabilities Tax deduction of up to 300% of costs

building incurred in R&D, technological innovation
activities and industrial vocation
Professional certification for battery Presidential decree
industry

4W+2W 4W only

Indonesia’s Electric Vehicle Outlook 36

 Policy clusters Policy Key authorities

Charging Discounted rate for home power capacity

network upgrade & special electric price rates up to
support 30% for home charging Ministry of Energy &
Mineral Resources
35% - 50% discount on electricity rates
given to SPKLU business
INFRA. & Ease of SPKLU licensing (simplified process
State Electric
ENABLERS steps) Company

Ministry of Energy &

Industry Setting up product certification & technical Mineral Resources
standardization standards for EV industry (standards for EV Ministry of
Investment / BKPM
charging infra. in place)
Presidential
decree

4W+2W 4W only

Sources: Presidential Decree, Ministry of Finance, Ministry of Energy & Mineral Resources, Ministry of Investment, PLN, OJK

“ We’re at a critical juncture in the transition from

internal combustion engines to EVs - a transformation
demanding adaptation. Embracing this change,
Otoklix is reorienting to become a trailblazer in the
EV aftermarket sector, partnering with Segway
Motors Indonesia for post-sale services. This move
underscores our shared commitment to an electrified
future, demonstrating our collective drive for major
industry progress.
“
Martin Reyhan Suryohusodo
Co-founder & CEO, Otoklix
[email protected]

Indonesia’s Electric Vehicle Outlook 37

 Case study: China’s government support is helping drive
EV penetration

NASCENT INDUSTRY GROWING INDUSTRY MATURITY

High auto manufacturing Growing EV penetration &

capacity & minimal EV production capacity, ramp
penetration, spark EV down subsidies
adoption

Extended subsidy
NEV Penetration period while
rate (%) continuing phasing
down 15
EV infrastructure
reward scheme

Central government4 Extended subsidy

vehicles to be NEV period while continuing
8.5
2009: Market phasing down
became Private NEV purchase
the world’s subsidy pilot
largest
automotive 0.01
1
manufacturer

Dual-credit
NEV1 included in 7 SEIs2
system
Launched “ten cities,
thousand vehicles”
Removed foreign EV
Private NEV purchase Began purchase
OEM’s onshore limitation
subsidy pilot subsidy phase down

Some cities3: Vehicle

registration privilege

1. NEV = New energy vehicle

2. SEI = Strategic emerging industries
3. Beijing, Shanghai, Guangzhou, Tianjin, Hangzhou, Shenzhen
4. Required half of new vehicles purchased by China’s central government be NEV within 5 years

Sources: IEA, ICCT, BCG Analysis

Indonesia’s Electric Vehicle Outlook 38

Case study: India’s government support is helping drive
EV penetration

E2W vs ICE Comparison

110-145

Subsidy 45-50

65-100 e2W subsidy is linked to battery size

($185/ kWh) and post-subsidy price is
ICE purchase cost 70-90 comparable to ICE price

Hero Optima CX INR 110 k Hero Splendor Plus INR 70 k

Max speed: 45 km/h Max speed: 93 km/h
Range: 82 km/battery Range: 700 km

Ola S1 INR 145 k TVS Raider INR 90 k

Max speed: 95 km/h Max speed: 99 km/h

Range: 128 km/battery Range: 650 km

E2W Penetration (%)

FAME2 launched, $112M & Limited impact from Further policies

limited to 427 charging Phase 1, thus FAME was introduced thereafter
stations, end-user expanded with $1.25B (preferential access, PLI,
financial subsidies budget to subsidize over tax benefits)
1.5 m EVs
2.5

0.3 0.9

0.1

Key takeaways for Indonesia

Incentives for end-users required to catalyze the industry and bring e2W
& ICE price parity closer

Indonesia’s Electric Vehicle Outlook 39

 In Indonesia, getting a loan greatly affects whether
people buy EVs
Buying vehicles generally accounts for about 10% of the total ownership cost

Purchase Cost Interest

Energy Cost Operating Cost

Note: These calculations are based

on a total cost of ownership over five
years with 180,000 km of usage, and a
loan with average multifinance rates
Economy ICE Bike Maxi ICE Bike of approximately 2.5% for 2 years.

70% of Indonesians purchase both 2W and 4W vehicles

through credit schemes

Sources: Toyota Auto Finance, Astra Honda Motor, KADIN Indonesia

The high cost of financing has been a major hurdle to EV adoption, but recent
government involvement has helped to reduce the problem

Traditionally, interest rates for ICE vehicles have been 21% per annum, and 29% per
annum for EVs due to uncertainties in after-sales service and the used car market.
However, recent incentives from corporations towards EVs, support from the Financial
Services Authority (OJK), and the Himbara initiative’s focus on EVs have improved the
affordability of financing.
A few finance companies have begun offering rates as low as 27% per annum
(for one-year loans) despite the higher overall rates. This could potentially be
less than some ICE vehicle financing rates, though further efforts are needed in
implementing and promoting this strategy.
Note: As of H1 2023

Players in EV financing in Indonesia

Turno: a disruptor in Indian market that can be used as inspiration

Turno is an Indian electric vehicle platform that provides a range of
financing choices to both individuals and companies.

Indonesia’s Electric Vehicle Outlook 40

 EV financing has also become top of mind for the
government, but needs more support to ensure improved
total cost of ownership
New government support will help increase affordability

OJK Incentivizes Financial Services to Boost Electric Vehicle Industry

The Financial Services Authority (OJK) in a written statement asserted that

it fully supports the government’s program in accelerating the battery-
based electric vehicles (KBLBB) industry by distributing multiple forms of
incentives.

“We have issued incentives in the banking, capital market, and non-
bank financial industry (IKNB) sectors to increase the role of the financial
services industry in supporting the electric vehicle program,” said OJK
Public Relations Director Darmansyah in a written statement, November 30.

In the field of banking, the OJK provides incentives by relaxing the

calculation of Risk Weighted Assets (RWA) by reducing the credit risk
weight (ATMR) from 75 percent to 50 percent for electric vehicle production
and consumption until December 31, 2023.

There will also be the provision of funds to debtors with the aim of
purchasing electric vehicles and/or developing the upstream KBLBB
industry—the battery industry, the charging station industry, and the
component industry.

In the capital market sector, OJK provides a discount on green bond

registration statement fees including battery-based electric vehicles
funding to 25 percent of the original levy.

The Indonesia Stock Exchange (IDX) also responded to this by providing

a discount on the green bond’s annual listing fee rate of 50 percent of
the listing fee rate. OJK also provides incentives and initiatives for finance
companies by channeling funds to customers in the context of production
and consumption.

Source: Tempo

Indonesia’s Electric Vehicle Outlook 41

 Recommendations for a conducive EV ecosystem
in Indonesia

Current pain points Recommendations

Higher EV For regulators:

acquisition costs Gather feedback on current incentives and subsidies
Implementation Evaluate the implementation strategy, including aspects
remains unclear such as who should receive support, the amount of support
from operator’s side (considering the budget), eligibility criteria, and processes

For EV players:
Invest in sourcing expertise to have strong supply chain
connections, ideally directly from principal supplier
Identify ideal domestic to international production mix for
TKDN compliance and cost efficiency
Explore financing partnerships with different payment
frequencies to meet the market’s willingness to pay

Unfavorable EV For regulators:

lending & leasing Mandate suitable battery warranties
schemes Ensure equal subsidy, tax, and preferential treatment for EV
Financial institutions bikes with different business models such as battery
are less inclined to swapping, charging, leasing, and more
offer loans or leases
Co-develop and support risk-sharing facilities to limit lending
to EV adopters, or
risks to help financial institutions lease on better terms
they do so with
terms and rates that Continue promoting EVs as a key sector to banks, similar to
are less favorable the ongoing Himbara program.
than those for ICE
For EV players:
Consider exploring warranties and buyback programs to
enable financial institutions to reduce interest rates
Partner with specialized financing companies with higher risk
tolerance to build up credit viability

Sources: Team analysis, IFC

Indonesia’s Electric Vehicle Outlook 42

 Recommendations for a conducive EV ecosystem
in Indonesia

Current pain points Recommendations

Unmet investment For regulators:

into EV Encourage suitable phasing for localizing battery
High capex with components, initially by relaxing import duties on certain
relatively uncertain crucial parts
outcomes Gradually increase local value addition
Strong requirements Establish comprehensive support and incentives for the
for local content but supply side to boost local production and assembly industry
low supply
For EV players:
Build robust plans that incorporate production phasing
and investment risk distribution, including strategies like
partnerships, staged funding rounds, and shared
infrastructure plans
Pinpoint strategic investment opportunities and partnerships
with both local and foreign entities

Limited public For regulators:

knowledge about Involve private sector companies in cooperative initiatives
EVs to broaden market outreach through campaigns, events,
and public engagement
Develop strategies and rules requiring manufacturers to
share information about the benefits of electric vehicles
Launch public awareness campaigns that promote the
positive aspects of electric vehicles

For EV players:
Provide public outreach programs that combine in-person
demonstrations and online educational resources
Interact with local communities and enhance distribution
channels through dealerships
Reinforce collaborations with the public sector and other
compatible sectors such as utilities

Sources: Team analysis, IFC

Indonesia’s Electric Vehicle Outlook 43

Key
Takeaways

Indonesia has a sizable market opportunity worth

US$20 billion in the EV industry.

To accelerate EV production and adoption, the

country needs to maintain favorable policies,
develop infrastructure, and support local
producers in meeting the 40% local components
requirement.

It is imperative for local investors to become

actively involved in the market as soon as possible.

Additionally, partnerships between the

government, state-owned enterprises (SOEs), and
private businesses must be sustained to establish
a robust ecosystem.

The development of leasing, financing, and SaaS

should be prioritized to increase penetration.

A concerted effort to implement these measures

can pave the way for a thriving EV market in
Indonesia.

Indonesia’s Electric Vehicle Outlook 44

 About AEML

AEML is a non-profit organization. We are the industry body, thought leader, and public policy
advocate for the electric vehicle (EV) ecosystem in Indonesia. AEML engages, sustains, and
grows the EV ecosystem through engagement with vehicle brand owners, component suppliers,
battery providers, and infrastructure players.

Through these partnerships, we build collaboration among all stakeholders, creating economic
and social value for Indonesia. Our mission of electrifying mobility in Indonesia is based on
a calling to protect the environment by reducing pollution. AEML will achieve its vision of
supporting the adoption of EVs and fostering the creation of a globally competitive
EV ecosystem.

AEML Leadership:

Bp. Airlangga Hartarto Bp. Dannif Utojo Danusaputro Bp. M. Arsjad Rasjid P.M.
Chairman of the Board of Trustees General Chairman Chairman of the Supervisory Board

Bp. Rian Ernest Tanudjaja Bp. Anugraha Dezmercoledi

Secretary General Executive Director

Indonesia’s Electric Vehicle Outlook 45

 About AC Ventures

AC Ventures (ACV) is a top Southeast Asian venture capital firm that invests in
early-stage startups focused on Indonesia and ASEAN, with over US$500 million in assets
under management.

The firm’s mission is to empower entrepreneurs with more than just capital by combining
operational experience, industry knowledge, deep local networks, and resources.

ACV’s team has invested in over 120 tech companies in the region since 2012. With a team of
more than 35 professionals led by Adrian Li, Michael Soerijadji, Helen Wong, and Pandu Sjahrir, it
has offices in Jakarta and Singapore.

Michael Soerijadji Adrian Li

Founder and Managing Partner Founder and Managing Partner

Helen Wong Pandu Sjahrir

Managing Partner Founding Partner

[email protected]

Indonesia’s Electric Vehicle Outlook 46