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Charging Up Indonesia: The Rapid Rise of EVs in Indonesia

Updated: May 15

Back in January 2023, Indonesia's Minister of Investment and Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia stated that the government will achieve its target of developing an electric car battery ecosystem in Indonesia, with the first production planned to start in early 2024.

Whether the declaration is a bit too optimistic is up for debate, but Bahlil has all the right reasons to believe so. Indonesians are eager to invest in electric vehicles. According to research by University of Indonesia back in September 2020, over 70% of Indonesian public are keen to own electric vehicle in which environmental issue is the most popular reason they interested in EV over traditional gasoline powered vehicles.

Data from the Association of Indonesia Automotive Industries (GAIKINDO) reveals significant growth in EV sales over the past three years. In 2020, only 125 units of EVs from any brand were sold in Indonesia. By 2021, sales climbed to 687 units, and in 2022, they surged to 10,327 units.

Furthermore, sales in January-September 2023 witnessed a remarkable 502% increase compared to the previous year, reaching 34,108 units. Hybrid electric vehicles (HEVs) dominated the market, with a market share rising from 59.79% to 76.92%. Battery electric vehicles (BEVs) also showed growth, albeit at a slightly weaker rate.

While the adoption is continuously increasing, there are still several barriers that hinder EV adoption in Indonesia:

As of 2023, Indonesia aims to have 2.5 million total EVs on the road, including 400,000 fully electric cars. The government plans to build 2,400 charging stations, a significant increase from the 267 stations in 195 locations as of March 2022. These efforts reflect Indonesia’s commitment to sustainable transportation and reducing emissions.

The electric vehicle (EV) market in Indonesia presents exciting opportunities for foreign investors. The Indonesian government is actively fostering its EV market by introducing favorable policies. President Joko Widodo’s new Presidential Regulation 55/2019 accelerates EV implementation for public transportation.

Indonesia has developed an ambitious US$17 billion roadmap for the EV sector. The goal is to achieve adoption of 2.1 million electric motorcycles and 400,000 electric cars by 2025 and 20% locally manufactured EVs to boost the domestic industry.

Indonesia’s commitment to EV adoption, supportive policies, and a growing consumer base make it an attractive destination for foreign investors looking to capitalize on the electric vehicle revolution.

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