Key Takeaways:
- Indonesia's electric vehicle ecosystem continues to develop to meet demand and support the energy transition.
- The Indonesian government offers several incentives to buyers and manufacturers to accelerate electric vehicle adoption.
- Three types of electric vehicles are commonly found on the market: BEVs, PHEVs, and HEVs.
To drive the energy transition, the Indonesian government has launched various initiatives, including building an electric vehicle ecosystem. This ecosystem is also expected to strengthen the domestic industry and support new economic growth. So, what is the potential of Indonesia's electric vehicle ecosystem? Find out more in this article!
Types of Electric Vehicles
Before exploring Indonesia's electric vehicle ecosystem, you need to understand the different types. Generally, electric vehicles are categorized into three types based on their electric motors: BEV, PHEV, and HEV.
1. Battery Electric Vehicles (BEV)
Also known as All-Electric Vehicles (AEV), these vehicles operate entirely on electric motors and are powered by high-capacity internal batteries. BEVs use regenerative braking to reduce energy loss while driving.
One advantage of BEVs is that their energy costs are lower than those of gasoline-powered vehicles. Their motors are also quiet and require minimal maintenance. However, you must charge the vehicle, so you need to calculate your power needs while driving to avoid running out of charge before reaching the nearest Electric Vehicle Charging Station (EVCS).
2. Plug-in Hybrid Electric Vehicle (PHEV)
This vehicle uses an internal combustion engine (ICE), like a gasoline-powered vehicle, along with an electric motor. As a result, a PHEV can generate power using both gasoline and an electric battery.
This hybrid system allows you to use electric mode for short distances and conventional mode for long distances. Although it relies on gasoline, a PHEV also needs to be charged to remain efficient.
3. Hybrid Electric Vehicle (HEV)
HEVs can be fueled with gasoline like conventional vehicles and have a smaller internal battery than BEVs. As a result, most energy comes from gasoline, and you don't need to charge the battery. However, their purchase price is higher than that of conventional gasoline-powered vehicles.
In addition to these three common types, you may also come across Fuel Cell Electric Vehicles (FCEVs), which use hydrogen to generate electricity.
More to explore: 8 Eco-Friendly Technology Products for Reducing Carbon Emissions
The Potential of the EV Ecosystem in Indonesia
The development of Indonesia's electric vehicle ecosystem aims to strengthen industrial and technological self-reliance and enhance competitiveness in the global economy. This ecosystem is also expected to create more opportunities for various industries to contribute to the national supply chain.
This ecosystem is also designed to support a transition to cleaner energy, reduce petroleum imports, lower greenhouse gas emissions, and foster economic growth in Indonesia.
So, how is Indonesia building an eco-friendly electric vehicle ecosystem? The Indonesian government released the Regulation of the President of the Republic of Indonesia Number 55 of 2019 on the Acceleration of the Battery Electric Vehicle Program for Road Transportation. This regulation not only covers the implementation of the electric vehicle program but also establishes incentives to encourage the public to switch to electric vehicles.
Furthermore, the government has set ambitious targets for Indonesia’s electric vehicle ecosystem by 2030, including 13 million electric two-wheelers and 2 million electric cars on the road. That is why the government is promoting the development of electric vehicle infrastructure, such as public charging stations and road paving.
One of the key factors that is driving the growth of this ecosystem is nickel, a key raw material for manufacturing electric vehicle batteries. With billions of metric tons of nickel ore reserves, Indonesia cannot only export nickel but also use it for the electric vehicle industry.
Furthermore, according to the 2025 Electric Vehicle Readiness Survey report released by PwC, Indonesia's electric vehicle segment is projected to grow by 49% by 2025.
PwC also noted that Indonesia’s readiness to embrace the electric vehicle ecosystem, compared to six other ASEAN countries, is projected to reach an index of 2.8 (out of 5) by 2025, up from 2.0 in 2024. This readiness is assessed based on infrastructure availability, demand, supply, and government incentives. For reference, Malaysia has an index of 2.8, Thailand 2.9, the Philippines 2.0, Vietnam 3.0, and Singapore 4.3 in 2025.
Our country has a fairly promising opportunity to adopt electric vehicles. Demand for electric vehicles in our country also continues to grow, suggesting Indonesia is well prepared to develop an electric vehicle ecosystem.
Related reading: Energy Efficiency as an Industry Effort to Manage Energy
How Is the EV Ecosystem Supported in Indonesia?
One of the main drivers behind the growing interest in electric vehicles among Indonesians is government incentives. The following are several electric vehicle regulations that have been implemented:
1. VAT Reduction for Local Manufacturers
The government has issued a regulation reducing the Value-Added Tax (VAT) from 11% to 1% for locally manufactured electric vehicles that meet the 40% Local Content Requirement (Tingkat Komponen Dalam Negeri/TKDN). This means buyers only pay a 1% tax, making the cost more affordable.
2. Electric Vehicle Purchase Subsidies
The government provided subsidies for the purchase of electric vehicles that are locally produced or have a high local content in 2023. These subsidies can reduce the price of electric vehicles by up to 25% of the original price.
3. Incentives for Infrastructure Companies
The government is also providing incentives for companies investing in the development of Public Electric Vehicle Charging Stations (PEVCS), including streamlined PEVCS licensing and tax reductions. These incentives support the accelerated development of PEVCS throughout Indonesia.
That concludes the information regarding the electric vehicle ecosystem. The accelerated development of this ecosystem is expected to support Indonesia in achieving net-zero emissions by 2060 and transitioning to more sustainable energy.
Regarding the electric vehicle ecosystem, PT Krakatau Chandra Energi (KCE), a subsidiary of PT Chandra Daya Investasi Tbk (CDI), is supporting its development in collaboration with PT Mobil Anak Bangsa (MAB).
KCE and MAB are collaborating to develop e-mobility and adopt electric vehicles in their industrial operations. For reference, one of KCE’s core business pillars is new and renewable energy (EBT), which supports engineering, procurement, and construction (EPC) for solar panels and the development of EV charging stations. Meanwhile, MAB is a domestic manufacturer of electric buses and trucks with a local content (TKDN) ratio exceeding 80%.
Additionally, KCE has also launched EV charging stations in the Wisma Barito Pacific complex in Jakarta, specifically at Wisma Barito Pacific I and II, which are managed by KCE’s subsidiary, PT Krakatau Sarana Energi (KSE).
You may also like: Smart Grid: Definition, Benefits, and How It Works
Frequently Asked Questions (FAQ)
Here are some frequently asked questions about the electric vehicle ecosystem:
1. What Is the EV Ecosystem?
The EV (electric vehicle) ecosystem encompasses the entire life cycle of electric vehicles, from research and development (R&D) and manufacturing to charging infrastructure, battery production, and customer support.
2. What Is the Environmental Impact of Electric Vehicles?
Electric vehicles are more environmentally friendly since they produce no noise pollution, reduce air pollution, and are more energy-efficient