Electric vehicles (EVs), or Electric Motor Vehicles (EMVs), are part of Indonesia’s mitigation actions. To meet the emission reduction targets under Indonesia’s Nationally Defined Contribution (NDC), electric two-wheelers (E2Ws) are expected to reach 1.8 million by 2025 and 13 million by 2030. Meanwhile, electric four-wheelers (E4Ws) are targeted to reach 0.4 million by 2025 and 2 million by 2030. These targets demonstrate the Indonesian government’s commitment to a successful energy transition with clear performance measures.
According to data from the Association of Indonesian Automotive Industries (Gaikindo), the wholesale volume of battery electric vehicles (BEVs) in the domestic market reached 2,140 units in March 2024. This figure represents a 48.1% month-to-month growth from February 2024, which had sales of 1,444 units. Here is a list of the top 10 electric cars with the highest wholesale sales in the domestic market in March 2024:
- Wuling Binguo EV: 817 units
- Chery Omoda E5: 608 units
- Morris Garage 4 EV: 246 units
- Wuling Air EV: 229 units
- Hyundai Ioniq 5: 93 units
- Morris Garage ZS EV: 31 units
- BMW i7: 24 units
- KIA EV9: 21 units
- Neta V: 10 units
- DFSK Gelora E: 10 units
Source: Katadata
The positive trend in EV sales in the first quarter of 2024 is attributable to government support for numerous facilities. Initiatives range from policies to increase electric vehicle demand, subsidies, tax incentives, the development of public electric vehicle charging stations (SPKLU), to gradually developing manufacturing by strengthening the supply chain and promoting mass adoption.
This also indicates that Indonesia has the potential to become a manufacturing hub for electric vehicles, particularly with an integrated supply chain in place. One critical component of the supply chain is batteries, which account for 12% of the total weight of an EV and 35% of the total cost.
In conjunction with Indonesia’s growing nickel production sector, which is well-positioned to meet the demand for nickel-based batteries for electric vehicles, spurred by the Indonesian government’s ban on nickel ore exports with a nickel content of less than 1.7% (Ministry of Energy and Mineral Resources Regulation 11/2019), the industry is encouraged to invest in domestic hydrometallurgical nickel refining facilities.
In 2024, the Omega Project, the first electric vehicle battery plant in Indonesia and Southeast Asia, will be inaugurated by the Minister of Investment/Head of the Investment Coordinating Board (BKPM). Notably, PT Hyundai LG Indonesia (HLI) Green Power, a joint venture between Hyundai Motor Company, LG Energy Solution, and PT Indonesia Battery Corporation (IBC), with an investment value of US$ 1.1 billion (approximately Rp 50.39 trillion), has employed over 1,000 Indonesians by mid-2023. HLI Green Power will have a production capacity of 10 gigawatt/hours (GWh), consisting of 32.6 million battery cells capable of producing approximately 150,000 electric vehicles in the first phase. This agreement is part of a joint effort to stimulate investments that will support the development of the electric vehicle ecosystem in Indonesia.
On another occasion, Toto Nugroho, the Director of Indonesia Battery Corporation (IBC), explained that Indonesia currently has at least four other EV battery projects besides the Omega Project:
- Dragon Project
The Dragon Project refers to an end-to-end EV battery development project with Ningbo Contemporary Brunp Legend Co., Ltd. (CBL), a subsidiary of Contemporary Amperex Technology Co., Limited (CATL). The investment value of the Dragon Project, from upstream to downstream, is US$5.6 billion, equivalent to Rp91 trillion (assuming an exchange rate of Rp16,254.05). A conditional share purchase agreement (CSPA) was signed on January 16, 2023.
- Titan Project
The Titan Project is a joint venture with the LG Energy Solution (LGES) consortium. In April 2023, Toto mentioned that the government was seeking written assurance from the consortium.
- BESS Project
The Battery Energy Storage System (BESS) project with PT PLN (Persero) will transition diesel usage to solar panels and batteries.
- Volt Project
Through this project, IBC acts as the majority shareholder of the national electric motor manufacturer, Gesits.
These projects are expected to reduce battery costs through integrated production and provide broader contributions and impacts on the green energy sector and the economy in Indonesia.
