Why Indonesian Citizens Are Still Cynical To Buy EVs Amid Government’s Incentive Schemes

Published  August 22, 2023   0
S Staff
Indonesia- Electric Vehicle

Around 1 percent of the electric cars can be seen on the country’s roads and people wants EVs to be 60 percent cheaper

Indonesia, which is considered to be Southeast Asia’s biggest car market has once again hosted the International Auto Show (GIIAS) from August 10 until Aug 20, 2023. The purpose is to boost EV manufacturing, production, and sales. The government was under the notion that the show will provide optimistic scenarios to increase EV sales, but people are still gloom-ridden to adopt the same. 

The price factor of the EVs also worries people about the availability of ample charging stations and infrastructure and skepticism about the new brands appearing in the market. A 54 year old consumer, Dody Hartono, who visited the show told The National that he is expecting a better deal. Hartono said, “We have to make people interested first with EVs, starting with prices that should be 60 per cent cheaper.

Indonesia has massive plans to boost its EV industry and is also involved in fierce competition with India and Thailand to set-up an EV ecosystem as large as China. The National mentioned that around 1 percent of the electric cars can be seen on the country’s roads. In fact, the value added tax on EVs has been slumped to 1 percent from 11 percent by the government. The cheapest EV model in the country is Hyundai Ioniq 5 that is priced below $45,000.

According to Hartono, the price of electric cars should be between $10,000 and $13,000. But, there are two models that carry this price tag, Wuling's Air EV Lite and Seres Group's E1 is priced at $12,300. For instance, in China, the largest selling passenger electric car is still BYD Seagull, which is priced at just $10,000. 

Hendra Pratama, another citizen who appeared in the Auto Show told The National that the price of EVs needs to be reduced more and then only the lower-middle class will be optimistic to adopt the same. Currently, it is not possible for everyone to purchase.

Media reports also added that Indonesia has set a target of manufacturing 600,000 EVs by the end of 2030s, which according to the experts is more than 100 times the volume sold in the nation in the first quarter of the year. On the other hand, the chief economic minister of the country told the media that he is expecting that GIIAS will help sell more than 26,000 EVs this year. 

Speaking of Indonesia’s plans of increasing the EV growth, a previous report of CircuitDigest added that Hyundai and LG on the other hand, have begun assembling electric vehicles and batteries in Indonesia. The French mining firm Framet and Germany’s BASF have stated to invest $2.6 billion to process Nickel that is utilized in EV batteries. The country’s EV growth plans face a lot of impediments such as lack of charging facilities, skyrocketing price of electric cars, and export restrictions of nickel that were unleashed by the government to incentivize FDI in nickel processing.