Automotive Sector; Why Does Indonesia Hold Great Potential for the Electric Vehicle Industry?

This came on the back of certain technological developments (discussed below) as well as the growing focus on the exploration and exploitation of renewable energy. Meanwhile, there has been rising political determination around the world to reduce the impact of transportation on climate change and other environmental issues.

At some point in the next couple of decades, most – if not all – governments are likely to ban sales of cars that run on fossil fuel as an energy source. Norway and Sri Lanka are scheduled to impose this ban in 2025, followed by England, Denmark, Germany, Israel and India in 2030, and the USA in 2035. Meanwhile, Indonesia (together with China, South Korea, and Singapore) plans to ban sales of conventional cars by 2040 (see the table on the following page).

Still, a number of obstacles have remained that – presently – continue to make the electric vehicle a less attractive option than its conventional counterpart, especially price-wise. Moreover, considering the electric vehicle is still a relatively ‘new kid in town’, both the regulatory framework and supportive infrastructure (including the electric vehicle charging stations) are in need of further development.

The government of Indonesia is well aware of international developments related to the electric vehicle, and – in fact – aims for Indonesia to become the electric vehicle production hub of Southeast Asia by 2030. And there are indeed a number of crucial factors that make Indonesia great soil for investment in the electric vehicle industry:

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