Indonesia is aggressively pursuing its ambition to become a global leader in the electric vehicle (EV) market. Leveraging its extensive nickel reserves and a strategic downstreaming approach, the country aims to establish a comprehensive domestic supply chain for EVs and batteries.
Despite government initiatives and a rise in sales, Indonesia’s EV aspirations face hurdles. High costs, the lack of sufficient charging infrastructure, and the rapid evolution of battery technology pose potential setbacks.
With an eye on the future, Jakarta has set an ambitious target: to have 2 million electric cars and 12 million electric two-wheelers on Indonesian roads by 2030.
To reach these goals, the government has launched various policies to encourage citizens to adopt EVs and attract foreign investment. These incentives include a value-added tax reduction on EV purchases and the elimination of import duties for foreign automakers that establish manufacturing facilities in Indonesia and meet local content requirements. Several international companies have already committed to building factories, including China’s BYD and GAC Acton, along with France’s Citroen.
EV sales figures demonstrate growing popularity in Indonesia. While only 125 EVs were sold in 2020 during the height of the pandemic, the number surged to 17,000 by 2023. Data from the automotive industry association Gaikindo shows that sales then increased to just over 43,000 units last year.
