The Indonesia International Motor Show in Jakarta is setting the scene for the future of the nation's transportation, putting the spotlight on electric vehicles (EVs). Even though electric cars and motorbikes currently account for a small fraction of Indonesia's vehicles, the show suggests potential growth in this sector.
Despite being the fourth most populous country in the world, Indonesia has been slow to adopt electric vehicles. However, this year's auto show features more than 50 international and domestic brands, showcasing the latest in hybrid and electric technology. This includes the debuts of Chinese automaker BYD's Sealion 7 electric SUV and Vietnamese automaker VinFast's VF 3 mini SUV. China's Honri also marked its presence with the Boma EV.
Alongside Asian giants, key players like Volkswagen and BMW's Mini graced the event, underscoring the growing attention to the EV market. The motorbike segment, another significant aspect of Indonesian transport, is not left behind, featuring models such as Royal Enfields and Vespas, along with locally made bikes by Alva.
| Year | Vehicle Sales |
|---|---|
| 2023 | 1 million units |
| 2024 | 866,000 units |
Amidst the increasing interest in electrification at the motor show, the country's automotive sector is experiencing a downturn. Sales plummeted by nearly 14% in 2024, from 1 million units in 2023 to just 866,000 as per the Indonesian Automotive Manufacturers Association.
Indonesia's Industry Minister, Agus Gumiwang Kartasasmita, emphasized the event's role in reviving the automotive industry. In a declining market condition, all stakeholders, including the government, need to find strategic steps to increase public interest in shopping for motor vehicles, he stated during the opening ceremony.
Yet, electric vehicles still represent a mere 7% of the Indonesian fleet, according to PwC. Challenges such as insufficient infrastructure, high initial costs, and limited performance impede EV adoption, as highlighted by the Institute for Essential Services Reform in a 2023 report.
Recognizing these challenges, companies like VinFast are actively working to address them. VinFast, in collaboration with V-Green, aims to establish 30,000 charging stations across the nation. Without chargers, we cannot sell the car, said VinFast Asia CEO Pham Sanh Chau, emphasizing the importance of building an entire EV ecosystem.
Manufacturing efforts are also underway. Companies like BYD, Hyundai, and Wuling are establishing manufacturing plants, indicating a promising industrial expansion. The government is supportive, eager to turn Indonesia into an international EV hub due to its rich reserves of battery-essential materials.
However, the transition is slow. Indonesia's shift towards renewable energy is gradual, with renewables making up only 14% of the energy mix in 2024, while fossil fuels remain dominant.
This motor show, while a microcosm of future potential, also highlights the significant hurdles that must be overcome for Indonesia to successfully transition towards a sustainable transportation future.
