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Measuring the potential for electric vehicles to enter the Indonesian market

Heaptalk Team, news . 19 Nov 2021
Electric Vehicles

Heaptalk, Jakarta — Electrical vehicles, currently become trendy as there are numerous demands raised from the public that urge to see the launch in the near future.

This appears to be a response to a century-old dream that Indonesia will produce electric cars. Like the French proverb, LHistoire se Rpte, history will repeat,  just as it did when the first car was introduced, replacing horsepower with engine power — this would mark a significant revolution for the domestic automotive industry.

The emergence of electric vehicles, which is expected to be widely available in 2022, is not just come with no reason. Consequently, aligned with the essential message conveyed by President Joko Widodo at the Glasgow COP-26 Presidential event, that he had some targets in efforts to control global climate change, with one of them related to the decarbonization from vehicles, thus controlling the emission are necessities. He also targeted reducing the emission rate by 50% in 2030.

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It makes car manufacturers including Hyundai, Toyota, Honda, Wuling, Suzuki, and Lexus so far have been observed competing with each other in the production of electrified vehicles. This can be seen from the Gaikindo Indonesia International Auto Show (GIIAS) 2021 event, which shows enthusiasm for showcasing the electric car prototype.

Similarly, from the market standpoint, electric vehicles are being talked about a lot that people are excited to see, including guessing the features and price, and the most fundamental things – the batteries readability and other parts.

In the context of manufacturers, it has been discovered that Indonesia is prepared to provide the ecosystem, which includes electric car factories, battery industries, supporting facilities, and infrastructure, such as charging stations must be available initially. However, when it comes to the question of whether Indonesia is ready to seize the opportunity to fabricate electric vehicles, it would seem that it has been.

The fact that, as reported by Indonesia’s, Indonesia has partnered with a number of manufacturers in order to meet the demand for electric vehicles. Last September, it was reported that the government had formed a consortium with South Korean companies, namely LG and Hyundai, to begin construction of a USD1.1 billion electric car battery factory in Karawang. The industry will regress with an investment of USD 9.8 billion in the future, to fulfill the needs from upstream to downstream.

This project involved LG and Hyundai to the consortium, which includes the Hyundai Motor Company, KIA Corporation, Hyundai Mobile, and LG Energy Solution, and referred to as PT HKML Battery Indonesia.

“We should be grateful that we can witness today the groundbreaking of Indonesia’s first electric vehicle battery factory, which is also the first in Southeast Asia,” President Jokowi said during his remarks at the groundbreaking event (15/9).


The readiness of EV

Hyundai can be classified as one of the car industries that are now prepared to invigorate the electronic vehicle, as indicated by its readiness in a providing variety of supporting components.  The South Korean integrated automobile manufacturing, for example, has constructed charging station facilities in over 100 sites, albeit these facilities appear to be exclusive because they are now only accessible at official Hyundai dealerships. For example, in Medan and Lampung, as they operate the charging facilities under PT Shinari Putra Kencana. While in Surabaya, it is operated by PT Sun Mega Motor on an area of 1,640 square meters.

Additionally, according to Song Jong Ha, President Director of Hyundai Motor Indonesia (HMID), Hyundai has prepared for the production of electronic vehicles by constructing a factory in Cikarang, West Java, to supply the company’s components, which include the battery, the radiator used to cool the battery, other electrical and mechanical system components, and the driving system. The plant, which occupies a 330,000-square-meter space, is expected to meet market demand for spare parts.

Moving automobiles market leaders such as Toyota and Honda. Seeing from the perspective of the Indonesian segment, it hasn’t progressed as quickly as the electric vehicles from the two world’s largest automakers in the international market. Honda International, for example, has begun to be widely introduced to its prototype outside. While Toyota is preparing a number of prototypes for release in the worldwide market, specifically the United States — notably for the SUV class, which is paired with Hybrid technology, which is a combination of gasoline and electric systems).

Honda, for instance, at the Auto Shanghai 2021 even, displayed ten electric vehicle models, including the third generation of Honda CONNECT and the omnidirectional Honda ADAS2. Additionally, there was the debut of the Breeze PHEV, GAC Honda’s first*1 plug-in hybrid vehicle. They all place a premium on sophisticated safety and driver-assistive technology, allowing visitors to interact with cutting-edge innovations that contribute to the safety and comfort of everyday transportation.

However, it appears that loyal Honda customers will have to be patient as a means for waiting for Honda to enter and begin selling its variants in the Indonesian market, as Honda has not indicated when it would formally launch its electric vehicles. This is due to Honda’s lack of interest in the Indonesian electric vehicle industry today.

The reason is that there is something that bothering in their consideration, in which there will be a regulation provisioned by the government to apply a tax on carbon-containing commodities or vehicle emissions that produce carbon.

Nonetheless, both Honda and Toyota are confident in highlighting hybrid specification cars, including producing their latest engines that are more fuel-efficient and environmentally beneficial, particularly those that meet the Euro 4 standard.

“Electrification is one of the actions that can be taken to lessen the negative impact on the environment, particularly by lowering exhaust fumes from vehicles, such as reducing the consumption of fuel oil to a minimum,” said Yusak Billy, Business Innovation and Sales & Marketing Director of HPM.