As of 2022 in Indonesia, there were approximately 28,000 EVs on the road, and in 2023, EV sales more than tripled compared to 2022. By the first half of 2024, nearly 40,000 units were sold, with a focus primarily on hybrid vehicles. As of January 2024, Indonesia had 2,704 public electric vehicle (EV) charging stations and battery exchange stations. This was more than the target of 1,035 units set for the year. A recent survey indicated that 78% of consumers plan to purchase an EV within the next five years, reflecting a robust shift in consumer interest towards sustainable transportation. One estimate suggests that if EVs make up 3% of total cars in Indonesia by 2030, emissions could be reduced by 1.9%.

Indonesia imports most electric vehicles and components due to limited domestic supply, with high import duties, 50% on fully assembled EVs and 10% on locally assembled parts, hindering local manufacturing. However, as the world’s largest producer of nickel ore, Indonesia has significant potential to boost EV battery production and support the industry’s growth.

The Indonesian government has announced a production target of 600,000 EVs by 2030. Multiple ministries in Indonesia are responsible for financing and implementation of electric vehicles (EVs), including the Ministry of Finance, the Ministry of Transportation, and the Coordinating Ministry for Maritime Affairs and Investment. This underscores the government’s commitment to establishing a strong domestic EV manufacturing base. However, low electric vehicle (EV) adoption (EV’s are less than 1% of current vehicle sales) in Indonesia highlights challenges such as high upfront costs and inadequate charging infrastructure, which undermine the effectiveness of existing government policies. These barriers hinder consumer confidence and impede the widespread transition to EVs, despite their potential to revolutionize the transportation sector. Addressing these issues is crucial for accelerating the shift toward sustainable mobility in the country.

Expanding EV adoption offers Indonesia significant economic and environmental benefits. By boosting GDP, supporting decarbonization efforts, and advancing the nation’s net-zero emission target by 2060, EVs present a promising solution for sustainable growth. To support EV adoption, the government has introduced several incentives, including removing the luxury tax on EVs in 2024, waiving import taxes until 2025, and reducing value-added tax on EV sales. Additionally, it is collaborating with private sector players to expand charging infrastructure and develop fast-charging stations along highways, addressing a critical barrier to EV adoption and ensuring a more accessible and efficient charging network nationwide.

In conclusion, Indonesia’s electric vehicle (EV) future holds immense potential, driven by ambitious government targets, strategic incentives, and abundant nickel reserves critical for EV batteries. However, challenges such as high import duties, limited domestic component supply, and underdeveloped infrastructure need to be addressed to unlock this potential. By fostering local manufacturing, expanding charging networks, and leveraging its natural resources, Indonesia can position itself as a key player in the global EV market while advancing its decarbonization and economic growth goals.

Contact details:

Ministry of Transportation, Indonesia.

Contact information

• Phone: +62 21 381 1308 or 3505006
• Address: 8 Medan Merdeka Barat Street, Jakarta Pusat DKI Jakarta 10110, Indonesia
• Website: https://hubla.dephub.go.id/
• Email:  info151@dephub.go.id

This post is submitted by Climate Scorecard Indonesia country manager Netra Naik.