EV sees growing demand in Indonesia, with Chinese brands leading market

JAKARTA- It has been three months for Angga Mahardika, 32, to do round-trip driving from his house in Bekasi, West Java province, Indonesia, to his office in capital city Jakarta every day with his new electric vehicle (EV), the China-made Wuling Air EV.

For him, driving with EV not only gives him a quieter and more convenient driving experience on the road, but also enables him to save more money.

"Before having Air EV, I usually spent around 2 million rupiahs ($131.3) per month only for fuel, but now I just need to spend only 800,000 rupiahs ($52.54) for charging," Angga told Xinhua in a recent meet-up.

He said he chose the Chinese EV because it was the cheapest modernly designed EV he could find in Indonesia. The four-seater hatchback has a relatively smaller body compared to other EV cars.

"Air EV is affordable, and I think many middle-class people can afford to buy it. Why should we buy more expensive cars that cost us more and cause more pollution?" Angga said.

The EV penetration in Indonesia is indeed seeing significant growth, with Chinese EVs getting more popular, strictly competing with EVs produced by Japan and South Korea.

According to data from the Association of Indonesia Automotive Industries (GAIKINDO), the sales of EVs in Southeast Asia's largest economy have significantly increased in the past three years. In 2020, only 125 units of EVs from any brand were sold. In 2021, the sales climbed to 687 units and kept increasing in 2022 with 10,327 units. In the first semester of 2023, the country recorded 5,850 units of EVs sold.

The Indonesian government has been aggressively promoting and pushing the sales of EVs to the people for daily use. This is part of the country's efforts to transform into a cleaner energy, particularly following the recent heavy pollution in Jakarta.

To make it more affordable for its people, the Indonesian government has provided subsidies that cover up to 200,000 electric motorcycles and 35,900 electric cars, as well as a 10 percent added value tax (PPN) incentive for purchasing electric cars and buses.

Angga, for example, bought his Air EV for 284 million rupiahs ($18,653). The price had been deducted by a subsidy of 21 million rupiahs ($1,379).

In 2022, GAIKINDO data showed that China's Wuling Motors held 78 percent of EV market share in Indonesia, followed by South Korea's Hyundai Motor with 20 percent and Japan's Toyota with 1.4 percent.

In the annual GAIKINDO Indonesia International Auto Show (GIIAS) held in Tangerang from Aug 10 to Aug 20, a range of Chinese electric car models dominated the floor.

At least seven new variants of the Chinese EVs were introduced during the show, including Neta V by automaker Hozon Auto Manufacturing, Seres E1 by Sokonindo Automobile, and EV Multi-Purpose Vehicle (MPV) Maxus Mifa 9 under Indomobil Group.

Seres E1 became the cheapest EV promoted at GIIAS, costing 189 million rupiahs ($12,413) per unit.

In the 10-day GIIAS, GAIKINDO recorded that China's Wuling Air EV became the bestseller, with 885 units sold under vehicle order letters, accounting for 50 percent of the total 1,771 units EV sales in GIIAS. This was followed by South Korea's Hyundai Ioniq 5 with 776 units.

Seres E1, meanwhile, sold up to 688 units. One of the buyers was Fina Ghaissani Fatwa, a 36-year-old entrepreneur based in Jakarta, who visited GIIAS on Aug 13. She told Xinhua that she came to the auto show to really buy a Chinese EV.

"I need a small, soft-colored EV to take and pick up my kids to school every day, not for long-hour driving. And I really fell in love with Seres E1. It looks very cute and, more importantly, very cheap. I couldn't believe I could get an EV for under 200 million rupiah ($13,136)," Fatwa said.

"Since the beginning, I already thought that it should be a Chinese EV. This is because we all know that most Chinese-made things in Indonesia are relatively cheaper than western products, even cheaper than Japanese ones. And in terms of automotive, I have no doubt about Chinese qualities," she added.

Indonesia's Coordinating Minister for Economic Affairs Airlangga Hartarto recently said that the increasing number of Chinese EV brands entering Indonesia would bring good impacts on the country's market in the automotive sector. This also showed that Chinese automakers had proved their commitment to producing their vehicles here in Indonesia.

"We see that many Chinese EVs are coming in with affordable prices. This is expected to increase the competition in our automotive market," he said.

Riyanto, an automotive observer and researcher at the Institute for Economic and Social Research of the University of Indonesia, said that China had taken the right step to intensively penetrate the EV market in Indonesia, the world's fourth most populous nation.

"Indonesian consumers now have many affordable choices, and our market will be more competitive. Slow but sure, Chinese car manufacturers will gain the trust of Indonesian consumers. In terms of economic scale, Chinese manufacturers are able to compete with Japan here," Riyanto said.