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Investor Presentaiton

Recommendation B2B and government adoption as early adopters could provide a viable initial market 2022 B2B adoption status (selected brands) Sector Total fleet size EV fleet size Ride-hailing 5,000,000 9,000 Conventional 17,787 120 transportation Expedition 62,700 10,348 Other Sources: IESR analysis N/A 260 • The B2B adoption will come before the retail adoption (commercial use). Even though there are not any rules yet, ride-hailing and logistics companies have set their own goals to be carbon neutral by 2030 or 2040. Two of the largest ride-hailing service companies have promised to have all of their vehicles electric by 2030 or 2040. According to reports, the two companies operate about 5 million vehicles in the country, which means that they will purchase more than 290,000 electric vehicles (mostly E2W) per year until 2040. • E-bus is also getting incentives. E-buses will help BRT electrification, but it remains to be seen whether the infrastructure and management in sub-national regions, especially outside of Jakarta and Bali, are ready to support BRT electrification. In Surabaya, the ex-G20 E-bus service was stopped after only two weeks due to battery and charging problems. In the same way, Bandung had temporary problems with administration and spare parts. Improving the capacity of local governments to manage E-Bus fleets should be a top priority. • One benefit of the B2B approach is that it provides a viable initial market for EV manufacturers. In fact, more than 19,000 EVs or around 57% of total registered EVs by 2022 are for B2B use. Other benefits of B2B adoption include the fact that fleet managers understand vehicle lifetime costs better than retail buyers, centralized refueling (charging), a high rate of vehicle purchases (bulk buying), heavy use, fixed routes (logistics companies), compliance with government regulations, and a better public image (Khan et al., 2021; Sierzchula, 2014). However, businesses still prefer ICEVS with high power and speed due to their efficiency, which slows down B2B adoption (ADB, 2022). • The government can also be considered as an early adopter, since it buys new cars every year. Due to the Presidential Instruction No. 7/2022 and other sub-national initiatives, the government will buy more electric vehicles in 2023. The retail market can then begin to grow as B2B and government adoption makes the market more mature. Indonesia Electric Vehicle Outlook 2023 39 39
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