Investor Presentaiton
National Policy
Cost reduction incentives are likely to be more impactful for E2W than E4W
Four-wheelers (all type) OTR price range and their
market share in Indonesia (2022)
EV cost reduction incentive benchmark (2022)
200 300 million IDR
13..70%
< 100 million IDR
42.30%
Sources: Gaikindo, 2022
Country
> 300 million IDR
GDP per capita Mid-class E4W
(USD)
price (USD)
E4W
incentives (%)
1.3%
Singapore
84,500
140k
24%
India
2,690
42k
23%
100 200 million IDR
42.70%
Thailand
8,270
29k
15%
Indonesia
Sources: IESR analysis, 2023
5,010
44K
10%
Indonesia Electric Vehicle Outlook 2023
• Compared to the more developed EV markets, Indonesia's EV policy still lacks cost reduction incentives. More developed EV markets allow 15-25% price reductions for
average EVs, depending on the type and performance of the EV. Indonesia plans to reduce the price of E2W by about 20 - 40% (IDR 7 million) and E4W by about 10% (IDR
80 million) in 2023. However, the 10% incentive for E4W is likely to be ineffective considering that after the 10% reduction, a mid-class E4W still costs more than IDR 500
million and only 0.1% of the market can afford it (Gaikindo, 2021). The purchasing power of EV in Indonesia is lower than that of other major EV markets, as indicated
by the difference in GDP per capita (Gaikindo, 2021). More developed EV markets either have higher GDP per capita or provide significantly higher cost reduction.
• For E2W, the incentive could almost halve the on-the-road price of several E2W models in the market, hence could have a greater impact on adoption. Moreover,
motorcycle is one of the most commonly used transportation modes to drive economic activities. However, there should be clear eligibility criteria for the recipient to
avoid excessive incentive for EVs with low specification. The incentive should only be provided to, for example, models that comply with LCR regulations and have a
larger battery capacity and longer riding range. The implementation of such criteria could incentivize manufacturers to build E2W with higher specifications. Such policy
has been implemented, for example, in the US through the Inflation Reduction Act, which restrict the eligibility for incentives only to brands that meet the LCR criteria.
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