Investor Presentaiton

Executive Summary Indonesia Electric Vehicle Outlook 2023 Executive Summary • EV policy in Indonesia comprises of fiscal and non-fiscal policies. Existing non-fiscal policies mainly stipulate the rules of the game for EVs, such as standardizing battery charging/swapping stations and local content requirements. On the other hand, existing fiscal policies are mainly implemented to incentivize consumers to make EV more attractive. Currently, fiscal policies to incentivize the EV industry (supply) are limited as the government focuses on boosting sales (demand). Following the national government, several sub-national governments began to introduce EV policies since 2019. The notable provinces are Bali and DKI Jakarta. Other regions are catching up by introducing tax discounts for EVs and electrifying their bus rapid transport fleets. • The government is planning to give cost reduction incentives for EVs to reduce their upfront costs. The amount of the incentive depends on the type of the vehicles. However, despite the reduced cost, some vehicles are still too expensive to purchase for most people. For instance, some mid-class EV cars (E4W) are still priced at IDR 500-600 million after cost reduction, which is affordable by less than 0.1% of consumers. On the other hand, cost reduction incentives for motorcycles are more effective since they make E2W prices much cheaper. • Battery charging station (SPKLU) installations are advancing quickly in 2022 with more than 200% growth than the previous year. However, the installation is not well- distributed since 88% of total SPKLUS are installed in Jakarta and Bali. The distribution locations of fast chargers and slow-medium chargers need to be evaluated, since currently at least in Jakarta, most fast chargers are located in state-owned enterprises (SOE). Fast chargers are more suitable to be located on highways rather than office buildings, where users have much less waiting time. SPKLU regulation also needs to be evaluated as it still obliges SPKLUS to install 3-port charger, which is very expensive. Revising this regulation will attract investments in SPKLU installation. • Battery swapping station (SPBKLU) utilization rate can be optimized with battery standardization. This is because currently SPBKLUS are owned by E2W brands, therefore users can only use a specific SPBKLU that matches with their E2W brand. This does not help to alleviate range anxiety that consumers still have. Despite the reports that SPBKLUS in Indonesia are mainly used by commercial users such as ride-hailing and logistics drivers, standardization is still needed because it could alleviate range anxiety issues as this issue is still a dominant barrier in Indonesian EV market. • The ban on nickel ore exports has resulted in the rapid growth of upstream battery-grade nickel refining facilities, with at least 2 HPAL facilities already in operation and 3 more expected to be built in the next few years. However, the MHP produced, with an estimated production rate of 657 kiloton/year, has not yet been absorbed by the midstream industry to continue in the local battery precursor industry. 7

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