Key drivers and future expectations for electric vehicles in the Indonesia market

Jakarta, 16 October 2023 - The automotive industry has experienced tremendous changes over the past few years, with movement towards sustainable solutions impacting global supply networks and consumer habits. 

PwC Indonesia released its Indonesia Electric Vehicle Consumer Survey 2023 to offer our audiences unique insight into Indonesian consumer’s readiness for electric cars and motorcycles (EVs), shedding a light on the potential future of the industry. This survey is developed from June - September 2023 for Indonesian consumers in eight major cities and across-generations.

Hendra Lie, PwC Indonesia Automotive Leader, said, “The EV market is expected to grow over the next few years due to consumer awareness of eco-friendly vehicles and government incentives, and we will begin to see an expansion of demand. There is a shift to accommodate new sustainable demands and technological advancements. However, the adoption of EVs has been slower in Indonesia than in comparative global markets. Thus, key industry leaders and policymakers are preparing for a future in which these eco-friendly vehicles could play a starring role in the market.” 

The EV market in Indonesia is growing, but it is relatively slower 

However, consumers still linger in doubt, especially regarding the availability of infrastructure. It is stated that respondents are concerned about the availability of the charging stations both for electric cars (63%) and motorcycles (52%). Another respondent's concern is the availability of the charging stations in remote areas for both electric cars (54%) and motorcycles (47%). This shows the need for a robust charging infrastructure to meet consumers’ concerns.

While the allure of EVs is undeniable, consumer concerns can significantly influence the EV adoption rate. This includes maintenance expenses which may become costly in the long run: 87% of respondents were most concerned about battery replacement expenses, 83% were worried about the price of spare parts, 66% were worried about unexpected expenses, and 59% were mindful of regular maintenance costs.

A deeper understanding of these worries is essential for manufacturers, policymakers, and other stakeholders, in order to address demands and needs effectively. Charging is one of the most significant questions when considering an EV for the first time: 75% of respondents would prefer to recharge their vehicles at a charging station nearby, while 69% prefer to recharge their vehicles at home, but with that comes questions about increasing electricity bills.

Accommodating new sustainable demands 

It has been revealed that a shift to accommodate the new sustainability demands in the face of these extraordinary times has occurred, with urgent consideration for climate change. 87% of respondents reflect a positive view with the knowledge that EVs are more environmentally friendly. Most respondents also agreed that these are the vehicles of the future, especially as concerns about climate change are growing and EV technology is becoming more accessible.

Unlike traditional cars that emit greenhouse gases during operation, EVs produce zero tailpipe emissions and can significantly reduce the carbon footprint of transportation, especially in urban areas. Improving air quality is on everyone's minds, especially those in government positions, as cities worldwide grapple with air pollution, much of which is attributed to vehicular emissions. By adopting EVs, cities can improve air quality, benefiting public health, and the environment. While EVs have lower operational emissions, it is essential to consider the entire lifecycle. This includes emissions from manufacturing and, crucially, electricity generation. 

Adaptive technologies

Most respondents viewed EVs as the vehicles of the future. A quieter engine (85%), innovative technology (76%), and never-experienced-before aspects that were exciting (82%), were the top three technical features of EVs that respondents view as features that cannot be replicated in fossil fuel-based vehicles. 

Solid-state batteries are being developed to provide consumers with an extended driving range, faster recharge times, and increased safety, along with innovations in wireless charging to promote flexibility and autonomous driving. These cutting-edge advancements, especially in battery technology and overall efficiency, can lead to reduced maintenance costs and longer vehicle lifespans. 

To close, Hendra Lie, PwC Indonesia Automotive Leader, stated,  “Government incentives are pivotal in shaping the trajectory of EVs adoption. To push the EV market, it takes effort from the stakeholders. Governments and private-sector players should create partnerships to expand charging infrastructures nationwide and initiate fast-charging stations along highways. Simultaneously, manufacturers should focus on improving battery technology to reduce charging times. Innovations like superchargers have already made significant strides in this direction. Comprehensive awareness campaigns highlighting the advancements in EV technology, the long-term cost benefits, and the positive environmental impact can and should shift perceptions. The transition to EV is inevitable, but the pace of this transition hinges on addressing consumer concerns.”