The road ahead: Indonesia's Electric Vehicle Readiness and Consumer Insights 2024

• The survey respondents are categorised into three segments: EV owners (7%), EV prospects (78%), and EV sceptics (15%).
• EV owners (93% out of 7% of the survey respondents) are satisfied with their vehicles due to charging duration (68%), lower operating costs (43%), and parking availability (35%).
• When purchasing an EV, EV prospects prioritise cost (73%), followed by environmental concerns (47%), and convenience (44%).
• Key barriers for EV sceptics include worries about limited driving range (75%), lengthy charging times (51%), and uncertainty about EV battery lifespans (46%).
• Only 20% of current EV owners in Indonesia express interest in purchasing a used EV.

Jakarta, 14 November 2024 – In recent years, the Asia Pacific electric vehicle (EV) industry has surged. China tops in usage and production, Japan excels in hybrid sales, and India's market is catching up. In Indonesia, the shift to EVs has shown positive traction.

Today, PwC Indonesia launches Indonesia's EV readiness for 2024 to present the current state of EV adoption, drivers of transformation, challenges, and consumer perspectives across segments. As part of a global study in 27 territories, it allows for comparisons between Indonesia and other markets in Asia Pacific (APAC), Latin America (LATAM), North America (NA), Europe, the Middle East and Africa (EMEA).

EV around the world

Globally, the EV market is experiencing growth, driven by increasing environmental concerns, government incentives, and technological advancements. Major markets, such as China, Europe, and the United States, are leading in EV adoption, with strong policies supporting the transition to electric mobility. By 2030, many countries have set ambitious targets for phasing out Internal Combustion Engines (ICE), further propelling the EV industry.

In terms of consumer interest in EV, the numbers are rising: Over 60% of respondents plan to buy an EV within the next five years, with significant regional variations. High interest is observed in China, India, Indonesia, Latin America, Middle East, and Africa (70-80% EV prospects), while Japan shows a lower interest (21% EV Prospects).
In the Asia Pacific region, China is at the forefront, with substantial investments in EV infrastructure and manufacturing. The region is also home to major battery producers and automotive manufacturers focusing on electric mobility.

Indonesia in the market

With abundant nickel resources crucial for battery-grade materials, Indonesia is poised to become one of the key players in the EV battery market, attracting significant investment and development. Hendra Lie, PwC Indonesia Automotive Leader, added, “By implementing strategic policies and offering attractive incentives, Indonesia is not only enhancing its nickel processing capabilities but also fostering the growth of domestic EV and battery manufacturing. This positions Indonesia as a key contributor to the global shift towards sustainable transportation.”

The study identifies three segments of respondents in the market: EV owners, EV prospects, and EV sceptics. With only 7% of respondents have already owned an EV, the remaining 93% are split between those 78% who intend to buy one within the next five years and those 15% who remain sceptical. Additionally, 60% of EV owner respondents are female, 51% of EV prospects are female, and 55% of EV sceptics are male. This dynamic underscores the untapped potential of the Indonesian market, which, if effectively harnessed, could position the country as one of leaders in the region.

All EV owners (7%) purchased their vehicle through a dealership and an overwhelming 93% of current EV owners are satisfied with their vehicle. The main drivers of satisfaction ranked 68% are pleased with the length of the charging duration, 43% of lower operating costs, and 35% found they are satisfied with the availability of parking spots. Globally, Indonesia (93%) has one of the highest rates of EV satisfaction, compared to among others 98% from China, and 80% from Japan.

When purchasing an EV, prospective consumers (78%) tend to consider most cost, environment, and convenience. Cost is the most important driver at 73%, proving that consumers are still price conscious when making an investment in a relatively newer technology. Environmental concern comes in second place at 47% and followed by convenience at 44%.

The cost as the main driver in Indonesia (73%) is higher than China and India (57%). The Indonesian consumers are found to be more driven by the positive environmental aspect of an EV in comparison to other countries in Asia Pacific.

Hendra added, "However, EV prospects remain concerned about charging times, limited driving range, and battery lifespan. Lengthy charging durations worry 60% of potential EV respondents, particularly during long trips or busy schedules. Additionally, 59% of potential buyers suffer from 'range anxiety,' fearing they may run out of battery before reaching a charging station. Despite improvements in battery technology, 47% of potential buyers are still uncertain about battery longevity and performance over time, impacting their confidence in the long-term investment in EVs."

EV sceptics are the second smallest group (15%) but represent a significant challenge for the Indonesian EV market. Critical barriers for EV sceptics include concerns about limited driving range (75%), long charging times (51%), and uncertainty battery lifetime of EVs (46%). Only 37% reside in suburban areas and commute an average of 23 km per day. Their scepticism is compounded by a lack of confidence in the current infrastructure and technology and the higher upfront costs compared to traditional ICE vehicles.

A significant finding is that Indonesia's used EV market is still in its nascent stage. Unlike more developed regions, where used EVs are popular, only 20% of current owners in Indonesia express interest in purchasing a used EV. The EV owners are concerned about battery degradation (55%) and hidden damages that may appear in the future (53%), and lack of warranty (45%).

In the used EV market, opportunities include increased supply, consumer experiences, after sales guarantee, and advancing technology. However, challenges such as concerns about battery lifespan and replacement costs, limited awareness, insufficient charging stations, and higher depreciation rates compared to traditional vehicles persist. Globally, 80-90% of consumers in Mexico, Brazil, the Middle East, and Africa consider residual value a key factor when purchasing a vehicle. In Asia Pacific, Indonesia has the highest concern about residual value at 73%, followed by Japan at 60%, China at 63%, and India at 64% respectively.