The Road Ahead: Indonesia's Electric Vehicle Readiness and Consumer Insights 2024

Report
November 2024

Our report on Indonesia's electric vehicle (EV) readiness for 2024, covering key aspects such as the current EV landscape, consumer demographics, and adoption trends. It delves into the role of technology and digital services, the emerging used EV market, and the challenges of charging infrastructure and range anxiety. Additionally, it explores government policies and incentives to harness the opportunities in Indonesia's evolving EV market.

The global EV market is growing due to environmental concerns, government incentives, and technological advancements. Leading markets like China, Europe, and the US have strong policies supporting the shift to electric mobility, with many countries aiming to phase out internal combustion engines by 2030. Over 60% of consumers plan to buy an EV within the next five years, with high interest in regions like China, India, Indonesia, Latin America, the Middle East, and Africa, but lower interest in Japan. In the Asia Pacific, China leads with significant investments in EV infrastructure and manufacturing.

Indonesian EV landscape

Electric vehicles (EVs) have moved beyond a niche market and are now embraced globally. In Indonesia, they are driven by fuel cost savings, environmental impact, and home charging technology. Indonesia, with its high middle class population and urbanisation, is becoming one of key players in the Asia Pacific region’s EV market. According to PwC’s eReadiness Indonesia study 2024, the respondents can be categorised into three segments: EV owners (7%), EV prospects (78%), and EV sceptics (15%). This highlights the significant untapped potential in Indonesia, which, if leveraged effectively, could position the country as a regional leader in electric mobility.

Indonesian EV consumer profile and demographic

Our report classifies Indonesian respondents into three distinct categories with their own unique characteristics, motivations and barriers:

EV owners are trailblazers in Indonesia, making up just 7% of the consumer base. This group of people, who currently own an EV, primarily reside in urban areas (85%), where the infrastructure for charging is more developed. The majority (60%) are women, with an average age of 42. They are mainly motivated by the charging duration (68%) and lower running costs (43%). Impressively, 93% use their electric cars daily, averaging about 31 km per day, indicating that EVs are well integrated into their daily lives.

For 78% of the market, EV prospects are seen as the future of electric mobility in Indonesia. This group is slightly younger than current EV owners, with an average age of 40 and 49% are male respondents. Most prospects (61%) reside in urban areas, and 72% have access to private parking, which is essential for home-charging setups. They typically commute 23 km daily. However, many are cautious and plan to wait up to five years before purchasing an EV. While they are motivated by fuel savings and environmental benefits, concerns about charging times, limited driving range, and battery longevity deter them from immediate commitment.

EV sceptics, making up 15% of the market, pose a significant challenge for Indonesia’s EV sector. This group, mostly male (55%) and slightly older than EV prospects with an average age of 41, has no plans to buy an EV in the next five years. Their main concerns are limited driving range (75%), long charging times (51%), and uncertainty about battery lifespan (46%). Only 37% live in suburban areas, commuting an average of 23 km daily. Their scepticism is further fuelled by a lack of confidence in current infrastructure and technology, as well as the higher upfront costs compared to traditional internal combustion engine vehicles.

The role of technology and digital services

The technological ecosystem around electric vehicles (EVs) plays a crucial role in consumer choices, with many expecting seamless digital integration. EV owners often use car apps for various functions: 90% schedule and monitor service appointments, 55% access the vehicle feature guide, 50% purchase enhanced features, 45% track their vehicle’s location, and 40% lock or unlock their car remotely. Other features include remote start with preheating or precooling, live chat support, battery health monitoring, and remote parking assist. Prospective buyers are drawn to the convenience of integrating personal devices with their cars, seeing car apps as vital tools for managing the vehicle’s lifecycle, scheduling services, and tracking their EV’s location.

Government policies and incentives

The Indonesian government has introduced various policies and incentives to promote the adoption of electric vehicles (EVs), including incentives for vehicle purchases and ownerships, as well as home charging stations. The incentive removes the Luxury Goods Sales Tax (PPnBM) on EV for 2024, waives import tax until 2025 (subject to possible extension) and reduces value-added tax rate from 11% to 1%. Additionally, the government is expanding the EV charging network and working to electrify public transportation. At the regional level, the Jakarta Provincial Government supports EV adoption through policies like an exemption on odd-even plate number traffic restriction and annual car ownership tax exemption, aiming to reduce ownership costs, lower air pollution, and accelerate the transition to sustainable transportation.