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 Passenger EV Sales Pick Up in Indonesia in 2023


Passenger EV Sales Pick Up in Indonesia in 2023

Passenger electric vehicle (EV) sales in Indonesia rose by 65.6% in 2023 to reach a total of 17,119 units, a significant surge from 10,337 units in 2022. The main driver of this growth is the introduction of purchase incentives introduced in March 2023, according to a report from BMI, a Fitch Solutions Company.

BMI has forecast total EV sales in Indonesia to rise by 37.9% in 2024 and 20.5% in 2025 to reach around 23,600 units and 28,500 units respectively. Battery electric vehicles (BEVs) will lead the growth in volume terms as the prevalence of fully electrified model line-ups as consumers are spoilt for choice.

According to the report, Indonesia has unveiled fresh incentives to boost the purchase of EVs, both locally manufactured and imported. The government will reduce the value-added tax (VAT) for EV purchases in its ongoing efforts to increase the adoption of eco-friendlier vehicles and to draw investments into the market’s EV sector.

“We forecast Indonesia to achieve an EV penetration rate (total EV sales as a % of total sales) of just 2.3% in 2024. We expect EV penetration to reach a high of 6.7% in 2033,” BMI said in the report.

In 2023, Hyundai emerged as the leading original equipment manufacturer (OEM) in EV sales, recording a 268.6% increase to topple the leading OEM in 2022 which was Wuling, whose total sales dropped by 13.5% y-o-y in 2023 to achieve a market share of around 40.7%.

In 2023, a significant number of OEMs entered the Indonesian market amid favourable incentives on offer from manufacturing down to consumer incentives.

Image courtesy: Antara

BYD’s New Facility
China’s BYD is set to establish a manufacturing facility in Indonesia with an investment of $1.3 billion and this plant is designed to produce 150,000 units. Additionally, BYD launched three of its latest electric vehicle models – the BYD Seal, BYD Atto 3, and BYD Dolphin – in the Indonesian market at an event held at Taman Mini Indonesia Indah (TMII), located in the South eastern periphery of Jakarta, the capital of Indonesia.

Hyundai is also planning to introduce an EV model that will be produced at its Indonesian factory and will be launched in 2024. The new EV model is expected to include locally manufactured batteries in Indonesia.

Hyundai Mobis, a subsidiary of the Hyundai Group, has commenced the construction of a new factory to manufacture battery systems for EVs in Indonesia. The plant, located in the city of Bekasi, approximately 60 km southeast of the capital city of Jakarta, is expected to be operational by June this year.

Upon completion of the new factory, Hyundai Mobis will be able to supply battery systems for the upcoming electric models to be released in Southeast Asia. The battery cells used in the production of the new factory will be sourced from the HLI Green Power JV, which is in the process of constructing a new battery cell factory in Karawang, also near the capital. This factory is expected to begin production in the H224, with an annual output of 10GWh.

The report further said that Toyota Motor Corporation (TMC), will establish hybrid car factories in Indonesia. However, TMC is not in a hurry to switch to all-EVs there and said that because most power plants in the nation still use coal, the adoption of BEVs may not significantly reduce greenhouse gas emissions.

Mitsubishi Motors expects to invest over $636 million in Indonesia to grow its manufacturing activities. Mitsubishi has plans to build a new facility in one of the industrial parks to the east of Jakarta, the market’s capital, to manufacture hybrid and EVs in Indonesia.

The automaker also intends to more than triple its export manufacturing capacity from the present 42,000 units to 98,000 vehicles by 2024. In 2021, the regional affiliate PT Mitsubishi Motors Krama Yudha Indonesia (MMKI) produced 144,000 automobiles, the report said.

Global Business Magazine

Global Business Magazine

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