Market Intelligence
Electric Vehicles Indonesia

Indonesia Electric Vehicles

Indonesia is made up of over 17,000 islands, making it the largest archipelago country in the world. Its length is 3,200 miles, equivalent to the U.S. from the east to the west coast.  It is resource-rich and has relied on petroleum, agribusiness, and mineral wealth to drive its economy since its independence in 1945. However, most of the economic drive is centered on Java, one of Indonesia’s major islands, with Java contributing around 60% to the overall economy. Furthermore, located on Java Island, Jakarta metropolitan area, Indonesia’s capital city, consists of close to 30 million people, making it the 2nd largest city in the world.

Despite its petroleum-rich resources, Indonesia has been significantly relying on imported fuels for transportation and households, which has been costly to Indonesia’s annual budget spending. Energy imports consist of about two-thirds of Indonesia’s annual import spending. In addition, these conditions limit Indonesia’s dependence on its own domestic petroleum resources as the country’s petroleum lifting has been declining due to aging wells, resulting in decreased foreign investment and long-term contract commitment to petroleum exports. Understanding this long-standing energy issue and acknowledging the abundant renewable energy resources, the Indonesian government has declared recently that the country is in the energy transition phase as moving from fossil fuel to clean/ new and renewable energy. In line with the energy transition, one of the initiatives undertaken by the government is to progressively move from fossil fuel vehicles to electric vehicles (EV), thus also showing its commitment to the world’s climate change effort to achieve a net zero target by 2060.

The president and government ministries issue several government regulations for the electric vehicle industry in Indonesia. The first one, issued in 2019, is the Presidential Decree No. 55 of 2019, which acts as the umbrella support for the electric vehicle development.  Some of the regulations to support the growth of EVs are a tax reduction on new EVs and restricted use of vehicles not meeting emission test standards. Hence, this is intended to accelerate the growth of green technology vehicles, especially EVs. Government ministries/ agencies, state-owned companies, regional governments, and some private sector players are shifting to EVs by using more EVs for their operations. By 2025, those institutions will use electric cars, motorcycles, and electric buses for 19,220 units, 757,139 units, and 10,227 units, respectively. In 2022, Indonesia’s new EVs hit 700% sales growth compared to the previous year.

The government-focused support for the EV industry is on battery-based electric vehicles. Indonesia’s government has appointed Perusahaan Listrik Negara (PLN), the state-owned power company, to establish the EV charging infrastructure, estimated at 1 USD billion spending by 2030. By 2025, Indonesia plans to have 6,318 EV charging stations and 10,000 battery swap stations. PLN will also be one of the state-owned mining and energy company owners, besides MIND ID, Pertamina, and Aneka Tambang (ANTAM), of the newly established Indonesia Battery Corporation (IBC). This state-owned holding company will focus on EV battery development as well as nickel mining, smelter, cathode and precursor, energy storage, and recycling facility development. IBC is also partnering with foreign partners from Korea and China, LG and CATL, respectively.

As Indonesia has begun the process of moving its capital from Jakarta to Nusantara in the East Kalimantan province, the government indicated that it would prohibit conventional vehicles. Instead, it will only allow vehicles to utilize environmentally friendly and intelligent technology. Furthermore, Indonesia aims to build an intelligent, integrated, sustainable transport system with the new capital.  Additionally, the government is currently undertaking a study on using self-autonomous vehicles in certain public areas in the new capital.

This is an early stage of the plan by Indonesia for the future of its vehicle industry, understanding potential challenges that may surface from today’s existing limited infrastructures, EV costs, conventional vehicle automakers, and regulators. But the current conditions and the future demand show the prospect, at least in the long run, for the EV industry in Indonesia.  The openness of Indonesia’s government to this sector’s growth and expansion offers numerous future opportunities to U.S. companies operating within the industry.

For more information, please kindly contact: Commercial Specialist Mr. Mario Simanjuntak (