Chinese carmakers dominate Indonesian electric vehicle market

author: FutureCar Staff    

Electric vehicle (EV) sales in Indonesia are expected to experience rapid growth, despite currently being a niche product. At the Gaikindo Indonesia International Auto Show, Chinese carmakers Neta Auto and Great Wall Motor showcased their sleek electric car models, aiming to tap into the increasing demand for eco-friendly vehicles in the country. The Indonesian government is actively promoting EV production and consumption, offering subsidies and incentives to drive domestic demand.

Neta Auto, which presented three models at the auto show, plans to establish an EV assembly line in Indonesia next year. Wuling and Hyundai Motor Co. are already manufacturing electric cars in the country. However, traditional Japanese automakers like Toyota, Honda, Daihatsu, Mitsubishi, and Suzuki still dominate the Indonesian car market and have been slow to introduce electric cars due to infrastructure limitations and lack of incentives.

While the potential for EV growth in Indonesia is significant, currently, EVs account for only a fraction of total automobile sales. To address this, the government has unveiled a subsidy program that covers the sales of electric motorcycles and cars, as well as the conversion of combustion-engine motorcycles to electric systems. However, challenges such as insufficient charging stations, high costs, inconsistent policies, and electricity supply reliability in rural areas need to be overcome.

The government's subsidy program complements its efforts to develop domestic EV production facilities, leveraging the country's abundant nickel reserves for lithium-ion batteries. Indonesia aims to become one of the top three countries in the world producing EV batteries and electric cars by 2027. Additionally, promoting electric vehicles aligns with the government's goal of reducing greenhouse gas emissions by 29% by 2030.

Chinese electric car manufacturers face competition not only from Japanese brands but also from South Korean, American, and European players. Citroen and Mercedes-Benz showcased their electric vehicles at the auto show, while the Indonesian government has been actively courting Tesla for investment in car and battery manufacturing. However, Chinese carmakers like Wuling, Chery, and DFSK Motor already have a presence in Indonesia, with Wuling's AirEV accounting for 80% of the country's four-wheel EV sales in 2022.

Despite the interest in Chinese electric cars, some individuals expressed concerns about their quality and reliability. Arsita Kamila, for example, found the Ora Good Cat practical for city driving but questioned its longevity, particularly regarding the battery.

FutureCar Staff