Chinese carmakers dominate Indonesian electric vehicle market

author: FutureCar Staff    

Electric vehicle sales in Indonesia are expected to experience rapid growth in the near future. At the recent 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 the production of EV batteries and cars, while also offering consumer subsidies to boost domestic demand.

Neta Auto, which presented three models at the auto show, initiated pre-orders for its popular Neta V crossover. Great Wall Motor Group showcased the Ora Good Cat, a compact electric hatchback that attracted crowds of curious onlookers. Neta Auto will soon become the second Chinese car manufacturer to establish an EV assembly line in Indonesia, following Wuling's local production of the AirEV in 2022. Hyundai Motor Co. from South Korea also manufactures electric cars near Jakarta.

While Japanese automakers like Toyota, Honda, Daihatsu, Mitsubishi, and Suzuki have dominated the Indonesian car market, they have been slow to introduce electric cars due to infrastructure limitations and lack of incentives. Chinese companies are now looking to fill this gap. However, despite the potential for growth, EVs currently account for only a small fraction of total automobile sales in Indonesia.

The Indonesian government has set ambitious targets for EV adoption, aiming to have 400,000 electric four-wheelers and 1.8 million electric two-wheelers on the roads by 2025. However, there are several obstacles to overcome, including the insufficient number of charging stations, the high cost of purchasing electric cars, inconsistent policies, and potential reliability issues in rural areas with electricity supply.

To stimulate the demand for electric vehicles, the government has introduced a subsidy program that covers the sales of electric motorcycles and cars, as well as the conversion of combustion-engine motorcycles to electric propulsion systems. Producers also benefit from zero percent export duty and value-added tax for electric cars and buses that meet certain domestic content requirements. The government aims to develop domestic EV production facilities to utilize Indonesia's rich reserves of nickel, a crucial component of lithium-ion batteries used in EVs.

Chinese electric car makers face competition not only from Japanese brands but also from South Korean, American, and European players. French carmaker Citroen and Germany's Mercedes-Benz showcased their electric vehicles at the auto show, while the Indonesian government has been actively courting American manufacturer Tesla to invest in car and battery manufacturing in the country. However, Chinese carmakers, such as Wuling, Chery, and DFSK Motor, already have a presence in Indonesia and have achieved significant sales success.

Despite the interest in Chinese electric cars, concerns about their quality and reliability remain. Some potential buyers expressed doubts about the longevity of the batteries, which are the most expensive component of an electric car. While the competition in the Indonesian EV market heats up, Chinese carmakers may have an advantage due to their early investments and established presence.

FutureCar Staff