Chinese carmakers dominate Indonesian EV market

author: FutureCar Staff    

Electric vehicle (EV) 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 EV production and offering consumer subsidies to boost domestic demand for electric cars.

Neta Auto, which presented three models at the show, initiated pre-orders for its popular Neta V crossover. Great Wall Motor Group showcased the Ora Good Cat, a compact electric hatchback that drew the attention of curious onlookers. Neta Auto is set to establish an EV assembly line in Indonesia next year, following in the footsteps of Wuling and Hyundai Motor Co.

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

Obstacles such as a lack of charging stations, high costs, inconsistent policies, and unreliable electricity supply in rural areas hinder the widespread adoption of electric vehicles. To address these challenges, the Indonesian 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 propulsion systems.

In addition, the government offers incentives for producers, including zero percent export duty and value-added tax for electric cars and buses that meet certain domestic content requirements. Consumers can also receive financial benefits for purchasing onshore electric cars, and the government aims to ensure lower ownership costs.

Indonesia's efforts to develop domestic EV production facilities align with its rich reserves of nickel, a key component of lithium-ion batteries. The government aims to become a leading producer of EV batteries and electric cars by 2027, while also 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 Indonesia auto show, and the Indonesian government has expressed interest in attracting Tesla's investment in car and battery manufacturing.

Chinese carmakers such as Wuling, Chery, and DFSK Motor already have a presence in Indonesia. Wuling sold a significant number of its AirEV small electric cars last year, accounting for the majority of four-wheel EV sales in the country. However, concerns about the quality and reliability of Chinese electric cars remain among some consumers.

Despite these challenges, the Indonesian government's efforts, along with the presence of Chinese carmakers, indicate a promising future for the growth of electric vehicle sales in Indonesia.

FutureCar Staff