Chinese carmakers dominate Indonesian EV 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 offering consumer subsidies to boost domestic demand.

Neta Auto expressed excitement about entering the Indonesian market, recognizing its huge potential for electric vehicles. The company presented three models at the auto show and initiated pre-orders for the popular Neta V crossover. Great Wall Motor Group showcased the Ora Good Cat, a compact electric hatchback that drew crowds of curious onlookers.

Chinese car manufacturers are making significant strides in Indonesia's EV market. Neta Auto will establish an EV assembly line next year, following in the footsteps of Wuling and Hyundai Motor Co. Japanese automakers, such as Toyota, Honda, Daihatsu, Mitsubishi, and Suzuki, have dominated the Indonesian car market but have been slow to introduce electric cars due to infrastructure limitations and a lack of incentives. Chinese companies are now looking to fill this gap.

Although the potential for growth is immense, EVs currently account for a small fraction of total automobile sales in Indonesia. The government aims to have 400,000 electric four-wheelers and 1.8 million electric two-wheelers on the roads by 2025. However, several obstacles need to be overcome, including a lack of charging stations, high costs, inconsistent policies, and potential electricity supply issues in rural areas.

To stimulate the demand for electric vehicles, the government has launched a subsidy program that covers the sales of electric motorcycles and cars, as well as the conversion of combustion-engine motorcycles to electric systems. Producers can benefit from zero percent export duty and value-added tax incentives, while consumers can receive financial support for purchasing onshore electric cars.

The subsidy program complements Indonesia's efforts to develop domestic EV production facilities and utilize its rich reserves of nickel, a crucial component in lithium-ion batteries. The government aims for Indonesia to become one of the top three countries in the world producing EV batteries and electric cars by 2027. Promoting electric vehicles also aligns with Indonesia'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. French carmaker Citroen and Germany's Mercedes-Benz showcased their electric vehicles at the Indonesia auto show. Additionally, the Indonesian government has been actively seeking investments from American manufacturer Tesla in car and battery manufacturing.

Chinese carmakers, such as Wuling, Chery, and DFSK Motor, have already made significant progress in the Indonesian market. Wuling sold a substantial 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 still exist among some potential buyers.

Despite these challenges, the future looks promising for the growth of electric vehicle sales in Indonesia. With government support, increasing investments, and growing consumer interest, the country is poised to become a significant player in the EV market.

FutureCar Staff