1、UNLE ASHING INDONESIA S ELEC TRIC MOBILIT Y P OTENTIALA comprehensive report on the future of EVs in Indonesia2023We would like to acknowledge all those who contributed in the review of this Report,especially:Dr.Andreas Schlosser and Dr.Philipp Seidel.HIROTAKA UCHIDAHead of ADL ThailandPartner,Head,

2、Automotive&ManufacturingSoutheast Asia&PAKSHAY PRASADSenior Manager,Automotive&ManufacturingSoutheast ATHAO DOBusiness AnalystSoutheast ADAO LEBusiness AnalystSoutheast A VUTTIMET CHATISARAWICHCase Team AssistantSoutheast ADUC(BRYAN)TRANCase Team AssistantSoutheast ACONTENTFOREWORD 3EXECUTIVE SUMMAR

3、Y 61.CURRENT SITUATION OF EVs IN INDONESIA 182.REGULATORY PUSH&MARKET MOVEMENTS SPARK OPTIMISM 263.KEY CHALLENGES IN ENABLING INDONESIA AS EV HUB 324.INDONESIA ELECTRIC MOBILITY READINESS INDEX 425.INDONESIAS EV EVOLUTION&REALIZING THE EV DREAM 50CONCLUSION 552At the 26th UN Climate Change Conferenc

4、e of the Parties(COP26)in October/November 2021,several nations and leading car manufacturers pledged to phase out fossil fuelpowered vehicles by or before 2040.As countries around the globe prepare for carbon neutrality,the automotive industry is undergoing a fundamental transformation.Consequently

5、,governments in Southeast Asia(SEA)have floated ambitious plans to capture a share of the evolving electric vehicle(EV)segment,creating various opportunities for the region in both the domestic and export markets.Indonesia has traditionally been a strong automotive market in the region,selling 1 mil

6、lion units,the largest in the Association of Southeast Asian Nations(ASEAN)and producing 1.5 million units(the second highest after Thailand)in 2022.The country has now embarked on an ambitious electrification plan with a target of 600K four-wheel(4W)battery electric vehicles(BEVs)and 2.45 million e

7、lectric two-wheelers(e2Ws)by 2030.Indonesia plans to take the lead in facilitating the Regional Electric Vehicle Ecosystem Development,committing to building an EV ecosystem and becoming an important part of the upstream supply chain within ASEAN.The shift toward electric mobility by Indonesia,howev

8、er,will have its challenges.ASEAN countries need to come together with Indonesia in a cooperative approach,with each country playing a specific role in the overall EV ecosystem.FORE WORDARTHUR D.LITTLE3Arthur D.Little(ADL)has analyzed the current market situation in Indonesia and proposes recommenda

9、tions to executives at automotive OEMs,battery manufacturers,and industry newcomers to support them as they transform their industries.Our overview of Indonesias readiness and challenges for electric mobility provides an understanding of the current situation,while our analysis of critical factors t

10、o promote EV adoption offers a broad structure of actions needed to transform Indonesia into an EV manufacturing hub.In this Report,we summarize the current status of EVs in Indonesia,which includes an overview of environmental concerns and the reasons behind low EV adoption rates.We then examine re

11、gulatory issues and market movements and identify the main challenges Indonesia faces by comparing its EV readiness index with other countries.The ADL EV assessment,explained in detail later in this Report,grew from a market-based survey and input from industry experts.We conclude by recommending so

12、lutions to achieve the desired EV evolution and meet the established targets.Hirotaka Uchida Head of ADL Thailand Partner,Head of Automotive&Manufacturing Southeast Asia&Pacific4REPORT:UNLEASHING INDONESIAS ELECTRIC MOBILIT Y POTENTIAL5ARTHUR D.LITTLEE XECUTIVE SUMMARYThe automotive industry is one

13、of Indonesias most significant contributors of greenhouse gas(GHG)emissions;at 27%,it is ranked as the second-largest emitter.Given the governments net-zero target of 2060,decarbonization of the transport sector is crucial and requires electrification.Moreover,electrification presents the country wi

14、th an enormous opportunity to reduce oil imports and develop its lithium-ion battery(LIB)supply chain through developing its abundant nickel reserves.Electrification also contributes to a reduction in air pollution,which directly impacts quality of life.Since 2013,the Indonesian government has been

15、introducing incentives to support xEVs(BEVs,plug-in hybrid EVs PHEVs,and hybrid EV HEVs)through the Low Carbon Emission Vehicle(LCEV)program and Presidential Regulation No.55/2019,which aims to develop an end-to-end EV supply chain.The government,as per Ministry of Industry Regulation No.6/2022,has

16、also set a national target of 600K battery electric four-wheelers(e4Ws)and 2.45 million e2Ws by 2030.Indonesia provides several incentives to EV manufacturers,such as import duty exemptions for machinery and raw materials and corporate income tax reductions of up to 100%for five to 20 years,applicab

17、le on investment values between US$7.2 million and US$2.1 billion.EV manufacturers are also offered gross income tax deductions of up to 300%of costs incurred from R&D,technology innovation activities,and training to enhance capacity building in the EV industry.On the demand side,the government has

18、introduced a subsidy of US$5,130 for e4Ws manufactured using 40%local materials,US$469 for locally produced e2Ws with 40%local materials,and exemptions from luxury sales tax on imported EVs.On the charging infrastructure,it offers customers a ceiling rate of US$0.16/kWh of service costs for fast and

19、 ultra-fast chargers and a subsidized rate 6REPORT:UNLEASHING INDONESIAS ELECTRIC MOBILIT Y POTENTIALARTHUR D.LITTLEfor EV charging(US$0.05/kWh).There is no incentive for charging infrastructure operators at this time.However,EV adoption rate remains low despite these and other incentives offered by

20、 the government.LOW ADOPTION FACTORS-Vehicle affordability.The cost of an entry-level EV model starts at US$18,125(Wuling Air EV),while a similar model of an internal combustion engine(ICE)vehicle starts at only US$9,825(Daihatsu Ayla).Initial acquisition cost is important,given that individuals mak

21、e purchasing decisions on up-front cost rather than entire lifecycle cost.An ADL analysis discovered that a driver must travel 84 km per day minimum to break even on the cost differences between an EV and an ICE,which is higher than the average daily driving distance in Indonesia of 34 km per day.As

22、 a result,current price differentials between ICE vehicles and EV vehicles limit B2C adoption.-Coverage of EV demand subsidy is limited.Currently,the ratio of ICE to EV in Indonesia is 16:1,while market leader Chinas ratio is 2.2:1,demonstrating a narrow difference between ICE and EV in terms of mod

23、el availability.Only two models available in Indonesia,Wuling Air EV and Hyundai IONIQ 5,qualify for a government subsidy of US$5,130 because they are the only models to satisfy the 40%local material regulation.-Limited charging infrastructure.According to an ADL survey,over 65%of respondents cite a

24、 lack of sufficient charging infrastructure as one of the critical barriers to EV adoption.Currently,there is no incentive offered to charging infrastructure operators.Indonesias lack of progress on building charging infrastructure also delays EV adoption.7MARKET MOVEMENTSUpstream:Commercializing lo

25、cal cell components/cell&pack production-Partnerships and joint ventures(JVs)have been created to process raw materials,such as nickel.In Indonesia,various companies have entered into partnerships and JVs to build new cell components and increase manufacturing capabilities.For example,PT Vale Indone

26、sia partnered with Chinas Zhejiang Huayou Cobalt and the USs Ford Motor Company to work on nickel-processing projects.Indonesias Harita Group and Chinas Ningbo Lygend Mining established a JV to build a high-pressure acid leaching(HPAL)plant,an eight-year supply agreement for nickel and cobalt from C

27、hinas GEM Co.-Cell components,such as cathodes,are being developed by nontraditional players.Chinese companies are intensifying efforts to secure a significant position in Indonesias upstream activities,especially for cathodes.In February 2023,Chinese chemical company Jiangsu Lopal Tech tapped into

28、cell components by investing US$290 million to construct an EV battery cathode material production project in Central Java province,Indonesia.-Indonesia Battery Corporation(IBC)is leading efforts to become a global LIB cell supplier with technological support from CATL and LG and a cumulative invest

29、ment of approximately US$16.8 billion.In addition,IBC has already signed a memorandum of understanding(MoU)with Malaysias Citaglobal Bhd to produce EV battery cells and battery energy storage systems(BESS).EV OEMs are mostly doing pack assembly in-house.Indonesia mainly relies on overseas companies

30、for BMS.VKTR is a prominent BMS vendor and the countrys only local option.8REPORT:UNLEASHING INDONESIAS ELECTRIC MOBILIT Y POTENTIALARTHUR D.LITTLEMidstream:Vehicle sales covering e2W,e3W&e4W-Japanese OEMs,such as Toyota,Daihatsu,and Honda,have yet to indicate concrete EV plans.However,other Japanes

31、e OEMs,such as Nissan and Mitsubishi,have a product on the market or have plans for one.In contrast,Korean OEMs,such as Hyundai,have set up production plants in Cikarang,Indonesia,to produce EVs.The US-based OEMs,like Tesla,are in discussions with Indonesian policy makers to build an EV production p

32、lant.European OEMs,including BMW and Daimler,also plan to launch EVs in 2023 in the passenger vehicle and commercial vehicle categories.In addition,Chinese OEMs Wuling Motors,Chery Automobile,SAIC-MG,and BYD Auto have commenced their EV push in Indonesia by launching EV models in 2022.Indonesias fir

33、st national brand,PT Solo Manufaktur Kreasi,trading as Esemka,is making efforts to invite overseas partners to build EV platforms.-As of December 2022,only 21K motorbikes in Indonesia were electric,with top players such as Gesits Motors,Viar Motor Indonesia,and SELIS accounting for approximately 65%

34、-70%of the market share.Seven years ago,these leading players entered the e2W space with assorted models,styles,and ranges to serve customer needs and preferences.Other local startups followed with similar strategies,including Volta Indonesia,Ilectra Motor Group,and Charged Indonesia,and launched th

35、eir EV models in 2017,2021,and 2022,respectively.In addition,Japanese OEMs,such as Honda,have announced plans to launch seven electric motorbikes toward the end of the decade.Honda is also collaborating with Panasonic to conduct a feasibility study on battery swapping.9Downstream:Charging infrastruc

36、ture needs more traction-As the primary energy provider of EV charging in Indonesia,PLN is leading the way to supplying electricity to public and private charging stations.By 2023,PLN plans to install 24,720 public e4W charging stations(from the current 600)and 12K e2W charging stations(from the cur

37、rent 6,700).The company aims to partner with the private sector to install more charging stations.-Swapping and charging infrastructure operators are coexisting.A few local major companies,such as Astra Group,PT Starvo Global Energi,and Swap Energi,are at the forefront of charging infrastructure and

38、 battery swapping in Indonesia.Moreover,some oil and gas companies like Shell,Pertamina,and MedcoEnergi have also entered the swapping business,but with limited traction.Equipment providers ABB and Schneider Electric are in the market for charging infrastructure;however,they have a limited presence

39、and are opting for a“wait and see”strategy.Despite these initiatives,an ADL assessment predicts that the Indonesian governments ambitious target will likely not be met,as projections indicate sales of only 81K e4Ws by 2030.A significant achievement is expected for e2Ws,with an estimated sale of 2 mi

40、llion BEVs within the same time frame.These numbers reveal a shortfall of 519K e4Ws and 450K e2Ws.1 0REPORT:UNLEASHING INDONESIAS ELECTRIC MOBILIT Y POTENTIAL5 KEY CHALLENGESADL has identified five key challenges Indonesia needs to address to achieve its mission of becoming an EV vehicle and battery

41、 manufacturing hub.The four challenges are:(1)cautiousness of Japanese OEMs,(2)insufficient ambitions to expand charging infrastructure,(3)underdeveloped nickel processing,(4)LFP batteries threatening NMCs existence,and(5)balancing regional dependence and national priorities.1.Cautiousness of Japane

42、se OEMsJapanese OEMs account for a large share of Indonesias automotive industry and pose a significant challenge for the country as it aims to become an EV hub.Thus,the role of Japanese OEMs is paramount in developing Indonesia as an EV hub.Given Japanese OEMs low focus toward EV in general,Indones

43、ia must focus on encouraging OEMs from other countries to lead the electrification revolution.Chinese OEMs and Indian OEMs are closely tracking the SEA market given the recent electrification push by the government.2.Insufficient ambitions to expand charging infrastructureCharging infrastructure can

44、 take the form of a home charging station,destination charging,or battery swapping.The Indonesian government is emphasizing battery swapping,given its focus on e2W;however,overall charging infrastructure is still limited.While the government has given PLN a mandate to expand the charging infrastruct

45、ure,the pace of progress remains slow.The current absence of supply-side incentives for charging infrastructure limits prospective providers from entering the charging infrastructure market.This problem is something the government of Indonesia should address as it attempts to expand battery swapping

46、 via initiatives such as battery standardization.ARTHUR D.LITTLE1 13.Underdeveloped nickel processingThanks to its abundant nickel reserves,Indonesia has strong potential to produce nickel manganese cobalt(NMC)batteries to support EVs.However,it lacks the capacity for class 1 nickel production for t

47、he battery,which may hinder the countrys goals.Nickel,which can comprise about 10%of total battery cost,is a significant component in battery production.Indonesia holds the largest reserves of nickel in the world,giving the country a strategic opportunity for financial and economic growth.The level

48、of importance is further increased as higher levels of nickel are processed within NMC-based cells.Nickel producers in Indonesia have mainly focused on class 2 mining and smelting but need more presence in class 1 production because class 1 nickel is needed for battery cell production.Most nickel de

49、mand is driven by the steel sector,rather than the battery sector.In addition,constructing a technology smelter for class 1 production is capital-intensive and complex.Hence,it is challenging for conventional nickel producers to upgrade their capabilities to class 1 production.4.LFP batteries threat

50、ening NMCs existenceIndonesia can leverage its vast nickel resources to produce NMC batteries,which have the advantages of high energy density and good charging performance at low temperatures.However,NMC batteries may be under threat because the characteristics of lithium ferrophosphate(LFP)batteri

51、es show greater potential,thanks to their longer lifespan,better tolerance and safety at higher temperatures,and longer lifecycle.LFP batteries have additional advantages:-LFP can store more power than NMC over time due to slower degradation.-Stable lithium chemistry makes LFP safer than NMC.1 2REPO

52、RT:UNLEASHING INDONESIAS ELECTRIC MOBILIT Y POTENTIAL-LFP batteries degrade less at higher temperatures than NMC,making them more suitable for low-cost EVs operating in hot temperatures.-A longer lifecycle gives LFP higher durability than NMC.-Compared to NMC,LFP has fewer supply chain risks.LFPs ma

53、jor components are iron and phosphate,which have abundant sources,and,unlike NMCs,do not rely on nickel and cobalt,which are concentrated in only a few regions.5.Balancing regional dependence&national prioritiesIndonesia sources nickel locally but still depends on nearby countries for other minerals

54、.The countrys overemphasis on local content regulation may trigger similar unilateral or bilateral responses from other countries,which would have negative implications for the supply chain.Indonesia depends on nearby countries,including Australia,India,and the Philippines,for other minerals.As some

55、 countries consider prioritizing local sourcing and local industries in developing their EV ecosystem,advocating for a national agenda can magnify supply chain risks for LIB cell minerals in Indonesia.According to ADL,Australia is expected to have a strong demand for xEV,including EVs.Australia may

56、also aim to build its own LIB cell manufacturing plant,given Chinas stronghold over LIB supply chain material and Australias plan to de-risk from China.If Australias LIB cell manufacturing industry accelerates,the government may impose trade restrictions on nearby countries,including Indonesia.Given

57、 the above challenges,ADL has developed a series of recommendations to manage them.ARTHUR D.LITTLE1 3INDONESIAS READINESS FOR ELECTRIC MOBILITYGlobally,Indonesia is ranked among Emerging EV Markets,as per the ADL Global Electromobility Readiness Index(GEMRIX).1 Indonesias position places it alongsid

58、e the US,Japan,Thailand,and the United Arab Emirates.ADL sees enormous potential for future growth in Indonesia due to government support,upstream supply condition,and a strong demand base.The countrys current overall rank is 10 on our BEV readiness index.Charging infrastructure is a key issue that

59、Indonesia should address and may determine its future performance.Although Indonesias EV industry is in its early stages,the EV market movement is attractive to the overall industry player and ecosystem.Recommendations for the ecosystemTo support the EV transition,Indonesia needs to diversify by exp

60、loring Chinese and Indian OEMs and startups,which are more active in the regions EV market.This will help ease Japans current dominance of Indonesias EV market.Chinese OEMs Wuling Motors,BYD Co.,Great Wall Motor(GWM),SAIC-MG,Geely Auto,and others are already expanding into Thailand,Malaysia,and Viet

61、nam.Indonesia should examine the potential of specialized incentives and investment promotion schemes to attract some of these OEMs.India-based OEMs Tata Motors and Mahindra&Mahindra(M&M),as well as Indias flagship ride hailing and e2W company Ola Cabs,plan to enter the Southeast Asia market in the

62、near future.1 For the complete ADL GEMRIX 2022 Report,see https:/ 4REPORT:UNLEASHING INDONESIAS ELECTRIC MOBILIT Y POTENTIALIn addition,the Indonesian government should consider a strategic approach to charging infrastructure deployment.First,it should provide incentives not only to consumers and us

63、ers of charging infrastructure,but also to charging infrastructure providers and operators.Second,the government should leverage the network of Indonesia-based ride-hailing firms like Gojek,Blue Bird,and Grab to collect micro-level data about passenger movement to help charging operators plan their

64、deployments and expansion.This micro-level data may also help convince financiers and credit issuers that a viable business case for charging infrastructure exists.On the supply side,Indonesia should make the investments needed to upgrade its nickel infrastructure while proactively seeking overseas

65、partners that can help improve and increase production of high-grade nickel.Based on ADL estimates,environmental,social,and governance(ESG)related concerns may arise.Producing 1 kg of nickel in Indonesia generates 20-25 kg of CO2 equivalent.As Indonesia aims to expand its cathode supply overseas,it

66、must consider this and similar factors and their environmental impacts.Competing in this market requires that environmentally friendly practices in nickel mining be introduced.Indonesia must also focus on expanding its cell chemistry capability beyond NMC and LFP.Recently,LFP batteries have gained h

67、igher market share because they do not rely on nickel and cobalt for production,which are more expensive raw materials.LFP batteries are also more suited for energy storage system applications,a segment that may see strong battery demand.ARTHUR D.LITTLE1 5As Indonesia develops new capabilities,it mu

68、st also balance its national priorities of promoting local industry with its regional dependence.Indonesia should make the most of its favorable relations with Australia,the Philippines,and India and must look to consolidate its position through a more collaborative role with a focus on developing a

69、n LIB industry in this region through cooperation and support.Initiatives such as local content regulation and banning nickel exports may be counterproductive and may encourage other nations to impose unilateral or bilateral trade restrictions.These actions should be discouraged,as Indonesia can ben

70、efit from the support of these countries when developing their LIB industry and for other enablers for the EV ecosystem.For example,Skill India,an Indian government project,has embarked on a re-skilling initiative in an after-sales service program to minimize disruption from EVs and diminish the thr

71、eat of job loss.Such programs can be leveraged by Indonesia to make the workforce more future-ready.Other areas of support include inviting overseas EV component producers to set up local facilities in Indonesia and considering more targeted duty exemptions for selected EV components(e.g.,motor,powe

72、r electronics controller,battery management systems BMSs).1 6REPORT:UNLEASHING INDONESIAS ELECTRIC MOBILIT Y POTENTIALARTHUR D.LITTLE1 7THE SIGNIFICANCE OF THE AUTOMOTIVE INDUSTRYThe sectors dominant economic role The automotive industry is among the key sectors in Indonesia,contributing 19%to manuf

73、acturing and 4%to GDP.On the supply side,the country is the second-largest vehicle producer in the SEA region,turning out 1.5 million 4W units in 2022.On the demand side,Indonesia has the worlds largest demand for 2W,with 5.4 million units sold,and ranks as the third-largest producer globally for 4W

74、 with 1 million units sold in 2022.According to the Indonesian Chamber of Commerce and Industry,the automotive sector is one of the countrys major employers,with 1.5 million people engaged in direct labor and 4.5 million employed in indirect labor,thanks to the huge demand-side and supply-side poten

75、tial.The industrys growth has fueled the development of training centers and programs to provide workers with the necessary skills and knowledge to work in the automotive field.As a result,the skilled workforce becomes an alluring factor to attract foreign investment.In fact,the industry has seen a

76、CAGR of 19%in foreign direct investment for the 20192022 period,with the US investing$1.5 billion in the country during 2022.A source of forex reserves Foreign exchange(“forex”)reserve management is a key priority for the Indonesian government,given the countrys dependence on oil imports and fluctua

77、tion of the Indonesia currency with the US dollar,implying the importance of maintaining the automotive sectors continued presence as a key export industry.The automotive industry is one of the largest contributors to the countrys exports.In 2019,automotive exports accounted for around 7%of Indonesi

78、as total non-oil and gas exports,making it the second-largest non-oil and gas sector after electric machinery and electronics equipment.Given the importance of forex and debt management,the country has entered various free-trade agreements with its major regional and global trade partners,including

79、Australia,South Korea,and Southeast Asia countries,to further make it an attractive base for export-oriented production.Influence of CASE trendsCASE(connected,autonomous,shared,and electrification)trends in the region are impacting the global automotive industry with electrification and shared mobil

80、ity as the dominant trends.The importance of the electrification trend is more pronounced,given the concerted efforts across the globe toward decarbonization and sustainability.All major economies global and regional have announced aggressive electrification policies,including some of the major auto

81、motive hubs in the Asia-Pacific region(APAC).India has a target of 30%EV penetration among private automobiles,70%among commercial vehicles,and 80%among 2Ws and 3Ws,while Thailand announced its zero-emission 3030 policy,which stipulates that the manufacturing capacity of zero-emission vehicles must

82、reach 30%of total capacity by 2030.In order to boost domestic manufacturing,these major countries have also focused on attracting supply-side investments.1.CURRENT SITUATION OF E Vs IN INDONESIA1 8REPORT:UNLEASHING INDONESIAS ELECTRIC MOBILIT Y POTENTIALARTHUR D.LITTLEWITH THE GLOBAL TREND MOVING TO

83、WARD ELECTRIFICATION,INDONESIA MUST PIVOT AND EMBRACE ITIn 2021,the Indian government introduced the Production Linked Incentive Scheme(PLI)for the automobile and auto components sectors,providing incentives to automakers based on milestone-based production targets.This is expected to reduce the cos

84、t of advanced components by 15%-20%.In June 2022,the Thailand Board of Investment announced a similar new measure offering a 90%reduction of import duty for five years on raw and essential materials for EVs and high-energy-density battery producers,provided the output is sold domestically.With the g

85、lobal trend moving toward electrification and major economies in APAC aiming to establish itself as a global manufacturing hub for EVs,Indonesia must pivot and embrace electrification as a key trend to remain competitive in the global automotive production market.THE CASE FOR EVsCleaning up the envi

86、ronment&meeting net-zero targetsIndonesias commitment to achieving net-zero emissions by 2060 is underscored by the need to decarbonize the transport sector.According to 2019 data,the transport sector is the second-biggest contributor of GHG,accounting for 27%of the countrys emissions.Furthermore,po

87、llution in Indonesia has been on the rise;between 1990 and 2018,GHG increased 313.47%,resulting in an economic loss of over US$220 million(6.6%of Indonesias GDP purchasing power parity in 2019 alone,as reported by the World Bank).To address the GHG increase and attain its net-zero goal,Indonesia sub

88、mitted an enhanced nationally determined contribution to the United Nations Framework Convention on Climate Change in 2022,which outlined its plans to reduce emissions by 32%(without any support)and by 43%(with conditional support)by 2030.Prioritizing xEV,especially EV,is therefore vitally important

89、,given its critical role in emissions reduction(see Figure 1).Figure 1.Estimated global well-to-wheel gCO2/km emissions Note:EV emission shown with majority of battery around 40 kWhSource:Arthur D.Little,International Energy Agency(IEA)Note:EV emission shown with majority of battery around 40 kWhSou

90、rce:Arthur D.Little,International Energy Agency(IEA)Figure 1.Estimated global well-to-wheel gCO2/km emissions 144.297.977.366.4ICEHEVPHEVEVRenewable:90%of marketWulingDFSKE100&E200HatchbackABEV20232-seat hatchback mini EV;announced at Indonesia Electric Motor Show,2019;E100&E200 expected to launch J

91、uneJuly 2023Glory E3SUVSUV-CBEV2023C-segment SUV;announced at Gaikindo Indonesia International Auto Show,2019;model expected to launch June 20233%1%MGZS EVSUVSUV-BBEV2023B-segment SUV;EV version of ICE MG ZS;model set to launch June 20231%Yaris CrossSUVSUV-BFHEV/gasoline20235-seat SUV for emerging m

92、arket;2.0L 4-cylinder engine or 1.5L 3-cylinder engine with hybrid system;launched May 2023 3 3CHALLENGE 2:LIMITED SUPPORT FOR ADDITIONAL CHARGING INFRASTRUCTURE As of 2022,Indonesia had over 5,500 fuel stations,but only 600 EV charging stations,highlighting the stark disparity between the two and u

93、nderscoring the inadequacy of the current charging infrastructure.A recent survey conducted by ADL revealed that over 65%of respondents cite the lack of sufficient charging infrastructure as one of the key barriers for EV adoption.Meanwhile,Indonesia is facing the need to invest approximately US$3.7

94、 billion to install 31,000 commercial charging stations over the next decade,aiming to achieve its EV goals by 2030.This substantial expansion of charging infrastructure represents a significant development for Indonesia,considering the current state of charging infrastructure installations.A divide

95、d strategic focusIndonesias charging infrastructure progress has been hindered by the governments divided focus on different segments.The country has prioritized the development of battery-swapping stations for e2W,while focusing on charging infrastructure for e4W.This strategy has been driven by th

96、e significant adoption of e2W vehicles in Indonesia,with an estimated sales target of 2.45 million e2Ws by 2030.Battery-swapping stations have emerged as a preferred solution to address the limited range and charging constraints of these vehicles.This approach reflects the governments strategy to pr

97、ioritize the segment with higher adoption rates and address the immediate needs of the market.As a result,the deployment of charging stations for e4W has received lesser emphasis,compared to battery-swapping stations for e2W.However,it is crucial to recognize that charging infrastructure remains vit

98、al for the overall growth of Indonesias EV ecosystem.As the market expands and demand for e4W increases,the establishment of a comprehensive network of charging stations becomes increasingly important.To ensure balanced support for both e2W and e4W segments,the Indonesian government must allocate su

99、fficient resources and attention to the development of charging infrastructure for e4W,alongside the deployment of battery-swapping stations for e2W.This holistic approach will facilitate the sustainable advancement of the overall EV ecosystem in Indonesia.Absence of strong pushIndonesias infrastruc

100、ture development is also restrained by the governments lack of incentives for EV charging operators,in terms of financial support,regulations,and standardized protocol.Currently,there is no financial support provided to attract new players to enter the EV charging station market and regulations rega

101、rding infrastructure are still under development.Standardized charging protocols are absent,resulting in a fragmented charging infrastructure network.Unlike other markets in Thailand and India,where incentives are offered to encourage the development of charging infrastructure,Indonesia has yet to i

102、mplement similar measures.In Thailand,for example,charging infrastructure operators can benefit from a three-to-five-year CIT exemption,which incentivizes investment and growth in the sector.Similarly,India offers a low-cost capital plan specifically designed to support the deployment of charging in

103、frastructure.These incentives play a crucial role in attracting private sector participation and stimulating investments in charging infrastructure.By providing tax exemptions and access to low-cost capital,governments can significantly reduce the financial burden on suppliers and operators,making i

104、t more financially viable to establish charging stations across the country.This,in turn,helps address the infrastructure gaps and supports the widespread adoption of EVs.In contrast,the absence of similar incentives in Indonesia hinders the pace of charging infrastructure development.Without such i

105、ncentives,suppliers and operators face greater financial challenges and may be less motivated to invest in the necessary infrastructure.This results in slower progress and limited availability of charging stations.3 4REPORT:UNLEASHING INDONESIAS ELECTRIC MOBILIT Y POTENTIALARTHUR D.LITTLEState-owned

106、 electricity company monopolyIndonesias primary energy provider,PLN,holds the authority to establish fixed prices for EV charging businesses,potentially creating barriers for new players to compete on pricing and limiting their market share.Additionally,PLNs ambitious expansion plans in the charging

107、 infrastructure sector may further strengthen its dominant position and impede the entry of new competitors.To foster a more open and competitive market,the Indonesian Energy and Mineral Resources Ministry introduced a draft of new incentives for EV charging stations in February 2023,which included

108、plans to subsidize a favorable electricity tariff of US$0.05/kWh for EV charging customers.However,given PLNs advantage as an energy provider,it could potentially lower its prices to maintain its competitiveness in the market.CHALLENGE 3:UNDERDEVELOPED NICKEL PROCESSINGThe importance of nickel in ba

109、ttery processingThe cell constitutes approximately 42%of the manufacturing cost of a battery.Within the cell,the cathode and anode make up the largest share of the overall cell cost,accounting for 50%and 12%,respectively(see Figure 14).Within an NMC-based cell,nickel accounts for the biggest portion

110、 of cathode material,which is predominantly used for 4W vehicles and e-bus batteries,as it possesses the high energy density needed to power large-scale vehicles.As a result,nickel is estimated to make up about 10%of a batterys total cost,which makes it a significant component of battery production.

111、For Indonesia,being endowed with 21 million metric tons of nickel provides a strategic opportunity for financial and economic gain.Its importance is further intensified as much higher levels of nickel are preferred within NMC-based cells,with an evolution from NMC 333 to NMC 532 to NMC 662,and,most

112、recently,NMC 811.According to Frontier Energy Research,NMC 811 is expected to be the dominant grade,given that lower usage of cobalt could help mitigate the supply risk.Underdeveloped class 1 nickel productionIndonesia has been endowed with substantial nickel reserves;however,the majority of existin

113、g capabilities are channeled toward exploiting class 2 nickel,a low-purity type in either unprocessed form or an intermediate product used in stainless steel and pure nickel metal or chemical production.For many years,this has been a source of Indonesias forex reserves,accounting for a value of US$1

114、.1 million in 2019 before the country introduced its nickel-export ban.High purity class 1 nickel can be used for cell manufacturing.Given that Indonesia possesses mostly low-grade ores,the most viable option to produce class 1 nickel is through the construction of an advanced technology smelter(HPA

115、L)to process its existing low-grade reserves.However,there are critical concerns regarding the construction of HPAL,including intensive capital investments and technical complexity.According to a former Indonesian Deputy Minister for Energy and Mineral Resources,the CAPEX required for HPAL smelter c

116、onstruction could reach US$65,000 per ton of nickel,five times higher than the conventional smelter,the rotary kiln-electric furnace(RKEF).Some major local nickel manufacturers,such as Antam and PT Vale Indonesia,have been facing rising debt and declining profits.For example,Antams financial stateme

117、nts reveal significant year-over-year declines in profitability(down 193%in 2019),which has been further magnified due to COVID-19-induced slowdowns.Note:Cost breakdown for general battery cells in market (usually,prismatic EV cells)Source:Arthur D.Little,BloombergFigure 14.Components share in cell

118、cost,2021Note:Cost breakdown for general battery cells in market(usually,prismatic EV cells)Source:Arthur D.Little,BloombergFigure 14.Components share in cell cost,202150%12%7%24%4%3%Manufacturing&depreciationAnodeSeparatorBattery housingElectrolyteCathode3 5Another limitation of HPAL technology is

119、that its complex process makes it difficult to deploy successfully.Technically,the process involves high-pressure and high-temperature chemical reactions,which require careful monitoring and control to ensure optimal performance and prevent equipment failure,which is difficult to manage.For example,

120、First Quantum Minerals(FQM)reopened its Ravensthorpe mine and HPAL plant in Western Australia in March 2020 amid rising nickel prices,but the mine has faced two technical issues in temperature adjustment,which led FQM to downgrade its 2020 production guidance by 2,000 metric tons to 13,000-15,000 me

121、tric tons of nickel.Historically,nickel producers in Indonesia have primarily focused on class 2 mining and smelting and did not have much presence in class 1 production(see Figure 15).Also,using class 1 nickel for cell manufacturing is a recent phenomenon,hence limited incentives are available for

122、conventional nickel producers to upgrade their capabilities.Today,nearly 70%of global nickel demand is driven by the steel sector,while batteries only represent approximately 10%(see Figure 16).Source:Arthur D.Little;Munikhah,IAT,et al.“Scenario Analysis of Indonesian Ferronickel Supply Chain Resili

123、ence with System Dynamics.”Jurnal Teknik Industri,Vol.24,No.2,December 2022Figure 15.Indonesias nickel production value chainFigure 16.Nickel demand from stainless steel and battery sectorsSource:Arthur D.Little,RoskillSource:Arthur D.Little;Munikhah,IAT,et al.“Scenario Analysis of Indonesian Ferron

124、ickel Supply Chain Resilience with System Dynamics.”Jurnal Teknik Industri,Vol.24,No.2,December 2022Figure 15.Indonesias nickel production value chainAvailable in IndonesiaNot available/processed in Indonesia Under development Remarks:APPLICATIONFINISHEDGOODFORMING/REFININGSMELTING/PROCESSINGORESapr

125、olite oresSulphide oresLimonite oresNPI(4-15 Ni)Ferronickel(16%-30%Ni)Nickel matte(49%-75%Ni)Mix hydroxide precipitateMix sulphide precipitateNickel sulphate Cobalt sulphateStainless steel billetStainless steel slab Stainless steel welded pipeStainless steel seamless pipe Stainless steel bolt&nut Ni

126、ckel-based alloy PlatingBatteriesStainless steel CRCBatteries precursor(NCA,NMC)Stainless steel HRCStainless steel ROD/barPure nickel(99.9%)Railways Oil&gas trans.Building AutomotiveShip ConstructionAgricultureHealth toolsHouseholdDefenseElectronic casingNeed HPAL technology to process ores Source:A

127、rthur D.Little,RoskillFigure 16.Nickel demand from stainless steel and battery sectors46710121416171919706968666564636261600%10%20%30%40%50%60%70%80%2019202020212022202320242025202620272028BatteriesStainless steel%of total source3 6REPORT:UNLEASHING INDONESIAS ELECTRIC MOBILIT Y POTENTIALARTHUR D.LI

128、TTLEOnly recently have some of Indonesias nickel smelters ventured into developing facilities for class 1 nickel processing.Thirteen development projects using HPAL technology have been announced;only one has been operational since 2021,while the rest are in the construction phase or undergoing feas

129、ibility studies(see Figure 17).MAJOR FOREIGN PLAYERS HAVE SHOWN INTEREST IN BATTERY MATERIAL PLANTSIndonesias Antam,the largest producer of nickel in the world,is building new capabilities including a nickel-iron plant using HPAL technology,which is yet to be commenced.Additionally,major foreign pla

130、yers have shown interest in battery material plants,as demonstrated by a signed agreement between US-based Ford Motors,Chinas Zhejiang Huayou Cobalt,and Vale Indonesia,which included an investment of US$4.5 billion in an HPAL plant.The commercial operation of the plant is expected to commence in 202

131、6.CHALLENGE 4:LFP BATTERIES VS.NMC BATTERIESLFP batteries contain lithium iron phosphate as the cathode,while NMC batteries contain lithium nickel manganese cobalt oxide.ADL identified some major differences between LFP and NMC batteries,which may result in certain applications and geographies prefe

132、rring LFP over NMC:-Cell lifespan.Degradation,the ability of batteries to hold a charge,directly affects cell lifespan.Degradation happens slower in LFP batteries than in NMC.As a result,over time,LFP can store more power than NMC.-Cell safety.Cell and battery safety is of primary importance,given i

133、ts explosive nature.Besides being a fire hazard,damage to the cell(and thereby battery)also has an impact on the expense to a consumer,given that 35%-40%of a vehicles cost is from its battery.LFP batteries are safer than NMC batteries,thanks to their stable lithium chemistry.-Higher temperature tole

134、rance.LFP batteries have less degradation at higher temperatures,which is described as“thermal runway.”LFP batteries hit thermal runway at 270 degrees Celsius,while NMC hits it at 210 degrees Celsius.This gap is quite significant and makes a key difference for high-capacity batteries where heat mana

135、gement is a key issue.Source:Arthur D.Little;Durrant,Angela.“The Rise and Rise of Indonesian HPAL But Can It Continue?”The Assay,2022Figure 17.Indonesian nickel projectsSource:Arthur D.Little;Durrant,Angela.“The Rise and Rise of Indonesian HPAL But Can It Continue?”The Assay,2022Figure 17.Indonesian

136、 nickel projectsNAMELOCATIONPRODUCTCAPACITY(KT NI/A)CAPEX(US$M)STATUSPT Halmahera Persada Lygend-Ph 1Obi IslandMHP/sulphate371,063ProductionPT Halmahera Persada Lygend-Ph 2Obi IslandMHP/sulphate17437ProductionPT Halmahera Persada Lygend-Ph 3Obi IslandMHP/sulphate60AvailabilityPT QMB New EnergyMorowa

137、liSulphate501,600PlanningHuayue Nickel-CobaltMorowaliMHP601,600ProductionPT HuafeiWeda BayMHP1202,080PlanningBatangJava EastSulphate303,500PlanningCBLHalmaheraSulphate402,000PlanningHuabaoSulawesiMHP60AvailabilityHuashanPomalaaMHP1202,604AvailabilitySoroakoSulawesiMHP60AvailabilityBASF/ErametWeda Ba

138、yMHP42AvailabilityPT Ceria Nugraha IndotamaObi IslandMHP40AvailabilityJinchuanObi Island EastMHP20AvailabilityPT AntamHalmaheraSulphate756,400AvailabilityTotal MHP/sulphate potential capacity8313 7-Cycle life.NMC cycle life is around 800-1,000 cell cycles,while LFP batteries have a typical cycle lif

139、e of 2,000 and may reach 3,000 if used properly,thereby showcasing higher durability.-Supply chain risks.LFP batteries do not rely on nickel and cobalt,which present supply chain risks.Moreover,certain markets are known to produce these minerals in an environmentally harmful manner,thus neutralizing

140、 the motivation for switching to EVs.For example,cobalt is primarily produced in the Democratic Republic of the Congo and Russia;both countries are mired in controversy.The Congo has been accused of using child labor,while sanctions against Russia have prompted industries to seek alternatives.On the

141、 other hand,LFPs major materials are iron and phosphate,which are available in abundance.Lithium is common in both NMC and LFP,with NMC 622 and LFP containing the same amount of lithium,as shown in Figure 18.As a result,from a lithium perspective,the supply chain risks for both variants are the same

142、.Hence,the overall supply chain risk in NMCs is much higher than LFPs(see Figure 19).NMC batteries are preferred due to their higher energy density compared to LFP,which essentially means NMC would offer higher range for a similar weight of battery.This is because the chemical structure of LFP hinde

143、rs the release of oxygen,resulting in a higher self-discharge rate.The focus on fast and ultra-fast charge technology,as well as improvements to LFP-based cell chemistry make the drawback of lower energy density of LFP batteries less significant.This poses a threat to Indonesias potential from nicke

144、l,which is expected to be around US$4-$6 billion per year.This is calculated based on an expected annual production of 195,000 tons of class 1 nickel in 2027 and an expected price of US$21,000 per ton in the same year.Source:Arthur D.LittleFigure 18.Mineral content for a 60 kWh lithium-ion batteryFi

145、gure 19.LFP vs.NMC resources Note:1)At current rate of extractionSource:Arthur D.LittleSource:Arthur D.LittleFigure 18.Mineral content for a 60 kWh lithium-ion batteryNMC811Nickel(80%)manganese(10%)cobalt(10%)NMC622Nickel(60%)manganese(20%)cobalt(20%)LFPLithium iron phosphateLITHIUM5 kg6 kg6 kgCOBAL

146、T5 kg11 kg0 kgNICKEL39 kg32 kg0 kgMANGANESE5 kg10 kg0 kgGRAPHITE45 kg50 kg66 kgALUMINUM30 kg33 kg44 kgCOPPER20 kg19 kg26 kgSTEEL20 kg19 kg26 kgIRON0 kg0 kg41 kgNote:1)At current rate of extractionSource:Arthur D.LittleFigure 19.LFP vs.NMC resources 2021 PRODUCTIONkTonsRESOURCERESERVESkTonsNO.YEARS T

147、O RUN OUT1MAIN COUNTRY PRODUCERSPhosphatePO4China,Morocco,US,Russia,JordanIronFeAustralia,Brazil,China,IndiaLithiumLiAustralia,Chile,China,ArgentinaManganeseMnSouth Africa,Gabon,Australia,China NickelNiIndonesia,Philippines,RussiaCobaltCoCongo,Russia,Australia217,63019,9502,7481,576,00016510622,4251

148、,492,000102,54071,059,00084,608,0007,64932754212753746LFPNMC3 8REPORT:UNLEASHING INDONESIAS ELECTRIC MOBILIT Y POTENTIALARTHUR D.LITTLECHALLENGE 5:BALANCE BETWEEN REGIONAL DEPENDENCE&NATIONAL PRIORITIESRegional dependence in cell manufacturing Depending on the cell type(LFP,NMC,or others),different

149、minerals are required,leading to different composition in overall cell,battery,and thereby vehicle.Given Indonesias ambition of 2.5 million e2Ws and e3Ws and recommended target of 340,000 EVs by ADL,Indonesia would require 25 million tons of lithium,134 million tons of nickel,and 46 million tons of

150、cobalt.While nickel can be sourced locally,Indonesia is dependent on nearby countries for other minerals.From a regional perspective,Australia,India,the Philippines,and China are key countries that could provide Indonesia other minerals(see Figure 20).ADVOCATING A NATIONAL AGENDA MAY EXACERBATE SUPP

151、LY CHAIN RISKSTo drive their goals to build their EV ecosystems,some of these countries are considering prioritizing local sourcing and local industries.India,for instance,under its FAME-II policy is considering restricting incentives to only those models that meet a certain level of local sourcing.

152、Indonesias local content requirement will increase from 40%to 80%after 2030.Advocating a national agenda may exacerbate supply chain risks for LIB cell minerals.An ADL analysis reveals that by 2030,lithium and nickel will be the key minerals facing a supply chain risk with the expected supply fallin

153、g short by 52%for lithium and 5%for nickel.While Australia and the Philippines have not introduced policies like India and Indonesia,Indonesias overemphasis on local content regulations and policies such as restricting export of nickel may prompt these markets to undertake similar countermeasures th

154、at would further magnify the supply chain risks.Source:Arthur D.Little;US Geological Survey,January 2020Figure 20.Natural resources required in battery production with selected countriesSource:Arthur D.Little;US Geological Survey,January 2020Figure 20.Natural resources required in battery production

155、 with selected countries23%7%17%52%52%8%12%24%5%20%6%12%4%17%9%17%12%AustraliaChina2%4%3%3%1%BrazilCongoChile4%RussiaVietnamPhilippines2%4%IndiaIndonesia1%NickelCobaltAluminaLithiumManganese%global reserve3 9Australia may step up localized LIB battery manufacturingAustralias automotive industry has

156、a high vehicle penetration at around 800 per 1,000,which indicates an oversaturated car market.The automotive car market in Australia is expected to get a new life as its government plans a target of 3.8 million xEVs on the road by 2030,up from the current volume of 83,000 vehicles,implying a CAGR o

157、f 61%.Furthermore,the major states and territories that account for 80%of new car sales in 2022,including New South Wales,Victoria,Queensland,and the Australian Capital Territory,have set specific targets to promote xEV and EVs(see Figure 21).In light of these developments,a strong demand for xEVs,i

158、ncluding EVs,is expected.Australia is one of the only countries to have a good balance of major LIB cell materials.From conservative estimates,this presents a revenue opportunity of US$11.3 billion by 2030,which Australia would look to exploit in light of a recent recession.The country experienced n

159、egative GDP growth of-0.1%in 2020 for the first time in 20 years and a slowdown in the mining sector,which contributes around 10%of GDP.The mining industry has been registering a slower growth rate over the last decade.Local automotive manufacturing is one of the proposed goals in the recent release

160、 of a National Electric Vehicle Strategy consultation paper,a strategic document released by the government to solicit feedback from interested stakeholders.ADL believes Australia may look to develop its own LIB cell manufacturing given Chinas stronghold over LIB supply chain material (see Figure 22

161、)and Australias plan to de-risk from China.Source:Arthur D.LittleFigure 21.Australias state and territory targets for EVsFigure 22.Share of processing volume by country for selected minerals,2019Note:Values for copper are for refining operationsSource:Arthur D.Little,IEA,World Bureau of Metal Statis

162、tics,Adamas IntelligenceSource:Arthur D.LittleFigure 21.Australias state and territory targets for EVsSTATE/TERRITORYTARGETAustralian Capital TerritoryBan ICE new car sales by 2035Queensland100%of new passenger vehicle sales to be BEV by 2036New South Wales50%of new cars sold to be xEV by 2030Victor

163、ia50%of new cars sold to be xEV by 2030Note:Values for copper are for refining operationsSource:Arthur D.Little,IEA,World Bureau of Metal Statistics,Adamas IntelligenceFigure 22.Share of processing volume by country for selected minerals,20190%20%40%60%80%100%LithiumRare earthelementsCobaltCopperNic

164、kelRest of world Japan China China China China China Chile Chile Indonesia Argentina Japan FinlandBEMalaysia Rest of world Rest of world 4 0REPORT:UNLEASHING INDONESIAS ELECTRIC MOBILIT Y POTENTIALARTHUR D.LITTLELOCAL GOVERNMENTS MAY CONSIDER UNILATERAL TRADE RESTRICTIONS AND NATION-FOCUSED AGENDASt

165、artup Recharge Industries is setting up a 2 GWh facility without any materials from China,which was heavily advertised across Australian media.Assuming Australias LIB cell manufacturing industry picks up,local governments may consider unilateral trade restrictions and nation-focused agenda if simila

166、r policies are introduced by nearby countries,including Indonesia.CHAPTER SUMMARYIndonesias EV ambition faces some fundamental challenges such as overdependence on Japanese OEMs,the potential threat of LFP,lack of grade 1 nickel capabilities,and balance between regional dependence and the national a

167、genda.These challenges need to be addressed after taking a pragmatic view of the market situation,regional factors,and global circumstances.The level of impact these challenges have can drastically impact government overall targets for 600,000 EVs and 2.45 million e2Ws by 2030.In the next chapter,we

168、 introduce ADLs GEMRIX rating to showcase Indonesias ranking against other global benchmarks and its current standing before providing an assessment of Indonesias targets with some key solutions to these challenges.41The topic of climate change has caused heated debates over the last few years,garne

169、ring strong interest from corporate leaders and politicians around the world.Post-COVID-19,climate change and sustainability have regained attention,helped in part by the recent COP26 climate change summit and similar movements.Companies find themselves facing legislative policy changes and societal

170、 pressure,leading them to undergo a strategic realignment.Globally,these fundamental drivers have motivated automotive executives to move e-mobility higher on their strategic agendas.The COVID-19 pandemic and climate change have also pushed governments to act and business operators to rethink their

171、missions and how they can become more sustainable.Prioritizing the EV industry is a solution with significant potential to mitigate some of the environmental problems caused by climate change.Countries around the world differ in their EV-related requirements and their approaches for realizing true E

172、V potentials.Understanding these differences would allow governments to implement a“once-in-a-century”disruption like switching from fossil fuel to electric energy and automotive leaders to invest in future mobility services like transitioning from ICE vehicles to EVs.To assist executives in automot

173、ive organizations around the world,ADL has developed a methodology to evaluate the readiness of markets for electric mobility.Its metrics enable a solid understanding of the current situation.The standardized approach and an evaluation metric allow a comparison across markets of overall readiness.He

174、re,we provide an overview of the findings from the 20222023 edition,centering the discussion on Indonesia.According to the latest ADL GEMRIX,Norway is the global EV leader with a score of 115.Norway is followed by China,Singapore,Germany,and the UK;these countries have all prerequisites for EV mobil

175、ity in place,and EVs are on the verge of becoming mainstream.These countries are followed by the US,Japan,Thailand,the UAE,and Indonesia;here,EVs are still inferior to ICE cars,though customers are becoming more comfortable with the idea of EVs as infrastructure ramps up.Lastly,India,Vietnam,Mexico,

176、Brazil,and South Africa have just come on the scene and face major challenges from costs and infrastructure.GEMRIX METHODOLOGYThe current edition of ADLs GEMRIX has been calculated for Indonesia and 14 other countries to give a comparative/relative picture of Indonesia against other markets.The inde

177、x is designed to compare the market conditions for EV and ICE-driven vehicles.The index has been calibrated around a notional threshold value of 100.A score of 100 implies that market readiness for EVs is on par with ICE vehicles across relevant buying criteria like costs,utility,and availability.A

178、score over 100 shows that EVs are even more beneficial than ICEs.An EV readiness score of 100 means that in a given country,it is equally beneficial to buy and operate an EV as an ICE vehicle.Market readiness is evaluated in five major categories that drive EV adoption:(1)macro-economic market facto

179、rs,(2)the EV market and competitive landscape,(3)customer EV readiness,(4)public charging infrastructure,and(5)TCO and regulations.4.INDONESIA ELEC TRIC MOBILIT Y RE ADINESS INDE X4 2REPORT:UNLEASHING INDONESIAS ELECTRIC MOBILIT Y POTENTIALARTHUR D.LITTLEEach category consists of six to 15 specific

180、data points,which were analyzed with a standardized metric for each country,rendering a total of 46 variables per country(see Figure 23).The five categories were weighted based on their relevance for EV adoption.Markets can score a different number of points in each category,which vary according to

181、the weight of the category and their market data.The individual point score is calculated based on analytics that consider relative and absolute performance measures.The final index score is the sum of performance indicators from the five subcategories.This allows a detailed evaluation of Indonesias

182、 e-mobility readiness.GLOBAL E-MOBILITY READINESS DISTRIBUTIONADLs GEMRIX classifies countries by their level of e-mobility readiness.Figure 24 shows the three levels,with only Norway achieving full readiness with a score of 115 on the 20222023 index.Higher values indicate advantages for EV,while lo

183、wer scores mean benefits for ICE.The rest of the benchmarked countries following Norway can be broadly categorized into three clusters as to their readiness:HPC=high-powered charging networkSource:Arthur D.Little Figure 23.Calculating GEMRIXFigure 24.Readiness for e-mobility,by countrySource:Arthur

184、D.LittleHPC=high-powered charging networkSource:Arthur D.Little Figure 23.Calculating GEMRIXFinal index100 points10 points15 points25 points25 points25 pointsAC40%Socio-demographic40%Market size70%Cust.EV infra60%HPC network30%Fin.incentives BEV40%Mobilization rate30%EV product offerings30%Cust.EV m

185、indset20%Energy cost40%Energy market30%Cust.use cases20%DC30%ICE restrictions20%Macro indicatorsEV marketCustomer EV readinessPublic charging infrastructureTCO®ulationsSource:Arthur D.LittleFigure 24.Readiness for e-mobility,by countryAmbitiousFollowersEmergingEV MarketsStartersGlobalbenchmark116

186、8581767457474645433734323018GermanySingaporeBrazilIndonesiaNorwayChinaUKUSMexicoUAEVietnamSouth AfricaJapanThailandIndia4 31.Ambitious Followers.China,Germany,UK,and Singapore earned roughly around 80 points.In these countries,switching to EV is no longer an option only for enthusiastic pioneers but

187、 has become a valid choice for the mass market.All four countries have concise politically driven agendas to soon reach equality between EV and ICE.Driven by this agenda,the industry is gearing up respectively.In recent years,consumers saw a major jump in number of available EVs and charge points.2.

188、Emerging EV Markets.The US,Japan,Thailand,the UAE,and Indonesia scored between 40 and 60.These markets still show significant drawbacks financially as well as in ease of operation for EV over ICE.However,all those markets are heavily investing in electric mobility and will most likely catch up soon.

189、The US leads this group,scoring roughly 10 points more than the other countries in this group,boosted by its status as the birthplace of Tesla.States on the East and West Coasts have made inroads toward attaining the prerequisites,but in much of the country,particularly the large middle region,ICE v

190、ehicles remain the preferred option due to emotional and economic factors.3.Starter countries.This group is comprised of India,Vietnam,Mexico,Brazil,and South Africa.In these countries,the topic of e-mobility is under discussion;however,socioeconomic conditions and the desire of politicians to win e

191、lections overshadow it,and it is clear that EVs are not the topmost point for politicians to win elections.In these countries,cost and utility considerations factor into purchase decisions more than the vehicles environmental impacts.Accordingly,we see an uptake in areas where TCO of EV starts to be

192、 equal or even better than ICE.This can currently be seen in the 2W and 3W space,which in those Starter markets account for a significant share of the overall market.For example,in fiscal year 2022,46%of 3Ws in India were already electric.MARKET READINESSThe actions of industry leaders in each count

193、ry contribute significantly to the appeal of EVs to customers.The number of vehicles available and how they are brought to market can spark a consumers interest or push them away from even thinking about EVs if the options are not attractive.A combination of factors beyond pricing are at play,includ

194、ing the variety of products offered,the segment coverage,product quality,design,marketing strategy,and concept creativity.Among benchmarked countries,Norway is the only one with an EV sales share of more than 50%.EVs have a comparatively low sales share,approximately 15%-25%,in countries from the Am

195、bitious Follower group.Leading markets have a range of EV models with six countries,including Norway and Germany,having more than 75.However,for globally acting OEMs there is no one-size-fits-all solution.Manufacturers need to ensure supply while crafting individual sales strategies for countries th

196、at consider the readiness of each market.Indonesia has close to 18 models of xEV(see Figure 25),with 10 models in the EV category.The shift toward a higher number and greater share of EV models indicates a more mature EV market.Indonesia has not developed itself to this stage yet,given that major in

197、cumbent OEMs are Japanese.Moreover,Indonesia lacks any significant local entity such as Thailands Foxconn or Indias M&M and Tata,which would further delay new EV launches.The entry of Chinese companies to the market may generate a positive sentiment to the number of models,however the imposition of

198、local content regulations limits the prospect.4 4REPORT:UNLEASHING INDONESIAS ELECTRIC MOBILIT Y POTENTIALARTHUR D.LITTLECUSTOMER READINESSObjective factors,like the availability of charging stations,are important considerations when purchasing a vehicle,but customer readiness and adoption does not

199、depend only on these traits;it is also a subjective matter influenced by personal preferences and perceptions of EVs.Cost plays an outsize role for many consumers.In developing countries like Indonesia,EV prices are still high,while income is relatively low,posing a challenge to the goal of increasi

200、ng the number of EVs on the road.If OEMs decrease costs and the government puts forth incentives,it could become possible for more customers to choose an eco-friendlier option and enjoy electric mobility.Even though EV prices have fallen overall,in many countries low income makes investing in an EV

201、an especially complex purchase decision.A customers readiness to buy an EV is determined by their willingness and their ability to do so;ability is influenced by accessibility and price.The median yearly income in Indonesia is US$9,500.Multiple models of ICE cars are available,with the cheapest rang

202、ing in price from US$6,700-$10,000,which is barely affordable given the median annual income.The cheapest EV in Indonesia starts at US$16,000,after applying subsidies.THE ISSUE OF ACCESSIBILITY IS CLOSELY TIED TO CHARGINGAt this price,e4Ws are not accessible by the general public.e2Ws prices are muc

203、h more attractive.The cheapest ICE scooter goes for US$490(ECGO 2 2023)with ICE e2Ws available for US$320(Selis Mandalika).Furthermore,a scooter can be charged using a standard household plug,while a car would require installation of wallbox or a nearby public charging station,which is an additional

204、 hurdle for the average e4W customer in Indonesia.The issue of accessibility is closely tied to charging.ADLs study revealed a correlation between the share of the population living in urban areas and EV readiness(see Figure 26).Lack of access to public charging infrastructure is a massive hurdle to

205、 the adoption of EVs.Globally,the density of petrol stations in rural areas far exceeds that of public charging points.Charging an e2W does not create the same accessibility issue,given it can be effectively charged with standard household power lines.Figure 25.Number of models offered,2022 Source:A

206、rthur D.LittleSource:Arthur D.LittleFigure 25.Number of models offered,2022 145225Norway13UKChinaIndonesiaGermanyJapanUSSingapore75UAEThailand3980MexicoIndia13BrazilVietnam South Africa1601581011779293018EVxEV4 5With most EVs still have lower distance ranges compared to their ICE counterparts,countr

207、ies with a significant rural population have a significant challenge to solve.In 2021,Indonesias rural population stood at 43%.Environmental concerns play the second most important role in EV readiness.The number of governmental activities and number of years since those activities were introduced s

208、how a clear correlation between EV readiness and environmental awareness.While Norway and Germany have been devoted to sustainability issues for years,Indonesia has only recently started to make inroads toward prioritizing carbon-neutrality targets and decarbonizing the transport sector.To summarize

209、,GDP and income levels indicate market drivers.These may include cost or other societal trends driven primarily by cost or if other societal trends such as environment,sustainability play a role.GDP,GDP per capita,and income-related factors still dominate purchase decisions,making cost an important

210、part of improving customer readiness.INFRASTRUCTURE READINESSInfrastructure readiness refers to the number,distribution,and quality of charge points and how well they function.Even in benchmark market Norway,most EV charging still occurs through private chargers.However,a dense public infrastructure

211、 for EV charging may make the vehicles more attractive to potential consumers by lowering psychological barriers and making EVs more appealing from a usability perspective.Public charging points are a necessity for customers who have no access to private parking and charging.Evaluating infrastructur

212、e readiness was accomplished by examining charging power(AC,DC,high-powered charger)in addition to identifying the number of available charging facilities.Geographical distribution was also taken into account.Charging infrastructure is critical to infrastructure readiness and customer EV adoption.As

213、 of March 2022,Indonesia had 267 EV charging stations in 195 locations.Before market solutions and entrepreneurs appear,the government needs to show its support in the form of investments to support infrastructure development.The governments long-term target is 31K charging stations and 67K battery

214、swap stations operational by 2030.Within the charging station targets,no public information about the distribution between DC and AC chargers has been provided.Range anxiety,the possibility that a vehicles battery will run out of charge en route to the destination,is a serious and legitimate concern

215、.DC chargers have fast charge times and are ideal for highways,making them a solid option for addressing range anxiety.PLN is leading efforts to ramp up charging infrastructure in Indonesia with a focus on three types of charging services:medium charging,fast charging,and ultra-fast charging.Source:

216、Arthur D.LittleFigure 26.Demographic conditions affecting EV readiness across countriesSource:Arthur D.LittleFigure 26.Demographic conditions affecting EV readiness across countries68.512.650.859.548.268.940.742.77.610.12.07.64.52.06.353.57.538.442.136.253.331.233.45.76.31.75.83.12.24.684%64%78%100%

217、84%83%92%87%53%81%35%88%58%39%67%-20%0%20%40%60%80%100%0.010.020.030.040.050.060.070.080.090.0100.0GDP per capita(k USD)Average net income per capitaShare of urban population4 6REPORT:UNLEASHING INDONESIAS ELECTRIC MOBILIT Y POTENTIALARTHUR D.LITTLEConstructing home charging infrastructure through w

218、allboxes in coordination with OEMs is also a priority.In the growing EV market,the availability of private charging at home and work is the key enabler.As EV adoption gains momentum,focusing on a public charging infrastructure is critical.A dense and user-friendly public charging infrastructure is n

219、ecessary to support long-distance EV travel,which is especially important in Indonesia,given poor public transport,mixed use of vehicles for personal and business travel,and a substantial share of rural population.As a result,going forward,emphasis should be on DC charging,and specific targets must

220、be announced so that the issue of range anxiety is addressed effectively.The Indonesian government set a ceiling tariff of US$0.16/kWh and service costs at US$1.47 for a fast charger and US$4.19 for an ultra-fast charger.Strategic deployment of charging stations as well as evaluating different feasi

221、ble charging business models must be studied.Relevant data points to develop a commercially viable business case for financiers and charging infrastructure operators are also needed.GOVERNMENT READINESSGovernment readiness is shown by its willingness to initiate action,starting with strong incentive

222、s to purchase EVs.If the government is dedicated to its climate-related goals,it needs customers to purchase EVs,and not at a premium.Incentives should reach beyond purchase prices;governments also need to implement additional demand-side and supply-side incentives to reduce TCO.Without specific inc

223、entives and legislative interventions,it will be nearly impossible to overcome the barriers to EV adoption in time to rectify climate damage.Both legislative and regulatory bodies have obligations to shape the market for EVs.For over a century,the entire ICE vehicle ecosystem was supported by unimag

224、inable amounts of investment and subsidies to optimize their appeal.Governments have used different approaches to incentivize EVs and/or disincentivize ICE vehicles.There was a time when EVs presented a multitude of risks,but that time is over.According to ADL analysis,incentives work in many countr

225、ies.An examination of the combined number of subsidies offered in different countries shows that countries with higher subsidies over an extended time period generally scored higher in the readiness index(see Figure 27).Sales incentives can move the entire EV industry forward.Indonesia offers consum

226、ers a few demand-side incentives.These include:-Sales price incentives.At time of purchase,a demand subsidy of US$5,130 is available for locally produced passenger EVs built from at least 40%local materials.-Luxury tax.EVs are exempt from luxury tax,while ICE vehicles are taxed between 15%-40%.-Tran

227、sfer and circulation tax.Transfer and circulation tax on EVs is 0%,depending on local regulations,from the original ceiling of 12%and 2%,respectively,for ICEs.In addition,Indonesias government is offering between five and 20 years of CIT exemption on investment values starting at US$7.2 million and

228、up to US$2.1 billion,along with two years of tax reduction.Up to 300%of costs incurred from R&D can also be deducted from CIT.Exemption of import duty of goods and material for two years during construction and up to four years during initial production,if locally produced machines account to 30%of

229、the investment value,is also available.Overall,the Indonesian government has implemented a mix of demand-side and supply-side policies to encourage the EV market.Figure 27.Average financial subsidies at purchaseSource:Arthur D.LittleSource:Arthur D.LittleFigure 27.Average financial subsidies at purc

230、hase20,3601,1575,51711,5336607,5004,8033,6556741,9537255,130NorwayGermanyJapanUKSingaporeChinaUSUAEThailandMexicoIndiaBrazilIndonesiaVietnamSouth Africa000USD4 7Governments around the world have initiated another policy-related announcement to bring much-needed clarity to the business community enfo

231、rcing the end of fossil fuel engines.Starting in 2025,Norway will be first country to ban ICE passenger cars.Other markets have made similar announcement(see Figure 28).Indonesia has not announced a ban on ICE car sales,and expectations of a ban are not realistic.The automotive industry,currently mo

232、stly ICE vehicles,is a source of 1.5 million direct labor and 4.5 million indirect labor jobs and contributes 4%GDP,along with 7%of Indonesias total non-oil and gas exports.Given its relative importance and with the EV market still developing,the policy is unlikely to be implemented.Alternatively,th

233、e Indonesian government should consider operational incentives for EVs to subsidize the cost of EV charging,along with reduced tolls,subsidized parking prices,exclusive parking,and dedicated lane for EVs.A ceiling rate of US$0.16/kWh has been put in place with the government planning to introduce a

234、similar ceiling rate for fast chargers and ultra-fast chargers at US$1.50/kWh and US$4.50/kWh,respectively,which is a welcome effort.However,the focus should be on increasing the charging spread and making the network more equitable.Furthermore,policies encouraging use of repower and integrating it

235、with battery backup in charging infrastructure can also be considered.REGIONAL BENCHMARKSAmong its SEA peers,Indonesia ranks 10th and falls under the category of Emerging EV Markets.Thailand ranks eighth,Singapore is classified as an Ambitious Follower,and Vietnam is positioned as a Starter in 12th

236、place.The case of Singapore:EV sales boom with new governmental measuresSingapore is well positioned to accelerate EV adoption,driven by favorable factors,including strong regulatory support,developed public charging infrastructure,and high customer readiness:-The regulatory perspective.The Singapor

237、ean government has set clear targets for EV adoption,aiming for all vehicles on the road to run on clean energy by 2040.It has progressive financial policies,such as the Vehicular Emissions Scheme and EV Early Adopter Incentive,which provides tax rebates of up to US$15,000.However,these incentives a

238、re quite marginal.But Singapores high per capita income limits the need for extensive demand subsidies.-The charging infrastructure perspective.Singapore is actively developing its charging infrastructure to support the growing number of EVs.The goal is to deploy 60K charging points at public car pa

239、rks and private premises by 2030,exceeding the previous target of 28K chargers.This ambitious plan aims to facilitate a rapid 40%year-on-year growth in EV sales.Source:Arthur D.LittleFigure 28.Official communicated plans to phase out ICE car salesSource:Arthur D.LittleFigure 28.Official communicated

240、 plans to phase out ICE car sales2025 year announced for ICE phaseout2030 year announced for ICE phaseout 2035 year announced for ICE phaseout 2040 year announced for ICE phaseout Surveyed but no plans announced4 8REPORT:UNLEASHING INDONESIAS ELECTRIC MOBILIT Y POTENTIALARTHUR D.LITTLE-The customer-

241、readiness perspective.With a strong economy(an estimated per capita GDP of US$82,794)and almost 100%urbanization,Singaporean customers are financially capable and less concerned about driving-range limitations.They are willing to pay a premium price for EVs,recognizing the numerous advantages they o

242、ffer.The case of Thailand:Strong stakeholder engagement drives EV adoptionThailand has witnessed the flourishing of its EV industry,driven by favorable factors,including high customer readiness,strong regulatory push,and consistent efforts to develop charging infrastructure:-The customer-readiness p

243、erspective.Approximately 40%of the Thai population expressed interest in EVs,driven by attractive financial incentives.-The regulatory perspective.The National EV Policy Committee set a roadmap(2021-2035)to establish a well-developed EV supply chain,aiming for a 30%production target of zero-emission

244、 vehicles(ZEVs)by 2030.To attract EV manufacturers,the Board of Investment of Thailand offers benefits such as zero import duties and CIT exemptions.The government also provides incentives for consumers,including reduced import duties,excise tax cuts,and subsidies for passenger cars.-The charging in

245、frastructure perspective.The government actively promotes the installation of charging stations,with a goal of having stations within a maximum 50-70 km radius.EV charging operators can enjoy a five-year CIT exemption by building at least 40 chargers nationwide,further supporting e-mobility and EV i

246、nfrastructure.The case of Vietnam:A strong automotive foundation spurring a shift toward EVsDue to its limited high-tech manufacturing capability,Vietnams EV market is growing sluggishly even though it was the first SEA country to host an EV manufacturing company.A few factors contribute to this:-Th

247、e charging infrastructure perspective.The government is making efforts to install charging stations within a 50-70 km radius and offering a five-year CIT exemption for EV charging operators that build at least 40 chargers nationwide.However,the dominance of VinFast left limited new entrants to speed

248、 up development.-The regulatory perspective.The country still lacks management regulations on the design,installation,operation,and measurement of charging stations,despite several favorable policies,such as exempting registration fees and reducing excise taxes.As the government welcomes private pla

249、yers like Kia,Mercedes-Benz,and Toyota,additional measurement management for chargers is needed to make them compatible with regional and international ones.-The customer-readiness perspective.Despite Vietnams tech-savvy population,with its smartphone penetration rate of 73%,the high cost of EVs and

250、 slow charging infrastructure development have hindered their adoption,compared to other regional countries.CHAPTER SUMMARYIndonesia is classified as an Emerging EV Market,based on its score on ADLs GEMRIX.This classification has implications for both OEMs and infrastructure providers.OEMs need to u

251、tilize special planning methods and viable market-entry strategies.A focus should also be on developing the entire EV ecosystem:upstream supply chain,components,and charging infrastructure.Infrastructure players in starter markets should avoid copy-and-paste strategies from early EV markets such as

252、Norway and not rely on the rollout of wide AC networks in public space.Today,battery packs are bigger,EV shares are higher,and customers in many developing markets require public charging because they lack private parking and charging possibilities:leapfrogging to quicker DC charging solutions and o

253、ffering charging parks in fuel stations should be prioritized to avoid additional investments at a later date.4 95.INDONESIA S E V E VOLUTION&RE ALIZING THE E V DRE AMThe Indonesian government has ambitious plans to unleash the EV revolution,with bold intentions to launch 600K e4Ws and 2.45 million

254、e2Ws by 2030.ADL has analyzed Indonesias EV market,looking to understand the current situation and presenting market movements and regulatory analysis.This process also highlighted a few challenges.ADL looks at the market development,regulatory factors,and challenges to assess the overall offtake in

255、 the EV market by 2030.Our assessment reveals that Indonesia would fall short of its target for both e4W and e2W,as we expect only 81K e4Ws and 2.0 million e2Ws(see Figure 29).Our analysis is based on current market movements and regulatory policies.Subsequently,ADL provides some key recommendations

256、 for the Indonesian government to consider.The final chapter in this Report assesses the projected growth in Indonesias EV sector and explores some of the key factors explaining the growth trend as well as implications for the government to consider in terms of areas to focus in order to realize its

257、 dream of unleashing the EV dream.ADL EV ASSESSMENTSales of EV in Indonesia are expected to increase from 21K units in 2022 to about 81K units by 2030(see Figure 30).The forecast for e2Ws reveals eventual sales of 2 million by 2030.When compared to the target set by the Ministry of Industry,we find

258、a shortfall of nearly 1 million units for both e4Ws and e2Ws.The shortfall for e2Ws is less,due to a strong push from homegrown brands,Japanese OEMs,and Chinese OEMs.The price gap with e2Ws over ICEs is less steep,making it easier to overcome TCO considerations.Success in this vehicle category is cl

259、osely tied to how innovatively e2W OEMs introduce vehicles with different ownership models,exchange programs,assured buyback,private leases,and deals with financial institutions to make buying and owning e2Ws more accessible.The expected shortfall of 519K e4Ws is expected,as stiff resistance would c

260、ome from incumbent OEMs.Source:Arthur D.Little,Ministry of Industry IndonesiaFigure 29.ADLs assessment of Indonesias EV targetSource:Arthur D.Little,Ministry of Industry IndonesiaFigure 29.ADLs assessment of Indonesias EV targetSales unit in thousands,2030Sales unit in thousands,20302,450e2We4W600e4

261、W2,00081e2WADL assessment of EV target Indonesian government EV target 5 0REPORT:UNLEASHING INDONESIAS ELECTRIC MOBILIT Y POTENTIALARTHUR D.LITTLEFACTORS PROMOTING EV ADOPTIONADL has identified some unique factors to indicate that the long-term potential of EVs in Indonesia is sound,despite the stro

262、ng possibility that the government could fall short of its targets.These factors include:-Favorable LIB reserves.Indonesias vast nickel reserves provide a strategic advantage in securing nickel,one of the key minerals used to produce the NMC-based cell.The estimated amount of nickel in a battery is

263、about 10%.Moreover,Indonesias strategic location and favorable relations with nearby countries Australia,the Philippines,India,and China offer an advantage in LIB material sourcing.ADL believes localized cell and battery production may contribute to a 10%-12%reduction in vehicle costs,which may boos

264、t their affordability by lowering the initial acquisition cost.A 5%reduction in EV price compared to ICE can shrink the minimum distance for TCO parity from 84 km to 53 km.-Strong demand base.Indonesia is the fourth most populous country in the world,with per capita income of US$4,783 in 2022.Given

265、forecasts from the World Bank,Indonesias per capita income is expected to grow to US$6,748 by 2027,which would make an EV purchase more financially accessible(see Figure 31).The rise of an affluent middle class who would be more sensitive to environmental degradation and pollution may also result in

266、 increased EV sales.Higher income and an assumed price decrease of 10%,thanks to localized cell production,would bring down the equated monthly installment of a typical EV(e.g.,Wuling Air EV)by$238,accounting for a 60%share of average monthly income to 38%by 2027,resulting in higher EV penetration.-

267、Inexpensive electricity costs.Indonesias electricity cost is US$0.07/kWh(see Figure 32).The price of petroleum is US$0.9/L,making Indonesia a country with some of the lowest electricity costs in the region.This gives future EV users an economic benefit to consider,as about 20%of a vehicles total lif

268、ecycle cost is attributed to operational costs.For a typical charging infrastructure operator,the cost of electricity is roughly a 30%share of total operating expenses;the lower cost in Indonesia would allow charging infrastructure players to offer more attractive rates to end consumers.xEV=non-BEV

269、powertrain:hybrids,mild hybrids,plug-in hybridsSource:Arthur D.LittleFigure 30.Powertrain mix by vehicle segments xEV=non-BEV powertrain:hybrids,mild hybrids,plug-in hybridsSource:Arthur D.LittleFigure 30.Powertrain mix by vehicle segments 4W2WEV10 xEV1%2022ICE95%ICE98%EV3%xEV2%1,058203020256%(81)IC

270、ExEV18%ICE76%xEV9581,250Sales percentage(%)and units(thousands)EV0%Non-EV100%Non-EV78%EV2%2022EV22%Non-EV98%20252030Non-EVEV5,2216,3978,971Sales percentage(%)and units(thousands)5 1RECOMMENDED SOLUTIONS TO ACHIEVE EV TARGETADL has identified some key issues that Indonesia must rectify to achieve its

271、 ambitious goals:1.Prioritize targeting new OEMs.Indonesias automotive sector depends heavily on mass-market Japanese OEMs Toyota,Daihatsu,and Honda that are keen to develop alternate powertrains,such as biofuel,hybrid,and hydrogen fuel.Other Japanese OEMs like Nissan and Mitsubishi have recently be

272、come more proactive in the EV sector.Nissan was the first player to launch a mass-market EV,and Mitsubishi has also been at the forefront of this technology since 2009.As a result of this trend,Indonesia needs to expand its focus and target other Japanese,Chinese,and Indian OEMs and startups.China h

273、as emerged as a key strategic partner for Indonesia,given the recent movements by Chinese OEMs.MG Motor,BYD,GWM,and Chery are considering both Indonesia and Thailand as key markets.Established Indian OEMs Tata and M&M were unable to overcome the strong influence Japans OEMs have on ICE sales and cap

274、italize on the SEA market.However,the rise of EVs will set a new greenfield level and make opportunities for Indian OEMs to establish themselves.2.Expand scope of supply-side incentives for charging infrastructure.The Indonesian government has committed to installing charging stations at 195 locatio

275、ns,with a tariff ceiling of US$0.16/kWh and a capped service fee for fast chargers and ultra-fast chargers.However,no incentive exists for charging equipment manufacturers or charging station operators.Both Thailand and India have provided incentives,such as CIT exemptions for charging infrastructur

276、e operators and Source:Arthur D.Little,Statista,World BankFigure 31.Indonesias GDP per capita,20222027Source:Arthur D.Little,GlobalPetrolPFigure 32.Commercial cost of electricity,2022Source:Arthur D.Little,Statista,World BankFigure 31.Indonesias GDP per capita,20222027USD 4,7835,1045,4885,8906,3066,

277、748202320222024202520262027+7%Source:Arthur D.Little,GlobalPetrolPFigure 32.Commercial cost of electricity,2022USD/kWh0.110.100.070.070.05The PhilippinesThailandVietnamMalaysiaIndonesia5 2REPORT:UNLEASHING INDONESIAS ELECTRIC MOBILIT Y POTENTIALARTHUR D.LITTLElow-cost capital plans for the deploymen

278、t of charging infrastructure.Recently,India even provided tax relief to charging station operators by reducing the goods and services tax for electricity from 18%to 5%.Markets in Europe,such as Austria and Italy,have provided direct funding and grants for charging stations.Indonesia should consider

279、similarly broadening its incentives to boost its charging network.These incentives would encourage relevant players to consider rolling out much-needed charging infrastructure.Reducing expenditures would have a pass-through effect on consumers and create a sustainable commercial model to boost EV ad

280、option.3.Initiate regional cooperation to encourage investment in upstream activities.Indonesia can address the challenge of underdeveloped high-grade class 1 nickel production in the country by initiating regional cooperation and attracting investment in upstream activities.This can be achieved by

281、partnering with international stakeholders and neighboring countries with expertise in HPAL technology and class 1 nickel processing.Collaborative efforts can include knowledge sharing,technology transfers,and JVs to establish HPAL facilities in Indonesia to produce high-grade nickel suitable for ce

282、ll manufacturing.This will require an attractive investment environment that offers incentives,streamlines regulations,and provides financial support for constructing and operating HPAL plants.By developing a robust class 1 nickel production capacity,Indonesia can secure a sustainable supply of high

283、-quality nickel for the growing EV industry and position itself as a key player in the global battery market.4.Diversify battery production to include LFP.Given the potential competition posed by LFP batteries to NMC batteries,Indonesia should diversify its battery production to include LFP batterie

284、s.This will enable Indonesia to take advantage of the benefits of LFP batteries,such as longer cell lifespan,higher safety levels,greater temperature tolerance,and lower supply chain risks.Indonesia can mitigate the disadvantage of lower energy density and leverage its abundant iron and phosphate re

285、sources by focusing on fast and ultra-fast charge technology and improving LFP-based cell chemistry.IBC can develop this capability by entering into technology-transfer agreements with different cell suppliers.For example,Eve Energy has announced plans to set up a facility in Malaysia,while Gotion i

286、s collaborating with Arun Plus.IBC can find a similar technology partner that already has LFP-based technology.This strategic move will not only support the development of Indonesias EV industry,but will also protect against the potential impact of changing market dynamics.5.Approach local productio

287、n strategically.Indonesia should encourage a local EV production base through a focused approach rather than simply imposing local content regulation.At present,Indonesias local EV production remains underdeveloped due to high CAPEX of US$150-$200 million,as well as the underdeveloped local supply c

288、hain for key components,including air compressors,motors,controllers,and so on.The government must consider inviting overseas EV component producers to set up local facilities in Indonesia to commence local knowledge sharing.In addition,the government must examine the challenges faced by EV OEMs whi

289、le sourcing common ICE-based parts.Indonesian suppliers are not committing to supplying volume to low-volume EV manufacturers,resulting in many OEMs being unable to meet local content requirements.The Indonesian government can consider more targeted duty exemptions for selected EV components in the

290、short term.Moreover,for certain incentives with respect to corporate tax exemptions,Indonesians threshold investment exemption is US$7 million and over,which may result in more small-scale development.The minimum threshold investment can be raised,which signals major players to consider entry and th

291、ereby create a financial barrier.In addition to the aforementioned solutions,ADL has also devised a set of additional supplementary measures Indonesia can implement to promote local EV production and emerge on top:-Promote customer awareness.To accelerate EV adoption,changing customer behavior is pa

292、ramount.Customer awareness will influence this change.Based on ADLs survey,customers lack knowledge of EVs,their safety,their environmental impact,and ease of charging.Education can incentivize EV adoption.Approaches to encourage customers include EV conferences,awareness campaigns,and 5 3marketing

293、initiatives.For Indonesia,EV-related education could be accomplished at the mass media level using key opinion leaders and politicians,given its large mass appeal and similar strategies other emerging countries have pursued.-Streamline demand subsidies and other direct expenses for consumer.Chapter

294、4 showed the impact of fiscal subsidies on end consumers and their significant impact in driving EV adoption.Indonesia offers subsidies for e4Ws and e2Ws.However,based on a comparative analysis of key countries,the coverage of the incentive is marginal.This results in a lower reduction in up-front c

295、osts.Other costs to the end user should also be streamlined.For example,financing an EV purchase is more expensive than an ICE vehicle.Down payments for EVs are higher than for ICE vehicles.Although the difference in disbursed amounts between ICE and EV models is only 5%,the overall cost of the EV i

296、s slightly higher,resulting in an outlay between US$2,000-$2,500.This cost difference creates a barrier for customers considering EVs,as it increases the up-front expenses.Financiers are charging higher interest rates given the risks attached to battery replacement.At swapping stations,operators are

297、 charging a swapping subscription fee that is higher than monthly fuel expenses,resulting in limited savings for the user.The Indonesian government must focus on front-loading subsidies in a time-bound manner so it is able to bring about modest reductions in vehicle prices,at least so they are at co

298、mparable levels to peer countries.OEMs should also be encouraged to provide warranties similar to or higher than loan tenors of EVs so that interest rates are comparable.Lastly,subscription costs for swapping stations should be brought lower than ICE fuel expenses by jointly identifying new revenue

299、streams with battery-swapping operators or lowering cost through reduced electricity prices,subsidized land for swapping infrastructure,and reduced rentals.-After-sales service.After-sales service for EVs are different from ICEs,as there are fewer moving parts and more electronics in the vehicle.Cur

300、rently,after-sales service workers are trained to perform basic maintenance and service for ICE vehicles only,but EV workers need to be trained to address batteries,BMS,telematic systems,and remote diagnostics,making re-skilling workers critical.To minimize the disruption from EVs and mitigate the t

301、hreat of job loss for workers in traditional maintenance and service industry jobs,the Indonesian government should initiate a re-skilling initiative.For example,Thailands Career for the Future Academy,backed by the National Science and Technology Development Agency,is considering a re-skilling prog

302、ram for service executives at dealerships.Developing a national training and certification program is essential for workers to acquire necessary skills and empower themselves.-Smart energy management services.Grid planning needs to be considered,as load from EVs on the grid may become a problem.Indo

303、nesia needs to consider the maximum load level for lines that connect to the EV charging stations to allow fast recharging.Furthermore,maximum load conditions must be limited,total and individual loading level has to be balanced,and local power management needs to be established.Indonesia can also b

304、enefit through new business opportunities if the energy used is from a renewable source,and EV batteries can act as energy storage to support the grid in the future if needed.Therefore,smart energy management will promote the development of EV infrastructures and promote EVs as a whole.5 4REPORT:UNL

305、EASHING INDONESIAS ELECTRIC MOBILIT Y POTENTIALARTHUR D.LITTLEEvery major automaker must accept the reality of electrification.However,customer behavior,new regulations,market incumbents,and supply chain conditions make each market unique.Such factors play out in the real world,offering fundamental

306、challenges and igniting issues that stakeholders must overcome to achieve the goal of Indonesia as a global EV hub.Overall,we believe Indonesia is well positioned to tackle these challenges and achieve the EV commitments it needs,provided it focuses on the challenges identified and develops targeted

307、 solutions.These criteria need to be fulfilled for Indonesia to realize its EV dream and emerge as an industry powerhouse across Southeast Asia,developing countries,and around the globe.CONCLUSION5 5Arthur D.Little has been at the forefront of innovation since 1886.We are an acknowledged thought lea

308、der in linking strategy,innovation and transformation in technology-intensive and converging industries.We navigate our clients through changing business ecosystems to uncover new growth opportunities.We enable our clients to build innovation capabilities and transform their organizations.Our consul

309、tants have strong practical industry experience combined with excellent knowledge of key trends and dynamics.ADL is present in the most important business centers around the world.We are proud to serve most of the Fortune 1000 companies,in addition to other leading firms and public sector organizations.For further information,please visit .Copyright Arthur D.Little 2023.All rights reserved.