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As Indonesian car sales recover, Fitch notes barriers to EV uptake
Sales of four-wheeled vehicles are expected to rise next year but to remain below prepandemic levels. Demand for electric vehicles, meanwhile, is being held back by pricing and infrastructure issues.
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Traffic moves smoothly during the afternoon rush hour in central Jakarta on Feb. 10 as many people continued to work from home in response to the COVID-19 pandemic. (AFP/BAY ISMOYO)
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ome 900,000 four-wheeled (4W) vehicles are likely to be sold in Indonesia in 2022, Fitch Ratings has said, as the domestic economy continues to recover from the impact of the COVID-19 pandemic.
“4W sales should be driven by growing demand as customer sentiment improves amid easing of the pandemic, supported by supply-chain stability and scalability,” Fitch ratings noted in a press release published on Friday.
While the predicted figure would mark an improvement from the estimated 850,000 such vehicles sold in 2021, it would still be well below prepandemic levels. Some 1 million 4W vehicles were sold in 2019.
The US-based credit rating agency also forecast that electric vehicle (EV) sales would “remain subdued” because of higher prices and a lack of infrastructure.
“The exemption of EVs from the country’s new emission-based vehicle luxury tax is not likely to propel EV sales due to persistent affordability issues. There is a large price gap between conventional cars and EVs, the prices of which are more than double, at above Rp 500 million,” the release reads.
The lack of EV charging networks presented another challenge, with only 240 charging stations in Indonesia as of mid-2021. “This pales in comparison with China [and the United States],” Fitch noted, adding that the two countries had tens of thousands of charging stations each and still greater numbers of other charging points.
“Furthermore, Indonesia’s EV policies lag behind those of other markets, despite some regulations aimed at incentivizing uptake,” the credit rating agency said, citing more persuasive policies to win over customers in China and the European Union (EU).
