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Battery subscription scheme could remove roadblock to EV adoption
Analysts note that the pricing model slashes the upfront cost of EV ownership for customers but also adds to manufacturers' operational burden.
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A VinFast VF 6 model is pictured on May 15, 2024, at the firm's factory in Hai Phong, Vietnam. VinFast aims to be the first EV carmaker to introduce a battery subscription scheme in Indonesia. (JP/Aditya Hadi)
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battery subscription scheme where electric vehicle (EV) buyers rent the battery in their car for a monthly fee instead of buying it could accelerate EV adoption in Indonesia by bringing down the upfront cost of EVs, analysts say.
It would also allow manufacturers to exercise more control over the battery recycling process.
In the short term, however, EV carmakers must contend with the growing supply and popularity of hybrid vehicles in the country, and in the long term, the benefits of the battery subscription scheme may be diminished as cheap, small EVs make prices less of an obstacle.
In April, Vietnamese EV manufacturer VinFast announced that it would introduce its battery subscription scheme, already implemented in Vietnam, for cars it sells in Indonesia. The mechanism allows the firm to undercut competitors in the initial price tag and to offer customers a battery replacement when the capacity drops below 70 percent.
“This is actually our competitive advantage, as no other EV-makers provide a similar subscription scheme yet in Indonesia. It also increases the affordability of new EVs,” VinFast Indonesia CEO Temmy Wiradjaja said during a press briefing in Hanoi on Thursday.
A battery subscription scheme can reduce the upfront cost of an EV by up to 30 percent and alleviate buyers’ anxiety surrounding battery issues, according to a report from British research firm Cornwall Insight. Aside from that, the mechanism allows EV carmakers to recycle and reuse their old batteries.
As an illustration, VinFast sells its newest model, the VF 3, for 322 million dong (around US$12,600), but the price drops more than 25 percent to 240 million dong if customers opt for the battery subscription scheme. Owners then need to pay between 900,000 and 2 million dong per month, based on the distance the car travels.
