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Technology, regulation key to driving xEV adoption in Indonesia: Seminar
A seminar on electric vehicles (EVs) says that while feasible, Indonesia still has a long way to go before it can enter the EV global market.
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A worker polishes a windshield on the assembly line of the Baojun E200 electric vehicle (EV) at the SAIC-GM-Wuling plant in Qingdao, Shandong province, China. (Reuters/Stringer)
T
echnological mastery and regulatory incentives were needed to drive consumer adoption of electrified vehicles (xEVs) and support President Joko "Jokowi" Widodo’s commitment to turn the country into an xEV industry hub.
Associate partner Rahul Gupta of McKinsey & Company said that the current total cost of ownership (TCO) for xEVs in Indonesia was higher than the TCO for internal combustion engine (ICE) vehicles due to the government's fuel subsidy, which made electrified vehicles less competitive than ICE vehicles.
"Significant reduction in battery costs will drive down the ownership cost of xEVs and will make it more competitive against ICE [vehicles]," Gupta said in his presentation on Tuesday at a seminar on xEVs in Jakarta.
"Regulatory support is instrumental to triggering xEV adoption in a country," he added, citing Norway as an example.
Electrified vehicles made up 48.4 percent of all new cars sold in Norway in the first six months of 2019, up from 31.2 percent in the same period last year, according to Reuters.
Norway has taken several measures to boost xEV adoption, such as exempting battery-powered cars from the heavy taxes imposed on fossil fuel vehicles and offering discounted road tolls.
Gupta said that other market drivers included consumer acceptance of the range and reliability of xEVs, as well as the availability of charging stations and vehicle supply.
