According to PwC’s latest ASEAN-6 Electric Vehicle Readiness Survey 2025, Indonesia’s EV market grew 49 percent this year, making up 18 percent of all new vehicle sales in 2025. The figure is slightly above the regional average of 17 percent.

Meanwhile, overall light vehicle sales in Indonesia have dropped 11 percent, highlighting a clear shift in consumer preference toward electric mobility.

Across Southeast Asia, including Malaysia, Thailand, the Philippines, Vietnam and Singapore, the overall automotive market is relatively stable, with just a slight dip in light vehicle sales.

However, EVs in the region saw a sharp increase of 62 percent, driven largely by exceptional growth in Malaysia (74 percent), the Philippines (656 percent) and Vietnam (84 percent), all of which far outpaced Indonesia’s solid but more moderate 49 percent increase.

This shift reflects strong policy support, local EV initiatives and the growing presence of Chinese manufacturers challenging traditional Japanese, Korean and European brands.

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Vietnam and Singapore showed positive growth in vehicle sales at 18 percent and 25 percent, respectively, supported by strong government incentives and registration policies.

By contrast, Indonesia’s decline in overall sales, affected by higher luxury taxes, budget cuts and a weaker rupiah, show how government policies and economic factors influence market trends.

Why are EVs winning domestically?

While conventional car sales are shrinking, electrification is moving forward strongly. In Indonesia, the momentum is fueled by rising government incentives, which boosts affordability. Combined with plans for a domestic battery ecosystem, these factors are helping EVs gain ground even as the broader market contracts.

This trend mirrors a broader regional race toward EVs, which is fueled by tax incentives, investments in battery production and growing consumer demand for environmentally friendly transport.

Thailand and Vietnam are even further ahead in this race, boasting EV adoption rates of 30 percent and 33 percent, respectively. In both countries, the rise in EV adoption rates is sustained by strong policy support and infrastructure development, which accelerate the shift to electric mobility.

Growing interest, real concerns

EV ownership is still new in Indonesia. Currently, 14 percent of PwC survey respondents own an EV, with 70 percent saying they were interested in buying one within the next five years.

Among existing owners, satisfaction is very high at 99 percent, the highest in ASEAN, with key benefits including faster charging times, lower operating costs and better battery life.

However, challenges still remain, as around a third of owners are still considering returning to conventional cars due to concerns about higher maintenance costs, disappointing driving experiences and “range anxiety”: the fear of running out of battery power before reaching a charging station.

At the same time, price remains a key hurdle.

Almost half of ASEAN consumers want EVs priced below US$46,000, and 15 percent even expect entry-level models priced under $11,000. Indonesian buyers mostly favor medium-sized cars, signaling an opportunity for manufacturers to meet this demand.

Interest in used EVs is growing in Indonesia, but remains below the ASEAN average. The development of a healthy secondhand EV market could further reduce cost barriers and encourage more customers to switch to electric vehicles.

Incentives and infrastructure gaps

Indonesia leads ASEAN with the strongest government incentives, scoring 4.0 out of 5. These include full luxury tax exemptions until 2025 and reduced import duties, helping to make EVs more affordable.

Overall, the country’s overall EV readiness improved to 2.8 in 2025, up from 2.0 last year.

Yet infrastructure remains a serious challenge, as reflected in Indonesia’s low score for charging facilities at 1.4, far behind Singapore’s 4.3. Battery supply chains are also underdeveloped at 2.3, lagging behind Vietnam’s 3.0.

In addition, 70 percent of Indonesian EV owners charge their vehicles at home due to a lack of public fast charging stations. This makes expanding charging networks critical to reduce range anxiety and support adoption.

ASEAN competition and outlook

Regionally, Indonesia is in the middle in terms of EV readiness. Singapore ranks second worldwide after Norway, but the Philippines trails behind. Vietnam and Thailand are moving fastest, backed by strong policies and battery manufacturing investments.

Indonesia’s large market offers unique advantages if infrastructure and supply chains improve. Investors and industry leaders are watching closely: The coming two years will be crucial in determining Indonesia’s role as a leader or follower in regional electrification.

Consumer confidence and sustainability

Education is key. Many skeptical consumers worry about battery durability and charging time. Clear and transparent information, warranties and after-sales services can help.

Innovative financing models such as leasing schemes, where consumers pay a monthly fee instead of buying the car outright, and battery-as-a-service, which allows drivers to subscribe to battery usage rather than owning it, could make EVs more accessible.

Environmentally, EVs offer solutions for Indonesia’s growing pollution and carbon emissions problems. But the promise depends on clean energy powering EVs, or emissions will simply move from tailpipes to power plants. Connecting EV adoption with renewable energy development is vital.

The Indonesian EV market is no longer niche: It is now reshaping the automotive industry and offering opportunities for growth, innovation and sustainability.

With strong government support and private sector collaboration, Indonesia can become a regional leader in EV adoption, benefiting the economy, environment and people alike.

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