To do so, the International Energy Agency (IEA) recommends that at least 60 percent of the global road fleet run on electric vehicles (EV) by 2030. As of 2019, one-fifth of the world's road vehicles are in ASEAN, according to our estimate.

EVs are similar in many aspects to conventional transportation that is powered by internal combustion engines, but they are much more energy-efficient and emit zero emissions. The latter proposition, though, needs to be further examined. Indonesia, which has a 60 percent share of total road vehicles in ASEAN, will be the perfect case.

In 2019, President Joko "Jokowi" Widodo issued Presidential Decree No. 55/2019 as the framework for accelerating battery-powered EV deployment. Following this, the Energy and Mineral Resources Ministry launched a road map of EV infrastructure development. The road map includes various supporting factors for the EV ecosystem such as the number of charging stations, electrification of government vehicles and e-mobility. Further, Industry Ministerial Regulation No. 27/2020 stipulates the minimum domestic content of EVs manufactured in Indonesia. This regulation provides a strong foundation for the national industry to become the leading manufacturer of EVs and their components.

The policies above indicate that Indonesia believes in the significant potential of EVs in reducing carbon emissions. The EV industry itself, however, should not forget to foresee the sustainability aspects of electric mobility. From that perspective, the “zero-emissions” tag of EVs should also consider the carbon emissions from the whole lifecycle of EVs, including electricity generation, the manufacturing of components and management of components in their end-of-life.

Starting from electricity generation, Indonesia has set a target of increasing the share of renewable energy in its energy system, including electricity generation, albeit with apparent challenges in implementation. It is reassuring that several studies that made a comprehensive comparison between various mobility options through well-to-wheel assessment found that EVs are still competitive. Meaning that in terms of overall emission, EVs are still better than the conventional option, even in regions with a large coal share in electricity generation. 

With the outlook of the Indonesian EV market being seemingly positive, the government must ensure a continuous supply of raw materials of EV lithium-ion batteries – nickel, cobalt and copper. According to the Investment Ministry, Indonesia has 30 percent of the world’s nickel reserves of 21 million tons, mainly located on the islands of Sulawesi and Halmahera. Securing supply is an essential strategy to mitigate supply shortage problems, which might lead to uncontrollable price hikes.

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