Electric vehicle is increasingly popular in many regions including in the world's fourth most populous country, Indonesia. Motorcycles and other two wheeler vehicles are in demand in this country. Recently there has been a growing demand for Indonesia electric two wheeler market.
According to a leading market research firm, GMI Research, Indonesia electric two wheeler market size would see substantial increase in the years ahead. This rapid growth is owing to the surging demand for electric vehicles along with the rising environmental concerns among the consumers.
Indonesia shows promising growth potential as an electric vehicles market. It has an estimated total size exceeding USD 20 billion despite low current adoption rates.
The Indonesia Electric Two-Wheeler Market in the world, China and India, have adopted EVs at a faster pace than Indonesia.
This highlights substantial opportunities for growth in electric vehicles adoption in the country, while emphasizing the nation’s broader significance in global EV production.
With increasing global demand, Indonesia which is known for its motorbike culture and abundant raw materials such as nickel, is well-positioned to establish itself as an EV motorbike manufacturing leader. To accomplish this objective, the focus should be on three critical elements. That includes in-house research, building local supply chains, and developing a forward-looking regulatory framework.
Motorbike users in Indonesia exhibit unique behaviors that require special attention when developing products to encourage the adoption of EVs. Merely reducing total ownership costs is not adequate. The product must also be on par with the driving experience and pricing of current gasoline motorcycles.
Drivers in Indonesia are constantly watchful, expecting chaotic road situations and obstacles more than in developed markets. It requires an EV motorbike that matches the reliability of their gas-powered vehicles. In big cities such as Jakarta, drivers cover much longer distances in comparison to India and China. At least 100 kilometers of driving range on a one-time charge is necessary for them to adopt EVs comfortably without experiencing the range anxiety.
Beyond cost efficiency, the push for localized supply chains is about fostering a resilient and flexible business structure. McKinsey’s research indicates that 22 percent of senior executives in supply chain in the automotive industry are prioritizing localization efforts. In Indonesia’s scenario, a local supply chain decreases reliance on foreign parts. It also shortens logistic delays and fosters employment opportunities. As supply chains diversify globally particularly after the pandemic, the designation “Made in Indonesia” could emerge as a valuable advantage in the global market.
It is crucial to shift regulatory focus, as progressive frameworks will be key to fostering entrepreneurship and innovation in the EV sector. Staying ahead of trends requires regulators to create an environment that fosters research and development while enables new businesses to enter the market.
Establishing a robust EV ecosystem necessitates steadfast dedication to innovation and the ownership of proprietary intellectual property. Even if it means sacrificing immediate profitability and extending time to market.
The development of Indonesia electric two wheeler market is clear yet challenging. Leveraging abundant resources, a skilled and enthusiastic workforce, along with a large local market, Indonesia stands poised to dominate this sector.