Friday 15 December 2023

Looking to an Emission-Free Future, This is Indonesia`s Timeline towards the Era of Electric Vehicle or EV Manufacturers


The transportation sector is one of the main sources of carbon emissions in Indonesia. Indonesia’s recorded carbon emissions in 2020 reached 280 million tons of CO2e. This figure could reach 860 million tonnes of CO2e per year in 2060, so vehicle electrification must be carried out.

The most crucial benefit of the transformation and electrification of the transportation sector is reducing the negative impact of greenhouse gas emissions to support the fulfillment of the commitment to zero carbon emissions or Net Zero Emission (NZE) with the declaration of Indonesia’s NZE 2060. Thus, better environmental quality for generations in the future can be realized.

Quoted from the Antara news agency, Indonesia, as one of the countries that has large nickel reserves, namely 21 million tons or 30 percent of world reserves, has the potential to become a strategic player in the world’s lithium battery industry.

A number of electric car drivers wait to recharge their electric batteries at the Electric Vehicle Battery Fast Charging Station in the Puspiptek Serpong area, South Tangerang, Banten. As an illustration [ANTARA FOTO/Muhammad Iqbal/aww]. Indonesia is committed to building a battery and electric vehicle ecosystem in its own country. Starting from upstream to downstream from mining, refining, processing, battery and electric vehicle production, to battery recycling.

By 2030, the domestic automotive industry is targeted to be able to produce 9 million units of two- and three-wheeled electric motorbikes, as well as 600 thousand units of electric cars and buses.

The target is expected to contribute to reducing fuel oil (BBM) consumption by 21.65 million barrels or the equivalent of reducing CO2 emissions by 7.9 million tons in total.

To realize the production of Electric Vehicles (EV), the Government issued an incentive policy for purchasing Battery-Based Electric Motorized Vehicles or KBLBB of IDR 7 million per unit for the purchase of 200,000 new electric motorbikes.

As well as IDR 7 million per unit for the conversion of 50,000 units of conventional fossil fuel motorbikes into electric vehicles which will take effect from March 20 2023.

Providing subsidies and incentives is the government’s way of supporting the development of the KBLBB industrial ecosystem in order to encourage mass adoption of vehicle use electricity.

The electric vehicle ecosystem itself is a strategic sector that has great potential to support sustainable development, accelerate innovation and accelerate decarbonization in Indonesia.

For four-wheeled electric vehicles and buses, the incentive given is in the form of Government Borne Value Added Tax (VAT DTP) which is valid April-December 2023. Rules:

Electric cars and electric buses with a TKDN value of at least 40 percent will be given a VAT incentive of 10 percent. Electric cars and electric buses with a TKDN of 20-40 percent are given a VAT incentive of 5 percent. Certain Bus Battery-Based Electric Motorized Vehicles Covered by the Government for Fiscal Year 2023 (PMK VAT DTP for Electric Vehicles).

Unfortunately, if you look at the distribution of assistance to purchase electric motorbikes, it was recorded that it was very low during March-August 2023.

As of early June 2023, or four months after the assistance program was launched, the realization of purchasing new electric motorbikes was 637 units with the status of four units being has been distributed.

The low distribution is thought to have occurred because the conditions for recipients of two-wheeled electric vehicle subsidy assistance are very strict. Namely only for Micro, Small, Medium Enterprises or MSMEs, People’s Business Credit (KUR) recipients, Micro Business Productive Banpres (BPUM) recipients, as well as electricity customers in the 450 watt to 900 watt category.

Through Minister of Industry Regulation (Permenperin) Number 21 of 2023 concerning Amendments to Minister of Industry Regulation No. 6 of 2023 concerning Guidelines for Providing Government Assistance for Purchasing Two-Wheeled Battery-Based Electric Motor Vehicles (KBLBB), the government has also expanded the scope of recipients of electric vehicle subsidy assistance.

With the issuance of this regulation, the public can easily get an assistance program to purchase one electric motorbike with the condition of one NIK (Residential Identification Number) or KTP.

This incentive assistance is considered to help increase Indonesia’s competitiveness in attracting investment in the electric vehicle sector. With the entry of investments and producers in the EV sector into the country, the electric vehicle ecosystem will continue to develop and prices will become more competitive, making them more affordable for the public.

Based on the Two-Wheeled Motorized Vehicle Purchase Assistance Information System page as of Thursday (14/12/2023), 8,683 electric motorbikes have been distributed.

For electric cars, although there is no detailed data regarding the achievement of incentive distribution, the Association of Indonesian Automotive Industries (Gaikindo) recorded sales of battery electric vehicles (BEV) in January-October 2023 reaching 11,896 units.

This number has increased quite significantly compared to total sales throughout

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