Green Economy Development in Indonesia Will Be Boosted by Chinese EV Popularity

Chinese EV products in Indonesia are projected to contribute to realizing the green economy development starting in 2022.

A green economy means low carbon, resource-efficient, and socially inclusive. The concept involves a sustainable production process and consumption. It also focuses on the reduction of waste generation.

The Indonesian government has made developing a green economy a priority. Such development requires an assessment of climate change, damage to biodiversity, and environmental pollution. Indonesia focuses on developing green energy and investments to realize a green economy. This is primarily due to the abundance of natural resources that the nation has, especially in the energy sector.

Indonesia has a particularly extensive nickel reserve. It is also rich in cobalt, lithium, and manganese. With abundant resources, Indonesia aims to develop the green energy sector via various investment opportunities.

The Indonesian government plans to expand the green energy sector by producing electric vehicles. They plan to collaborate with old-timers in the field, such as Hyundai Motor Group and LG Energy Solutions, with operations targeted to begin by 2023.

Aside from this, President Jokowi has shared the nation’s intention to build a green industrial area in North Kalimantan, which is expected to be the largest in the world in utilizing green energy to drive the industry.

The Popularity of Chinese EV

Green Economy Development in Indonesia Will Be Boosted by Chinese EV Popularity

The Rising Dominance of Electric Motorcycle

Unlike other continents, the usage of motorbikes in Asia is incredibly high. Asia accounts for more than half of all global motorbike sales. In some countries, it is relatively unusual if a family does not own at least one motorbike.

The main reason for this is that the average disposable income remains low. Cars are therefore not an option for most families. In addition, we are currently facing food and fuel inflation which would add to the cost of owning a vehicle, thereby making owning a motorbike much more ideal.

Sales of electric motorbikes in Asia are expected to grow by three or even four times the current level by the end of this decade. The production of electric motorbikes has been pioneered by newer companies like Gogoro, which introduced battery stations all over Taiwan that would allow drivers to swap their batteries instead of waiting for their vehicle to charge.

Gogoro plans to make such technology available across Taiwan and the rest of Asia. They are doing so by collaborating with Hero in India, Gojek in Indonesia, and DCJ and Yadea in China. The company aims to provide invisible scaffolding for other brands.

Alternative for a City-Friendly Electric Car

The domestic production of electric vehicles has also become part of the G20 Summit. Aside from electric motorbikes, the Chinese company Wuling Motors also started marketing electric cars in Indonesia starting early June. The production itself is done in CIkarang, West Java.

The electric cars produced by Wuling adopt a compact design specifically made for easy use in urban traffic conditions. Prices and further details are still pending and will be released upon other studies and development regarding the market and the product.

Chinese EV Tech and Infrastructure Development

Another brand that has dominated the market and taken on prominent rivals in the electric vehicle sector is the Chinese electric-car manufacturer, Nio. In 2024, Nio plans to start producing high-voltage battery packs. The production will focus on the 800-volt battery packs, which recharge faster than 400-volt ones.

All the 400 employees employed at Nio are focused on researching and developing battery technology. Another Chinese company that plans to use China’s electric vehicle market entirely is the internet giant, Tencent.

The company is collaborating with giants like BMW and other US automakers. The partnership talks have also been done with German and Japanese companies, covering 120 vehicle models.

The Chinese government has provided subsidies that have helped boost the growth of the auto industry in which electric car sales have surged.

The Chinese government has also made it significantly easier for drivers to secure license plates, specifically for cars powered by electricity than gasoline.

Businesses looking to support the renewable sector and help Indonesia realize a green economy can seek further assistance from Cekindo regarding business licensing, import licensing, and other concerns

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Tjhia Edy Tarlesno

Edy is the Legal and Delivery Manager at Cekindo. He focuses on internal and external legal compliance with the laws of the Republic of Indonesia. During his career, he specialized in bankruptcy and insolvency at a law firm and also led a prominent social foundation in Indonesia. He is a sworn advocate at the Indonesian Bar Association, a licensed mediator from the Supreme Court of the Republic of Indonesia, a Certified Legal Auditor from the Indonesian Legal Auditor Association, and a Certified Legal Translator from the University of Indonesia.