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AC Ventures and AEML release top report on Indonesia’s electric vehicle outlook

Published on July 3, 2023

Earlier today, Indonesia’s leading early-stage venture capital firm AC Ventures (ACV) and the Electric Mobility Ecosystem Association (AEML) released the most in-depth and authoritative report to date on Indonesia’s budding electric vehicle sector. The report’s exclusive launch took place at ACV’s headquarters in downtown Jakarta, with a variety of international media, prominent investors, and entrepreneurs, as well as government and institutional stakeholders in attendance.

The report, titled “Indonesia’s Electric Vehicle Outlook: Supercharging Tomorrow’s Mobility,” features a series of high-profile forewords from Indonesia’s Coordinating Minister of Maritime and Investment Affairs Luhut Binsar Pandjaitan, Minister of Industry Agus Gumiwang Kartasasmita, Minister of Transportation Budi Karya Sumadi, and Pertamina New and Renewable Energy CEO Dannif Utojo Danusaputro, who also served as General Chairman of AEML.  

The report reveals a burgeoning market for electric vehicles (EVs) in Indonesia, with a total addressable market already surpassing US$20 billion, despite minimal adoption to date. The study explores and analyzes multiple key topics, including major industry players, infrastructure development, localized production, sales, public sentiment, industry and supply chain dynamics, and policy and regulation, as well as what public and private actors can do to build a more conducive EV economy in ASEAN’s single largest market.

Indonesia has set ambitious renewable energy goals, intending to augment the proportion of renewables to 23% of the country’s energy composition by 2025. This marks a significant rise from the approximately 9% established in mid-2020. The country envisions a broader nationwide energy transition to be completed by 2056. These initiatives are consistent with Indonesia’s obligations under the Paris Agreement to decrease emissions by 29% by 2030 and to attain a net-zero emissions target by 2060 or earlier.

Indonesia’s Electric Vehicle Outlook - Supercharging Tomorrow’s Mobility

The report by ACV and AEML showcases a coalition of vital factors setting the stage for exponential growth in the nation’s EV market. These include a surge in consumer demand, supportive government policies, and advancements in technology that enhance performance while reducing production and ownership costs.

EVs in Indonesia promise 75% greater efficiency and significantly lower operating costs for businesses. This offers the potential for the country’s electric mobility market to grow at a remarkable CAGR of 58.5% until 2030. Further, EVs also have the capacity to substantially reduce the nation’s energy imports, which currently total US$35 billion annually.

Currently, EV motorbikes account for a mere 0.2% of Indonesia’s two-wheeler market. However, the report suggests an opportunity for this to exceed 10% over the next five years, assuming that public and private stakeholders collaborate effectively to nurture a conducive local EV sector.

Encouragingly, considerable capital and resource investments are already in progress. Local brands and venture investors are actively forging deals and strategic partnerships, and the sector has already ushered in global automotive giants such as Hyundai, Honda, Toyota, Mitsubishi, Wuling, and others.

While the Indonesian EV market is still nascent, it presents enormous potential. Entrepreneurs, stakeholders, investors, and policymakers who strategically position themselves today will reap substantial benefits from this burgeoning market in the coming years.

AC Ventures Managing Partner Helen Wong explained, “The report’s revelations about Indonesia’s rapidly evolving electric vehicle market affirm the immense investment opportunity we’re witnessing. At ACV, we’re excited to be at the forefront of this green energy transition, catalyzing sustainable growth. The current surge and trajectory in electric two-wheelers speak to the market’s clear demand and potential for remarkable returns. As a pioneering investment firm in this sector, we’re committed to fostering strategic collaborations to exceed Indonesia’s renewable energy targets, promising a future of reduced emissions and enhanced sustainability.”

AEML General Chairman Dannif Utojo Danusaputro added, “We partner with the government of Indonesia, international organizations, key actors in the EV ecosystem, as well as other associations, to reach out to more people and promote a positive campaign for EVs. Our mission of electrifying mobility in Indonesia is based on a calling to protect the environment by reducing pollution for future generations. AEML is committed to supporting the adoption of EVs and fostering the creation of a globally competitive EV ecosystem. We are proud to release this comprehensive report with AC Ventures.”

Download the full report via: https://acv.vc/resources/indonesia-electric-vehicle-outlook

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