Design, assembly, control: MAKA Motors’ unique R&D approach
Published on July 26, 2023
On a recent episode of Indonesia Digital Deconstructed, host Leighton Cosseboom of AC Ventures (ACV) welcomed Raditya Wibowo, Co-founder and CEO of MAKA Motors, a Jakarta-based electric two-wheeler startup that just raised US$37.6 million in seed funding from a consortium of investors, co-led ACV.
ACV’s Founder and Managing Partner Michael Soerijadji also joined the discussion to shed light on the unique operational approach, supply chain strategy, R&D efforts, and ambitious scaling plan of the country’s latest homegrown electric vehicle (EV) player.
Following the funding announcement, MAKA Motors has quickly gained recognition in Indonesia’s burgeoning EV space. With its core competence anchored in R&D capabilities and product design, the company has positioned itself as an integrator, co-developing key motorbike components with suppliers. According to Raditya, the team is pursuing a “CapEx light” approach initially to validate public demand for their EV motorbikes before scaling production. This reflects MAKA’s prioritization of agility, efficiency, and discipline.
In March 2023, the Ministries of Finance and Industry announced generous incentives for EV buyers. The government is offering around US$500 for e-motorcycles and a 10% value-added tax (VAT) reduction for cars and buses. To qualify for these incentives, EVs must meet a minimum of 40% local content.
While Indonesia does not yet have the local manufacturing capabilities for core EV components, MAKA Motors has navigated around this challenge by procuring these components overseas – mostly from China. Meanwhile, Raditya and his team leverage Indonesia’s strong local supply chain for standard parts akin to those found in gasoline bikes – think body panels, chassis, and metal parts.
The unique strength of MAKA Motors lies in owning the design, assembly, and quality control of its electric motorbikes. This will allow the team to react quickly to surges in demand by expanding assembly lines and negotiating larger volumes from suppliers. The strategy is made possible by the company’s strong relations with suppliers, most of whom have shown optimism about Indonesia’s EV potential and have started setting up local manufacturing facilities.
“We thrive in R&D, creating our designs and integrating components. We strategically balance between global and local supply chains, taking ownership of design, assembly, and quality control. This setup lets us scale according to demand,” explained Raditya. “With new funding, we aim to start large-scale production and achieve profitability. Our unique approach is to build a custom, high-quality bike catering to Indonesia, which also meets the subsidy criteria. Our plan also includes gradually localizing more EV components.”
MAKA Motors’ seed funding round will be pivotal in setting up manufacturing operations, paying for tooling from suppliers, and purchasing custom molds, all aimed at launching production next year.
The company’s strategy to start early production at a larger-than-average scale is unique so far in Indonesia. By doing this, MAKA can negotiate better prices with suppliers and realize economies of scale on the manufacturing side, an approach that aligns with research from McKinsey suggesting that scale is critical in driving down costs in the EV sector.
Looking ahead, Raditya outlined how the company plans to further increase local content by localizing the production of core EV components such as the battery pack, electric motor, and control unit. This aligns with the bullish sentiment of suppliers on Indonesia’s market potential. As the archipelago continues to encourage local EV development, companies like MAKA Motors stand ready to contribute significantly to the nation’s transportation evolution. Listen to the full interview below.