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Otoklix - Martin Reyhan_ACV Web

Otoklix CEO on Indonesia’s upcoming EV aftermarket

Published on June 27, 2024

Otoklix - Martin Reyhan_ACV Web

Vietnam’s electric vehicle (EV) manufacturer VinFast officially entered Indonesia earlier this year, setting up a new dealership in the Jakarta suburb of Depok and announcing it will soon invest US$1.2 billion to build a local assembly plant with a capacity of 50,000 cars per year. In parallel, Indonesia’s Ministry of Industry updated its EV transition roadmap, now aiming to produce 600,000 electric cars in the country by 2025.    

Indonesia’s ambitious EV adoption plan underscores the critical need for robust nationwide charging and battery-swapping infrastructure. But equally crucial is the development of a comprehensive aftersales service and repair sector for a new class of vehicles.

Backed by AC Ventures, local automotive aftermarket service and repair startup Otoklix recently announced it has inked a deal with VinFast to serve as the brand’s authorized service provider for customers nationwide. Otoklix co-founder and CEO Martin Reyhan Suryohusodo recently joined an episode of Indonesia Digital Deconstructed to discuss the new partnership and the role that Otoklix is now playing in Indonesia’s electric mobility space.

Training mechanics

Since its inception in 2019, Otoklix has concentrated on supporting independent workshops servicing gas-powered vehicles. In the third quarter of 2023, the company reported a doubling of its topline revenue year-over-year, alongside notable improvements in unit economics, with profitability in sight. Expanding its reach, Otoklix not only empowers millions of workshops but also operates its own signature shops across major Indonesian cities. Currently, the partnership with VinFast is limited to these proprietary outlets.

Martin explained that Otoklix must evolve to effectively and consistently service EVs. Training and education for Otoklix staff have become critical. The company has launched an academy dedicated to training mechanics in the intricacies of EV servicing. The initiative addresses the urgent need for a workforce skilled in the specific requirements of electric vehicles, focusing on safety and technical proficiency. 

He explained, “In our academy, we teach that servicing EVs isn’t just about the mechanical aspects—like brakes or tires, which are similar to those on gas-powered cars—but crucially about the software and electrical components, especially the battery. Unlike traditional vehicles, you don’t replace the entire battery on an EV. When a cell fails, you replace just that cell, not the whole battery. Ensuring a tight seal during this process is critical to prevent damage from moisture or dirt. This requires not just technical skills but also proper safety practices. Very importantly, mechanics must wear insulated gloves and use specific tools to avoid electrical hazards, a fundamental shift from conventional car repair.”

Policy evolution, infrastructure

When asked about government-backed initiatives, Martin said, “Indonesia is one of the few countries where the government is actively supporting EVs, a commitment expected to continue under the incoming president. The government’s investment focuses on essential infrastructure elements such as expanding the charging station network and enhancing financing options.”

He went on to assess how global investors should be thinking about the future of charging versus battery swapping in Indonesia, saying, “Battery swapping stations require significant capital investment in infrastructure. Currently, NIO in China is a notable example where heavy investments have been made in this technology. Tesla initially considered this approach but abandoned it due to the high costs involved. A critical issue for global investors interested in Indonesia’s EV market is regulatory clarity concerning the commercial sale of electricity. Currently, all commercial electricity sales must go through PLN, Indonesia’s state electricity company, which could pose a challenge for any third-party charging station provider.” 

Skills first, supplies later

Martin touched on the long-term impacts of EV adoption on the automotive aftermarket. He pointed out that as vehicle technology evolves, specialized services, particularly those related to battery maintenance and software management, will become increasingly in demand. Otoklix’s proactive investments today in training and infrastructure aim to position the company at the forefront of a new era.

When asked whether Indonesia’s nickel reserves may play into workshop supply chains, Martin said, “Currently, we’re not focusing on that, despite the country having the largest nickel reserves globally. The shift in the EV industry toward lithium batteries, which are more economically viable, influences this decision. Although Indonesia produces a significant amount of nickel, most of it is processed into stainless steel rather than battery materials. This is due to the existing industrial infrastructure and capabilities being geared toward stainless steel production.”

He added, “Indonesia requires a specific type of smelter for nickel processing suitable for battery production, known as HPAL (High-Pressure Acid Leach). This method demands intensive purification processes. Currently, only two or three companies in Indonesia operate such smelters, and their output is primarily exported.”

On the horizon

When asked what he foresees on the EV front in Indonesia, Martin explained, “Over the next ten years, as the EV market expands, we expect to see a rise in demand for car parts that are as good as original parts but more affordable. This includes mechanical parts and components of batteries, like individual cells, but not whole batteries. We plan to partner with companies that make these parts instead of making them ourselves. This will enable us to supply independent workshops with components, offering EV owners more affordable and competitive options beyond just original parts.” 

He added, “It’s also important to recognize that gas-powered vehicles, including hybrids and emerging hydrogen power vehicles like those Toyota is investing in, will continue to coexist. It’s unrealistic to forecast a 100% market share for EVs. Also, the growth of the EV market crucially depends on continuous investment in infrastructure. This is a classic chicken-and-egg situation: the sale of EVs cannot outpace the development of supporting infrastructure, including financing options and a robust secondary market, which is essential for supporting the transition.”

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