Indonesia’s e-motorcycle manufacturers step on the gas

JAKARTA — Indonesia’s motorcycle market, one of the world’s largest, is going electric as superapps, a sovereign wealth fund and even a coal miner race to grab a slice of the new business.

Domestic manufacturers in Southeast Asia’s largest economy are capitalizing on the government’s broader push for electric vehicles, which includes a target of 13 million electric motorcycles on the roads by 2030 – a huge jump from around 12,000 last year in the country of more than 270 million people. For comparison: According to data from the market and consumer data provider Statista, there were over 110 million petrol motorcycles in Indonesia in 2020.

The government also plans to build 32,000 public charging stations by 2030 and has introduced incentives such as utility bills and tax rebates for electric vehicle owners. With fewer than 200 public charging stations at the end of last year, the necessary infrastructure is still a long way off, although companies seem unfazed, while rising battery prices have become a new challenge.

Miner Indika Energy is the latest Indonesian company to dive into the sector to diversify away from coal and announced the creation of electric motorcycle maker Ilectra Motor Group in April. And late last month, Indika announced a $15 million joint investment in Ilectra with Indonesian venture capital firm Alpha JWC Ventures and Hong Kong-based firm Horizons Ventures.

Earlier in January, Indika signed a tentative agreement with Taiwanese tech titan Foxconn and electric scooter maker Gogoro, and state-owned Indonesia Battery Corporation to explore “a broad spectrum of investment collaborations” in Indonesia’s EV ecosystem. The companies said this could include battery manufacturing and recycling, battery swapping stations and the production of electric motorcycles, cars and buses.

Also in May, Volta Indonesia Semesta said it aims to produce 60,000 electric motorcycles this year. Volta, a joint venture between Jakarta-listed digital service provider M Cash Integrasi and local last-mile delivery start-up SiCepat Ekspres, began commercial operations in November at its manufacturing facility in Semarang, Central Java province .

The goal far exceeds Volta’s total sales of just 506 e-motorcycles last year. The company has received an order for at least 10,000 bikes from SiCepat, which counts Singaporean sovereign wealth fund GIC among its investors, according to a report by DealStreetAsia in March.

To counteract the lack of public charging stations, SiCepat and M Cash are working together to set up a network of battery swapping stations – including at SiCepat drop-off points. Irwan Supriatna, a national sales manager at Volta, told Nikkei Asia in April that the goal is to have 500 battery swapping stations operational on the islands of Java and Bali by the end of this year — four times the current number in Greater Jakarta.

A few other local electric motorcycle manufacturers have made similar announcements over the past year, and most of them are taking matters into their own hands when it comes to charging, working with others to develop battery swapping facilities. While it can take hours to charge, it only takes a few minutes to replace dead batteries with new ones.

State-owned Wika Industri Manufaktur, which makes Gesits e-bikes, is partnering with Indonesian ride-hailing unicorn Gojek and state-owned oil giant Pertamina, along with Taiwan’s Gogoro.

Gojek last year founded Electrum, a joint venture with local energy company TBS Energi Utama, to expand Indonesia’s EV ecosystem. The ride-hailer has committed to electrifying 100% of its driver fleet by 2030 as part of its net-zero emissions drive. Gojek is currently running a pilot program where customers in Jakarta can order a ride on an electric motorcycle through Gojek’s smartphone app.

President Joko Widodo attends the launch of a collaboration between companies to develop an e-motorcycle ecosystem in February. (Photo courtesy of the Indonesian Presidential Office)

Gojek’s Singapore-based rival Grab ordered 6,000 electric motorcycles from Viar Motor Indonesia last year. Viar started as an electric bicycle manufacturer and currently operates an electric two- and three-wheeler factory in Semarang.

Grab launched a collaboration in March with another local electric motorcycle maker, Smoot Motor, and its sister company, battery swapping station startup Swap Energi, and state-owned utility Perusahaan Listrik Negara.

Ridzki Kramadibrata, president of Grab Indonesia, said the ride-hailing company operates 8,500 electric vehicles in Indonesia, most of which are motorcycles, and intends to increase the number to 14,000 by the end of this year. Swap, meanwhile, said it has set up 400 battery swapping stations at convenience stores and gas stations in Greater Jakarta and dozens more in Bali.

The electric motorcycle announcements come as Indonesia’s economy continues to recover from the COVID-19 pandemic and consumer curiosity about this new mode of transportation grows.

At the Indonesia International Motor Show in Jakarta in April, visitors took test drives at the Volta and Gesits booths. Volta prices are 20 million rupiah ($1,365) per bike or under, with Gesits bikes approaching 30 million rupiah. Prices are roughly similar to low and high end ICE motorcycles in the local market.

“With various options now available and news of government support, public interest is growing, especially over the past year,” Supriatna said at the Volta booth. He added that most of his retail customers are in their 20s or 30s and buy electric motorcycles “for prestige.”

Dewa, an official in Bali who asked to be identified by name, said he and his younger brother have been using a Viar motorcycle since 2019. You mainly take it for short trips, so you only need to charge it at home every few days.

“We saved a lot of gas, and there is [barely] Impact on electricity bills,” Dewa said, adding that his Viar requires less regular maintenance than petrol bikes. However, the downside is that it runs slower, with a top speed of 40 km/h.

Analysts say the prospects for electric motorcycles in Indonesia are promising as the large number of regular motorcycles on the streets indicate strong potential demand, with electric cars still too expensive for local customers.

Still, Japan’s Yamaha Motor and Honda Motor, which dominate the Indonesian motorcycle market, seem a bit reluctant to enter the domestic electric motorcycle industry. In April, Yamaha unveiled its E01 model during the IIMS show and also started a market test, but did not share any concrete plan for a commercial launch. Honda, meanwhile, is still conducting a market study following the launch of its PCX electric scooter for limited use by Gojek and Grab in 2019, with local executives hoping they can launch an electric motorcycle for the Indonesian retail market in 2024, according to local reports.

Koketso Tsoai, automotive industry analyst at Fitch Solutions, said the mergers of Indika and Gojek Electrum with Gogoro “could make a big difference in achieving success,” citing Gogoro’s expertise and potential for similar ones Results in Indonesia. However, he was less optimistic about other local players.

“Some local players without partnerships with established motorcycle manufacturers will face headwinds, particularly in battery sourcing and general electric motorcycle manufacturing,” Tsoai said in an email interview with Nikkei. “As a result, we’re not too keen on local players with no prior motorcycle manufacturing experience.”

Additionally, battery prices have skyrocketed in recent months due to supply disruptions caused by the Russia-Ukraine war and related sanctions on Russian metals, which could deter Indonesia’s budget-conscious consumers.

“Prices for potential electric motorcycle buyers remain high, and the prospect of further price hikes due to an increase in battery material prices could delay the launch, especially given the lack of sufficient consumer-centric support in the form of incentives,” Tsoai said.

Additional reporting by Ismi Damayanti.

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