TIMES JAZIRAH, DENPASAR – Transition to sustainable energy was one of the three main discussions raised by Indonesia during the G20 Indonesia summit. As a form of support for the transition to sustainable energy, Indonesia used electric vehicles during the whole event of G20 Bali summit in Nusa Dua, Bali, on 15 and 16 November 2022.

A total of 1,452 units of electric vehicles were used during the grand event for all delegations; 962 units of electric cars, 454 units of electric motorcycles, and 36 units of electric buses.

Toyota bZ4X, one of the electric cars displayed during the expo.Photo 3: A futuristic-styled electric motorcycle in G20 expo.

The minister of state secretary of Indonesia, Pratikno stated that besides the primary goal of the campaign for the transition to sustainable energy, using electric vehicles during the peak event of G20 Indonesia was also intended to reduce the carbon emission.

To show the commitment of the Indonesian government to achieve this transition, President Joko Widodo enforced a new decree which stipulates the use of electric vehicles as official vehicles for central and regional agencies, through the Presidential Instruction Number 7 of 2022.

Through presidential instruction, President Widodo required all ministers and regional leaders to arrange a new regulation to accelerate the implementation of the use of electric vehicles as the primary form of transportation. He also asked all of the government members to create a budget allocation to support and realize this new project.

Meanwhile, the Coordinating Ministry for Maritime and Investment Affairs of Indonesia, Luhut Binsar Pandjaitan stated that the procurement of official vehicles next year must include electric vehicles to encourage Indonesian society to purchase and use electric vehicles as a form of support for the transition. He stated this information during his speech in the Bloomberg CEO Forum prior to the G20 summit event in Bali, Friday (11/11/2022).

This new presidential decree promotes the use of electric vehicles in Indonesian society. The Indonesian government also planned to subsidize all purchases of electric vehicles in 2023. However, the subsidy scheme still becomes a primary discussion in Indonesia, including the plan of subsidy preparation for approximately 7.5 million rupiahs for every purchase of an electric vehicle, so it can compete with the sales of fossil-fueled vehicles.

“No one will be interested in electric vehicles if they are more expensive than fossil-fueled vehicles,” said Pandjaitan.

Pandjaitan also stated that the government is currently discussing the plan for tax reduction for electric vehicle users and import incentives for electric vehicle industries based in Indonesia. This plan is continuously being studied and considered, which aimed to be finished later this year.

The Executive Director of Toyota Mobility Foundation for the Asia Pacific Region, Pras Ganesh stated that there are three complementary factors for the development of electric vehicles. First is accelerating the use of sustainable energy as a common source of energy. Second, the support for local production and manufacture using the potential of said sustainable energy domestically. Third, attracting the interest of the automotive market using subsidies and competitive prices.

“One of the main concerns is the diverse interest for vehicle types of the automotive market and the higher cost of sustainable energy,” said Ganesh.

According to Ganesh’s observation, small cars or segment B cars cover approximately 50 percent of the automotive market and approximately 20 percent of it covers light commercial vehicles. Thus, about 70 percent of the market is not in the electric vehicles category.

It is considered that the Indonesian government needs to understand the market and its diverse aspects to realize the dream of transition to sustainable energy, one of which is through the development of the nickel and electric vehicle battery industry to be able to fully support electrification in the transportation sector.

Indonesia needs a lot to successfully materialize the transition to sustainable energy, and price reduction through subsidization and infrastructure-supporting policies will be the first big step for electric vehicles in Indonesia. (*)