Indonesia’s move towards electric vehicles and clean energy will be slow but rewarding

As Southeast Asia’s biggest vehicle market and a major supplier of nickel, a key battery ingredient, Indonesia sees great potential in electric vehicles

But its current dependence on fossil fuel and lack of infrastructure support pose a massive challenge

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Rush hour in the afternoon in Jakarta in June last year, with traffic reduced as a result of the work-from-home policy. Photo: AFP

Akhmad HananandLuky Yusgiantoro

Published: 12:30pm, 28 Mar 2021Updated: 12:30pm, 28 Mar 2021

Amid the Covid-19 pandemic, Indonesia has began its transition towards clean energy, especially in its transport sector, which is the largest user of fossil fuels after the industrial sector. Such a move will increase Indonesia’s energy security, reducing its dependence on fossil fuels.

To support this transition, the government plans to replace vehicles with traditional internal combustion engines, with electric vehicles. It will be a massive endeavour in a country with 133 million vehicles, almost all powered by internal combustion engines, in 2019, the latest year for which official data is available.

This is roughly half the number in China – which has about five times Indonesia’s population – and has been steadily increasing every year. Indonesia’s motorised vehicle population grew 5.3 per cent in the year to 2019, after growing by 5.9 per cent the year before. Motorbikes make up about 84 per cent of vehicles, followed by private passenger cars at 11.6 per cent, then cargo vehicles and buses at barely 4 per cent.