As the third largest motorcycle country in the world, Indonesia is ambitious with its e-motorcycle adoption target of 13.5 million by 2030. But this number is not unrealistic. Within the last two years, according to a white paper on electric vehicles (EVs) by Deloitte, the market has seen a 15.4 times increase in e-motorcycle ownership.

In 2022, there were already 25,782 e-motorcycles in Indonesia, with more than 1,500 swapping stations available per Q1 2023. However, this does not mean that the journey into e-motorcycle adoption is not without barriers.

There are three barriers to adoption for Indonesian consumers:

1. Inadequate energy distribution infrastructure, such as charging station availability, range anxiety, and charging duration, are hindering consumers from shifting to e-motorcycles.

2. Expensive price of the EV. According to the white paper, approximately 56.77 per cent of electric motorcycles are sold with upfront battery cost (charging model), which results in spiking prices for customers.

3. Reliability and performance of the current products. With motorcycles being the primary mode of transportation and a source of income for low to middle-income families, performance factors such as driving range, charging duration, and speed result in hesitation towards trusting e-motorcycles.

Also Read: Exponent Energy unlocks a zero to 100 per cent 15-min rapid charge for electric vehicles

The following table gives an explanation of the factors that affect consumers’ decisions:

Battery swapping is the way to go

Indonesia’s e-motorcycle industry showcases a US$19.2 billion opportunity from both the manufacturers and energy distribution standpoint, according to Deloitte.

The current e-motorcycle industry is dominated by startups that raised equity and debt financing from institutional investors such as venture capitalists and private equities, especially as OEM players deploy a “wait and see” approach to EVs.

Also Read: SLEEK EV secures funding from ORZON Ventures to advance affordable electric mobility in SEA

The report also stated that the battery-swapping model of e-motorcycles, as opposed to the charging model, has proven its compatibility in the market. Of the 25,782 e-motorcycles on the road, the battery-swapping model accounts for 43.23 per cent.

There are several benefits that might have drawn customers to the battery-swapping model, including the 10-second lag time to switch batteries (as opposed to the three or four hours with battery charging).

In order to help consumers switch to e-motorcycles, there are several forms of support that the government is providing. For example, since 2019, the Indonesian government has continually imposed regulations to incentivise consumers, reduce manufacturing costs, and accelerate infrastructures for electric two-wheelers to achieve its targets by 2030.

The subsidies to promote procurement include sales subsidies totalling ~US$455.8 million, which will be deployed in 2024, with combustion conversion subsidies amounting to US$339/unit to cover the conversion cost for electrical engines.

—

Image Credit: RunwayML

The post E-motorcycle adoption in Indonesia: How to tap into this US$19.2B opportunity appeared first on e27.