Indonesia on Thorny Path to Electric Vehicles
Jakarta. Indonesia has taken the path to electric vehicles since President Joko Widodo in late 2019 issued a decree detailing the timeline to achieve a certain amount of EVs as public transport means and private uses.
Bali created electric bus regulations in 2019, becoming the first provincial government to do so. The Jakarta government followed in 2020, and currently electric buses are being trialed in Aceh, and soon will be trialed in Solo and more.
Research by the University of Indonesia shows that over 70% of the public are keen to have an electric vehicle.
Jakarta is among a few provinces which have started to trial electric buses while fighting its reputation as one of the world’s worst polluted cities.
Jakarta-based private taxi operator Blue Bird has added a number of Tesla cars to its fleet.
TransJakarta, a public transport service company owned by the city government, aims to have an entirely electric-powered bus fleet in less than seven years. The company relies on subsidies from the Jakarta government and is slowly turning to the renewable energy front.
To Bakrie Autoparts, this concept sounded like an opportunity that was not to be missed. Founded in 1975, the company is better known as producer of cast iron components for brands such as Mitsubishi and Isuzu.
But now the company is providing electric-powered buses to TransJakarta in order to break into the renewable energy industry.
The company’s CEO, Dino Ryandi, said in a recent interview that Bakrie is not aiming to make a large profit from this business venture – instead, it’s a chance to enter a new market.
According to Dino, there are an estimated half a million electric buses in the world, but 95 percent of which are located in China.
Bakrie is looking to “rejuvenate” itself by joining the renewable energy sector and has started to create electric bus body, the interior, seats and inside equipment, but still currently imports the chassis and battery from Chinese company BYD.
Bakrie decided to break into the renewable industry as electric vehicles are “inevitable”. If the company doesn’t enter the market now, they will eventually lose more than half of their current business – which of course caters to fossil-fuel powered vehicles, Dino said.
“Naturally we have to find some replacement for this product, so that’s why we decided to embark ourselves into new business which is energy, electric vehicle, and then specifically in the electric bus,” Dino said.
At least two BYD electric buses imported by Bakrie have completed roads test and began to enter service with TransJakarta last year.
According to Dino, there are currently 100 million vehicles being used in Indonesia, 2 percent of which are conventional buses -- those consuming gasoline or diesel fuel.
Indonesia ratified the Paris Agreement for global climate change in 2016 and agreed to utilize renewable energy among 23 percent of all forms of transportation by 2025.
To comply with the accord’s goals, many of those buses will need to be replaced by electric buses.
Also conforming to this change, TransJakarta plans to use only electric buses by around 2026-2027. This will mean a new fleet of around 14,000 electric buses will be required, providing an innovative market for auto industries to compete in.
Martin Anda, academic chair of environmental engineering at Murdoch University, related the importance of electric vehicles to Jakarta specifically.
“[Electric vehicles] run on batteries instead of internal combustion engines, so they don’t emit directly any air pollution, they don’t emit any greenhouse gases, so for somewhere like Jakarta – where there is a lot of air pollution – this is very useful,” Anda said.
Old EV Issues Solved
Indonesia – and all the world – need electric vehicles, and they need them now.
Yannes Pasaribu, lecturer in industrial design and a member of the electric vehicle research group at the Bandung Institute of Technology, explained this concept in more detailed terms.
“In principle, the EV design development differs only from the powertrain, by changing the internal combustion engine (ICE) to electric drivetrain. However, the basic principle of the two makes everything different. EVs [electric vehicles] are very efficient in using energy.
“Only about 20 percent of ICE cars have the same power capacity. Then, EVs are carbon free. Indonesia is currently in the preparation stage towards becoming a potential EV battery producer country.”
Former limitations of electric vehicles such as a small travelling range, and long charging times, are no longer a problem. Now electric vehicles can even beat the range of a regular petrol car, while faster charging times have been achieved.
Electric vehicles have many advantages over traditional fossil-fuel ‘driven’ vehicles. Electric vehicles can be charged at home rather than a petrol station, and a smoother and more comfortable ride than fossil-fuel powered cars is now provided.
Additionally, the lithium battery lasts 20-30 years, compared to the car’s lifespan of 10 -15 years. Therefore, the batteries can be reused for home energy storage after the car is no longer functioning.
“The use of electric buses in Indonesia clearly has the potential to be a good business. This is because the electric bus mileage is only about 20 percent of the Internal Combustion Engine (ICE) vehicle. Moreover, several world-class EV [electric vehicle] battery factories will grow in Indonesia,” Yannes said.
“The price of battery parts is around 40-50 percent of the total vehicle price - batteries are the most important and expensive parts.”
Governments play a major role in increasing the usage of electric vehicles. This can be achieved through the use of subsidies and government-sponsored infrastructure, which has been evident in many European countries.
“Norway’s always the example, with I believe over 60 percent of all new cars being electric right now – so it proves that subsidies help and penalties for petrol and diesel cars at the same time, for them to make the cost neutral,” said EV expert Thomas Braunl, a professor with the University of Western Australia.
Indonesian academics support this view.
“The key to the growth of EV and its industry in Indonesia is the need for supportive government policies, so that the process of manufacturing to spreading the use of electric vehicles in the country is maintained on a clear track,” Yannes said.
“All the series of policy making processes that are currently ongoing need to be monitored, so that they can become a more holistic policy portfolio and a domestic market system that is increasingly conducive to an electric vehicle ecosystem.”
The electric vehicle industry all hangs on the production of lithium batteries.
While Indonesia does not have a large amount of lithium, it does possess many high-quality minerals and natural resources - such as nickel and cobalt - needed for the electric vehicles.
These resources are estimated to be around $90 trillion, and once processed could reach more than five times that amount.
“Therefore, the EV strategy is very reasonable for Indonesia. Indonesia will become one of the world's largest lithium battery producers. The demand for batteries will soon increase in the period of 2023-2024,” Yannes said.
“The growth is predicted to reach 12 percent in 2025 and 23 percent in 2030. This will be one of the largest sources of foreign exchange for Indonesia in the future.”
Yet in the short term, electric buses are a suitable start to the beginning of solving the pollution problem and boosting Indonesia’s economy.
According to Doni, the Bakrie CEO, the only infrastructure needed for electric buses is the charging station, which requires a secure supply from the electricity board. Unlike electric cars, which need charging stations all around the city - thus requiring land – most bus fleets have areas where they can build chargers.
Dino said that Java and Bali have an electric surplus that can be used to charge electric buses overnight.
With the new battery technology that has a travel range of around 400 km per charge, it seems that each e-bus only needs one charge per day, and it can be done at night until dawn, when the bus is in a company-owned parking lot.
However, as more and more governments and companies see the potential goldmine within the renewable energy industry, Indonesia must be careful to avoid becoming a nation of foreign electric vehicle users rather than ‘EV’ producers.
Covid-19 proved a spanner in the works for even the most determined electric vehicle entrepreneurs.
The traditional casting industry was “severely hit”, with the market dropping by 50 percent during 2020. This obviously hurt Bakrie’s production numbers, however the company was luckily spared the worst of the crisis.
Now the market is back on the road again, as figures are returning to around 60-70 percent of the 2019 numbers.
Bakrie’s electric bus venture also suffered under Covid-19, with no buses sold. The company would have sold ten buses to the Jakarta Government for formula-e racing, to be used as transport for crews and spectators.
Jakarta was chosen to host the race in 2020.
The pandemic, however, put a stop to this plan. Both the race and Bakrie’s order were cancelled.
Having experienced a six month to one year delay, Bakrie hopes to start selling the electric buses again in 2021.
Bakrie have a “long-term” and “very big” plan for the next ten years. Buses are merely an entry point in their goal to modernize, and they plan to move to the industrialization of electric buses, start making lithium batteries locally, and join other industries related to renewable energy such as solar panels and energy storage.
Bakrie also plans to assemble the chassis locally from imported Chinese parts and do its own coach making.
The company aims to start to produce supporting parts like charging stations, cooperate with other Indonesian companies to make inverters, and try to convince companies such as China’s BYD to invest in Indonesia to produce the battery needed for the buses.
All-Electric in 15 Years
Professor Braunl stated that the only obstacle right now is that electric vehicles are too expensive.
“But I think it’s generally accepted that electric vehicles will be the only future of cars in ten years from now,” he said.
“I think pretty much all road transportation will be electric within the next 10 – 15 years, possible exception is long-haul trucks.”
The world must weigh up the impact that fossil fuels are having not only on our environment, but also on our health and life spans. If we can do something now, rather than later, we must consider the ramifications of not taking the wheel of change.
“There have been studies that [prove] more people die every year from vehicle emissions than from road accidents, and that’s a serious number,” he said.
The Bakrie CEO shares his view, saying the world simply cannot tolerate fossil fuel anymore.
“Electricity will be the king, we’ll find it more and more in our lives,” Dino said.
Ultimately, we – as global citizens – must choose to either ‘drive the path less taken’, or crash hard and fast into a terrible future.