Jakarta. The total addressable market for Indonesia’s electric vehicle (EV) ecosystem is set to surpass $20 billion by 2030, according to a joint study by AC Ventures and e-mobility association AEML.

The report shows that auto research and development (R&D), as well as manufacturing, offers the largest total available market, offering an opportunity of $12.5 billion-$15 billion by 2030. 

Vehicles and sales dealerships (excluding leasing/second-hand) are expected to hit up to $2 billion in market size by the next decade. The market size for Indonesia’s cell manufacturing and battery management system will be worth around $3 billion to $4.5 billion, while that of charging infrastructure is projected to reach between $2 billion and $3 billion. 

The study revealed that the service, maintenance, and battery recycling market size could stand at starting from $500 million to $1.5 billion by 2030. The battery recycling industry is not expected to be sizable by 2030 as the EV industry is still nascent in the Southeast Asian region. EV batteries generally last around 10 years.

 “So there are multiple parts of the EV market that are big enough for many players to win,” Jeremy Sianto, senior associate for investment at AC Ventures, told a press briefing in Jakarta on Monday.

The number of electric two-wheelers in Indonesia has also grown from just 1,947 units in 2020 to 26,000 units as of end-2022. There were 7,600 electric four-wheelers as of last year, a 33-fold increase from just 230 units in 2020. But Indonesia is still far from reaching its EV adoption target. The Southeast Asian country wants to have 400,000 electric four-wheelers and 1.8 million battery-powered motorbikes by 2025.

However, the trends in other countries indicate that Indonesia’s EV penetration level could witness significant growth in the future. For instance, mainland China saw its electric four-wheeler penetration climb from 1 percent in 2015 to 15 percent in 2021. China’s electric two-wheeler penetration level also rose from 0.5 percent to 19.7 percent over the said period.

 “We are seeing [EV adoption] trends go from 0.5 percent to 20 percent within the course of 5-6 years. We have even seen Vietnam's [two-wheeler adoption] grow from 1.2 percent to 9.7 percent. So it is possible with the right environment,” Jeremy said while calling for better collaboration between the public and private stakeholders for a more conducive EV ecosystem in Indonesia.