New Report by Indonesia’s early-stage venture capital firm AC Ventures and and the Electric Mobility Ecosystem Association (AEML) has revealed a promising outlook for electric vehicles (EV) in Indonesia.

According to the report revealed on Monday, despite minimal adoption to date, the report sees a burgeoning market for EVs in Indonesia, with a total addressable market already surpassing $20 billion.

According to the report, Indonesia has set ambitious renewable energy goals, intending to augment the proportion of renewables to 23 percent of the country’s energy composition by 2025.

This marks a significant rise from the approximately 9 percent established in mid-2020.

The country envisions a broader nationwide energy transition to be completed by 2056.

These initiatives are consistent with Indonesia’s obligations under the Paris Agreement to decrease emissions by 29 percent by 2030 and to attain a net-zero emissions target by 2060 or earlier.

The report showcased a coalition of vital factors setting the stage for exponential growth in the nation’s EV market.

These include a surge in consumer demand, supportive government policies, and advancements in technology that enhance performance while reducing production and ownership costs.

The report also revealed that EVs in Indonesia promised 75 percent greater efficiency and significantly lower operating costs for businesses.

This offers the potential for the country’s electric mobility market to grow at a remarkable compound annual growth rate (CAGR) of 58.5 percent until 2030.

Further, EVs also have the capacity to substantially reduce the nation’s energy imports, which currently total $35 billion annually.

Currently, EV motorbikes account for a mere 0.2 percent of Indonesia’s two-wheeler market.

However, the report suggests an opportunity for this to exceed 10 percent over the next five years, assuming that public and private stakeholders collaborate effectively to nurture a conducive local EV sector.

Encouragingly, considerable capital and resource investments are already in progress.

Local brands and venture investors are actively forging deals and strategic partnerships, and the sector has already ushered in global automotive giants such as Hyundai, Honda, Toyota, Mitsubishi, Wuling, and others.

While the Indonesian EV market is still nascent, the reported opined it presents enormous potential.

It said entrepreneurs, stakeholders, investors, and policymakers who strategically position themselves today will reap substantial benefits from this burgeoning market in the coming years.

“The report’s revelations about Indonesia’s rapidly evolving electric vehicle market affirm the immense investment opportunity we’re witnessing,

“At AC Ventures, we’re excited to be at the forefront of this green energy transition, catalyzing sustainable growth,” said AC Ventures Managing Partner Helen Wong.

According to her, the current surge and trajectory in electric two-wheelers speak to the market’s clear demand and potential for remarkable returns.

“As a pioneering investment firm in this sector, we’re committed to fostering strategic collaborations to exceed Indonesia's renewable energy targets, promising a future of reduced emissions and enhanced sustainability,” she added.

AEML General Chairman Dannif Utojo Danusaputro said the association has partnered with the government of Indonesia, international organizations, key actors in the EV ecosystem, as well as other associations, to reach out to more people and promote a positive campaign for EVs.

“Our mission of electrifying mobility in Indonesia is based on a calling to protect the environment by reducing pollution for future generations,

“AEML is committed to supporting the adoption of EVs and fostering the creation of a globally competitive EV ecosystem,” he added.

AC Ventures is a Southeast Asian venture capital firm that invests in early-stage startups focused on Indonesia and ASEAN, with over $500 million in assets under management.

The firm empowers entrepreneurs with capital by combining operational experience, industry knowledge, deep local networks, and resources.

AC Ventures team has invested in over 120 tech companies in the region since 2012.

With a team of more than 35 professionals led by Adrian Li, Michael Soerijadji, Helen Wong, and Pandu Sjahrir, the fund has offices in Jakarta and Singapore.

AEML is a non-profit organization, industry body, thought leader, and public policy advocate for the EV ecosystem in Indonesia.

It engages, sustains, and grows the EV ecosystem through engagement with vehicle brand owners, component suppliers, battery providers, and infrastructure players.

Through these partnerships, it builds collaboration among all stakeholders, creating economic and social value for Indonesia.

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