Editor’s note: information about the plant’s capacity has been updated

Vietnam’s electric vehicle (EV) manufacturer VinFast has officially entered Indonesia earlier this year, setting up a new dealership in the Jakarta suburb of Depok and announcing it will soon invest $1.2 billion to build a local assembly plant with a capacity of 50,000 cars per year.

VinFast said in a statement on Monday that local automotive service and repair startup Otoklix who is backed by AC Ventures, has recently inked a deal with VinFast to serve as the brand’s authorized service provider for customers nationwide.

It is noted that the Indonesian Ministry of Industry has updated its roadmap for the electric vehicle transition, targeting domestic production of 600,000 electric cars by 2025.

Indonesia’s ambitious EV adoption plan underscores the critical need for robust nationwide charging and battery-swapping infrastructure.

But equally crucial is the development of a comprehensive aftersales service and repair sector for a new class of vehicles.

“Indonesia is one of the few countries where the government is actively supporting EVs, a commitment expected to continue under the incoming president,

“The government’s investment focuses on essential infrastructure elements such as expanding the charging station network and enhancing financing options,” said Martin Reyhan Suryohusodo, Co-founder and Chief Executive Officer of Otoklix.

According to him, battery swapping stations require significant capital investment in infrastructure.

He also noted that a critical issue for global investors interested in Indonesia’s EV market is regulatory clarity concerning the commercial sale of electricity,

“Currently, all commercial electricity sales must go through PLN, Indonesia’s state electricity company, which could pose a challenge for any third-party charging station provider,” he said.

He also pointed out that as vehicle technology evolves, specialized services, particularly those related to battery maintenance and software management, will become increasingly in demand.

He said that Otoklix’s proactive investments today in training and infrastructure aim to position the company at the forefront of a new era.

He also explained that Otoklix must evolve to effectively and consistently service EVs.

He also highlighted that training and education for Otoklix staff have become critical and the company has launched an academy dedicated to training mechanics in the intricacies of EV servicing.

According to him, the initiative addresses the urgent need for a workforce skilled in the specific requirements of electric vehicles, focusing on safety and technical proficiency.

Over the next ten years, as the EV market expands, he expects to see a rise in demand for car parts that are as good as original parts but more affordable.

This includes mechanical parts and components of batteries, like individual cells, but not whole batteries, he added.

“We plan to partner with companies that make these parts instead of making them ourselves,

“This will enable us to supply independent workshops with components, offering EV owners more affordable and competitive options beyond just original parts,” he said.

He also said it’s also important to recognize that gas-powered vehicles, including hybrids and emerging hydrogen power vehicles will continue to coexist.

“It’s unrealistic to forecast a 100 percent market share for EVs. Also, the growth of the EV market crucially depends on continuous investment in infrastructure,

“This is a classic chicken-and-egg situation: the sale of EVs cannot outpace the development of supporting infrastructure, including financing options and a robust secondary market, which is essential for supporting the transition,” he added.

Since its inception in 2019, Otoklix has concentrated on supporting independent workshops servicing gas-powered vehicles.

In the third quarter of 2023, the company reported a doubling of its topline revenue year-over-year, alongside notable improvements in unit economics, with profitability in sight.

Expanding its reach, Otoklix also operates its signature shops across major Indonesian cities.

However, currently, the partnership with VinFast is limited to these proprietary outlets.

Otoklix is an online-to-offline solutions startup that is digitizing the automotive aftermarket sector in Indonesia.

Its solutions serve both sides of the market by simplifying the process of booking vehicle maintenance services with a customer-facing application and equipping independent car workshops with visibility, business software solutions and procurement savings.

Vietnam’s VinFast officially opens first dealer store in Indonesia