Conditions for Chinese Electric Cars to Survive in Indonesia

KatadataOTO – The government is encouraging the accelerated adoption of environmentally friendly vehicles through various measures. One of them is providing incentives for electric cars in the form of tax cuts.

Various manufacturers continue to arrive in Indonesia, almost all of them from China. Major players from their home country are also starting to enter the domestic market, such as BYD and Geely.

Meanwhile, other brands that have been established in the country for longer, like Chery, regularly introduce new models. Most recently, Chery released the J6, an electric off-road SUV, with a price of Rp 500 million to Rp 600 million.

The presence of new EV (electric vehicle) products, in the short term, seems to contribute significantly to national sales.

Photo : Geely Global

The lineup of electric cars from China is also believed to help boost national car sales figures. However, there are two determining factors for the success of Chinese electric cars here.

“In the long run, price and the completeness of the ecosystem (SPKLU and others) will determine electric car sales,” said Riyanto, an automotive observer from LPEM (Institute for Economic and Social Research) UI, when contacted by KatadataOTO some time ago.

To support the growth of electric car usage, several related parties have started developing a supporting ecosystem, such as electric vehicle charging stations in many places.

Most recently, PT PLN (Persero) is said to have prepared 1,000 SPKLU units on the Trans Java-Sumatra homecoming route, spread across 615 locations and equipped with on-call officers.

Considering the ecosystem is a primary concern for consumers before buying an electric car, Riyanto believes this will be one of the determining factors for the success of Chinese EV sales in Indonesia.

Government Efforts to Fulfill Sustainability Commitments

Besides electric car incentives, there is a three percent tax subsidy for hybrid cars. Although the figure is relatively small, observers believe this assistance will be effective.

Photo : TAM

“Especially if fuel prices rise. Many will shift to hybrid (cars),” said Riyanto.

The benefits of hybrid car incentives are claimed to be enjoyed by both producers and consumers. For Toyota cars, the assistance can reduce the price of the Kijang Innova Zenix HEV by Rp 10 million or more.

This, according to Riyanto, will eventually make the price of hybrid cars not much different from gasoline cars. Thus, it can be an attractive option for people who want to switch to environmentally friendly vehicles.