More Wasteful with Electric Cars
The operational cost of an electric car, which consists of maintenance, energy and taxes, amounts to an average of Rp 23.3 million over a five-year period of use or 100,000 kilometers.
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The Transportation Ministry Electric Car Touring Group departing from Jakarta to Jambi arrived at the Public Electric Vehicle Charging Station (SPKLU) in Bandar Lampung, on Monday (17/1/2022).
Kompas daily has calculated the advantages and disadvantages of switching to electric vehicles. The high prices of electric cars and carbon footprint of power plants are also factored in.
JAKARTA, KOMPAS — Kompas' analysis of 69 types of gasoline, electric and hybrid, with a price of less than Rp 1 billion (US$66,000), shows that the cost of owning an electric car for five years is higher than a car with a combustion engine or one that uses fuel oil. The expensive price of electric cars overshadows the advantage of their daily operating costs, which are much lower than gasoline cars.
The operational cost of an electric car, which consists of maintenance, energy and taxes, amounts to an average of Rp 23.3 million over a five-year period of use or 100,000 kilometers. The amount is 76 percent lower than the operating costs of conventional gasoline cars, which amount to Rp 97.3 million over five years.
Thus, the use of electric cars can save energy costs of Rp 74 million for five years. However, this advantage is overshadowed by the initial investment cost of an electric car, which is about Rp 198 million more expensive. Electric cars have an average price of Rp 617.6 million, while the average price of a gasoline car is Rp 420 million.
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The total cost of ownership (TCO) of electric cars for five years is Rp 640.9 million. The TCO of gasoline cars is Rp 517.3 million. It means that the TCO of electric cars is 24 percent more expensive than gasoline cars. Based on the national household-expenditure data taken from the results of the latest National Socio-Economic Survey (Susenas) conducted by the Statistics Indonesia (BPS) and a simulation of electric car loans at an average price of Rp 617 million, only 371,806 Indonesian households can afford an electric car. The figure is only 17 percent of the target of 2 million electric cars by 2030.
The cost of owning an electric motorcycle is around Rp 32 million. This figure is lower than the TCO of gasoline motorcycles which can amount to Rp 39 million.
On the other hand, electric motorcycles have achieved parity in cost with gasoline-operated motorcycles. The cost of owning an electric motorcycle is around Rp 32 million. This figure is lower than the TCO of gasoline motorcycles which can amount to Rp 39 million.
Savings
The assessment also shows that the transition to electric vehicles can save Indonesian household expenditure. Based on data from the BPS’s Susenas survey in March 2021, the average monthly fuel consumption of a household that owns a motorcycle is Rp 164,000. Meanwhile, the average monthly fuel spending for a motorbike and car are Rp 574,000 per month.
If these households replace their gasoline vehicles with electric vehicles, their electricity expenditure is estimated to increase only by Rp 34,817 and Rp 166,342 per month, respectively. It means that there is
a savings of Rp 129,183 per month for households with an electric motorbike and Rp 407,658 for households that have electric motorbikes and electric cars.
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An electric car for the Ministry of Transportation's tour group charges the battery at the Public Electric Vehicle Charging Station (SPKLU) in Bandar Lampung, on Monday (17/1/2022).
The total savings obtained by the 60.4 million households who own gasoline vehicles could amount to Rp 146.9 trillion.
Dirty energy
Meanwhile, electricity supply in Indonesia, which is still dominated by fossil energy-powered plants, has failed to fully utilize the potential for reducing carbon emissions resulting from the use of electric vehicles. Based on state electricity company PLN’s 2021 Statistics, coal accounts for 62 percent of Indonesia's energy sources.
Environmentally friendly electric vehicles still produce carbon emissions every time the battery is recharged. Electric vehicles do not have exhaust gases, but the carbon emissions come from power plants.
If it is assumed that only about 51 percent of vehicles are actively moving every day, then there are 62.1 million of the 121.2 million motorcycles and 8.6 million of the 16.9 million cars that produce carbon emissions every day.
However, because Indonesia's energy sources are still dependent on coal, the carbon-emission reduction obtained is only 49.8 million tonnes.
If all of Indonesia's electricity supplies come from green energy sources, the transition to electric vehicles can reduce carbon emissions by up to 69 million tonnes per year. However, because Indonesia's energy sources are still dependent on coal, the carbon-emission reduction obtained is only 49.8 million tonnes.
This figure does not take into account the carbon emissions resulting from forest clearing for the operation of mining activities to produce electric vehicle batteries.
Lack of incentives
The government has a high ambition to accelerate the transition of private gasoline vehicles to electrified ones. Starting with the Presidential Decree No. 55 of 2019 concerning the acceleration of the battery-based electric vehicle program, the government targets the transition to 2 million electric cars and 13 million electric motorcycles by 2030.
Another regulation, Presidential Instruction Number 7 of 2022, was issued to require the use of electric vehicles as operational vehicles of the central and regional governments.
The success of the transition policy depends on people’s participation. In other words, the cost of fulfilling the ambition is still borne by the community, which has to spend more money to buy electric vehicles, and which are more expensive than gasoline vehicles.
Electric cars are being introduced in stages by PT Toyota Astra Motor by looking at the needs of the community, especially the availability of infrastructure to support electrical technology.
In fact, one of the major advantages of this transition is that the government will receive a reduction in the fuel-subsidy spending.
Finance Minister Sri Mulyani Indrawati said the economic price of subsidized Pertalite fuel was Rp 14,450 in early September 2022. If the selling price was Rp 10,000, the subsidy provided by the government amounted to Rp 4,450 per liter for Pertalite gasoline. If the transition is made by all vehicle owners, the subsidy spending can be reduced by up to Rp 71.7 trillion.
Currently, the incentive that has been given by the central government is only in the form of the abolition of Sales Tax on Luxury Goods (PPnBM). From the local government, for example, in Jakarta, there is a free ownership-transfer fee policy. Through PLN, there are also incentives in the form of a 30 percent discount on electricity rates for use from 22:00-05:00 for customers who have registered as owners of electric vehicles.
A lecturer in Energy Security at the Indonesian Defense University, Imam Supriyadi, assessed that the government actually had a fiscal capacity to provide additional incentives to the public to make electric vehicles more attractive.
Assistant Deputy for Maritime Industry and Transportation at the Office of Coordinating Maritime Affairs and Investment Firdausi Manti acknowledged that as the price of electric vehicles, especially cars, was still too expensive, it would be difficult push for a massive transition to electric vehicles in the country.
Therefore, in addition to looking for new players to invest in Indonesia, the government also needs to provide more fiscal-incentive options to lure people to buy electric cars.
According to him, the electric vehicles are still very expensive because there are only a small number of electric car variants available in Indonesia and most are classified as cars for those in the upper-middle income bracket. Therefore, in addition to looking for new players to invest in Indonesia, the government also needs to provide more fiscal-incentive options to lure people to buy electric cars.
Several options could be in the forms of abolition of certain taxes and the provision of price discounts.
“This discount is limited, for example, to Rp 60 million-Rp 70 million, while the price of the car is up to Rp 800 million-Rp 900 million. What's the effect? If there are many variants, the price can decline to Rp 300 million-Rp 400 million; then the discount is between Rp 50 million and Rp 60 million. This is not bad,” said Firdausi.
The chairman of the Association of Indonesian Automotive Producers (Gaikindo), Yohannes Nangoi, acknowledged that the transition to electric vehicles had become a necessity in Indonesia. He said that the Indonesian automotive industry could only provide electric vehicles in the price range of Rp 200 million-Rp 300 million, Rp 400 million-Rp 600 million, up to over Rp 600 million. According to him, brands and variants will continue to develop and be adjusted to the direction of government policy.
"The challenge for the Indonesian automotive industry is to continue to increase the types and numbers of electric vehicles produced nationally and to continue to develop the Indonesian automotive industry globally," said Nangoi.
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The Wuling E100 electric car was exhibited at GIIAS. ICE BSD City, Tangerang, Banten.
Indonesian consumers' interest in electric vehicles is increasing. At the GIIAS automotive exhibition, August 2022, 1,274 electric cars were sold. In fact, sales during the 11-day exhibition exceeded the total sales of electric motor vehicles throughout 2021.
Engineer of the National Research and Innovation Agency, Setyo Margo Utomo, said that the availability of clean energy and price were the key issues in the transition to electric vehicles.
“We must be able to provide sufficient clean energy supply so that electric vehicles do not just transfer greenhouse gas emission from the highway to the power generation. Second, the price of electric vehicles is still very expensive; of course, it is burdening the community, " Setyo said in a seminar at the Indonesia Electric Motor Show, in Jakarta, last week. (PUT/SPW /XNA)
(This article was translated by Hendarsyah Tarmizi)
