Growing the Allure of Electric Vehicles

KOMPAS/RONY ARIYANTO NUGROHO

The electric vehicle used by the Energy and Vacation Exploration team tries to charge at the public electric vehicle charging stations (SPKLU) in Nusa Dua, Bali, on Monday (12/9/2022).

JAKARTA, KOMPAS — The echo of the transition from oil-fueled vehicles to electric vehicles continues to strengthen, including in Indonesia. This cannot be separated from the roadmap for the transition to sustainable energy which is more environmentally friendly. The acceleration of the transition is needed if it is seen at the dynamics of world crude oil prices in 2022.

However, the allure to make people want to switch to electric vehicles must continue to grow. Even though it is certain to be more efficient from a rational operating perspective, the purchase price of electric vehicles is still relatively more expensive. Various incentives need to be increased so that the market grows, while waiting for the development of the domestic industry whose initiation has already begun in batteries.

The government has issued regulations for accelerating the transition to electric vehicles. Mainly through Government Regulation (PP) Number 55 of 2019 on the Acceleration of the Battery-Based Electric Motor Vehicle (KBLBB) Program for Road Transportation. A number of derivative regulations from various ministries have also been issued.

This regulation includes regulating public electric vehicle charging stations (SPKLU) and public electric vehicle battery exchange stations (SPBKLU).

One of them is the regulation of the Energy and Mineral Resources Ministry Number 13 of 2020 on Provision of Electricity Charging Infrastructure for KBLBB. This regulation includes regulating public electric vehicle charging stations (SPKLU) and public electric vehicle battery exchange stations (SPBKLU).

Based on data from the Energy and Mineral Resources Ministry, as of July 2022, 346 SPKLUs and 369 SPBKLUs have been built. The number also continues to be added to facilitate the needs of electric vehicle users.

"This is the right time to switch to electric vehicles because the regulatory instruments already exist. The seriousness of business entities in supporting the KBLBB acceleration program has also been seen by the many proposals for infrastructure development," said the acting director-general of electricity at the Energy and Mineral Resources Ministry, Dadan Kusdiana, in a written interview with Kompas last September.

Dadan added that the Energy and Mineral Resources Ministry also provides incentives for charging electric vehicles for electric vehicles. In addition, there is the ease of licensing for electric vehicle business entities and electric vehicle charging business entities.

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PLN President Director Darmawan Prasodjo also assessed that now is the right time to switch to electric vehicles. He said that currently Indonesia's oil consumption is 1.5 million barrels per day. With economic growth of around 5 percent, demand will increase to more than 2 million barrels per day in 2030. Meanwhile, domestic oil production is currently 660,000 barrels per day and the trend is declining. So, switching to electric vehicles is one way to reduce the need for oil imports.

KOMPAS/RONY ARIYANTO NUGROHO

The electric vehicle used by the Energy and Vacation Exploration team crosses the Denpasar-Nusa Dua Toll Road, Bali, on Monday (12/9/2022).

From the comparison of fuel and electric vehicles, the average price of gasoline, which is around Rp 15,000 per liter, is equivalent to 1.5 kWh of electricity, around Rp 2,300 (15 US cents). “So, this is a shift from imported energy to domestic-based energy. From expensive energy to cheap energy. From energy with high emissions to energy with low emissions," he said in Jakarta on Tuesday (11/10/2022).

Increase the incentives

One of the challenges in the transition to electric cars is that the types of cars currently marketed in Indonesia are still limited and relatively expensive. The government has issued Government Regulation (PP) Number 74 of 2021 which regulates the Sales Tax on Luxury Goods (PPnBM) of 0 percent on battery electric vehicles. However, these incentives are not enough to make prices more affordable. Currently, the price of electric cars is generally still above Rp 500 million.

Therefore, both fiscal and non-fiscal incentives need to be continuously provided.

Chairman of the Daily Board of the Indonesian Consumers Foundation (YLKI) Tulus Abadi said, from the consumer side, the most important thing is what benefits can be taken by switching to electric vehicles. Therefore, both fiscal and non-fiscal incentives need to be continuously provided. "It is ironic that people are asked to switch, but electric cars are still classified as luxury goods," he said.

Lack of variants

Assistant Deputy for Maritime Industry and Transportation of the Coordinating Maritime Affairs and Investment Ministry Firdausi Manti said the current price of electric cars is still expensive (above Rp 500 million). There is only one variant that costs Rp 200 million-Rp 300 million and does not allow fast charging.

“The government hopes that foreign investors will invest here to increase the variants so that there will be more choices. Currently, there are only a few [the majority] who are consuming premium and it is still expensive," he said.

The government, Firdausi added, is also considering incentives to cut the prices of electric vehicles. “It is being discussed, worked out, how this can be given. Because, in other countries, incentives like that are also given. In Thailand, for example, there is a discount of Rp 60 million-Rp 70 million,” he said.

The executive director of the Institute for the Development of Economics and Finance (Indef), Tauhid Ahmad, said that the more manufacturing manufacturers produced in Indonesia, the lower the prices of cars. In addition, it can also absorb labor and increase economic growth.

ADRYAN YOGA PARAMADWYA

Wahyudi Joko Santoso

Meanwhile, the Energy and Mineral Resources Ministry will focus on the conversion program from gasoline motorcycles to electricity. Coordinator of the Directorate General of Electricity at the Energy and Mineral Resources Ministry, Wahyudi Joko Santoso, said that in 2021 100 gasoline motorcycles had been converted, while the number is targeted to reach 1,000 units by the end of 2022. (DIT/WER/MEL)

(This article was translated by Hyginus Hardoyo)