Indonesia drives home message on green vehicles

The G20 Summit will serve as a platform for Indonesia to showcase one of its most promising industries: the production of electric vehicles, or EVs.

More than 6,000 EVs — including buses, cars and motorcycles — will be traversing the resort island of Bali next week to take delegates to the summit. These vehicles were made by major automakers with stakes in Indonesia's EV industry, including China's Wuling Motors, Japan's Toyota Motor and South Korea's Hyundai Motor. Indonesia's state-owned utility Perusahaan Listrik Negara will be operating charging stations for the vehicles.

EVs are now a "global trend" and are considered an "energy transition strategy in many parts of the world", according to Fabby Tumiwa, executive director of the Institute for Essential Services Reform, a think tank in Jakarta.

Tumiwa said that by using green vehicles for the summit, Indonesia has reaffirmed that sustainable energy transition is a priority of its presidency of the G20, which comprises leading developed and emerging economies.

Energy transition

Their use at the gathering of world leaders on Nov 15 and 16 will "also signal that Indonesia is ready to (undergo) energy transition", said Tumiwa.

Indonesian President Joko Widodo has been promoting the EV sector for years, with its development seen as a way to push renewable energy and reduce carbon emissions in line with the Paris Agreement on climate change.

In 2019, Widodo issued a presidential decree that granted tax breaks and other incentives to potential investors in the sector.

Widodo has invited car manufacturers to invest in Indonesia. In May, he met Tesla chief executive Elon Musk to try to persuade the world's biggest EV maker to set up shop in Indonesia.

But Tesla is not the only carmaker that Indonesia has been targeting. In March, Hyundai opened an EV manufacturing plant in West Java. Toyota is considering investing 27.1 trillion rupiahs ($1.73 billion) in Indonesia over the next five years to produce EVs, while Mitsubishi Motors plans to invest about 10 trillion rupiahs in the next three years to produce hybrid and battery EVs.

In April, state-owned Indonesia Battery Corporation signed on to a $15 billion battery development project with China's Ningbo Contemporary Brunp Lygend and South Korea's LG Energy Solution.

Putra Adhiguna, an energy analyst, said that Indonesia's deployment of green vehicles for the G20 Summit is "a good start, but current plans for pushing (the use of) EVs on Indonesia's roads will need to be more ambitious".

Idoan Marciano, a consultant in Jakarta, said the biggest hurdle in EV development is "the gap between the public's willingness to pay and the average upfront cost of EVs".

He said China can help in this process, noting that Chinese EVs "might be better suited for the Indonesian public" given their affordability.

Contact the writers at prime@chinadailyapac.com.

Leonardus Jegho is a freelance journalist for China Daily.