dr. ir. riyanto, m - gaikindo.or.id · ekonomi kebijakan publik. market acceleration strategy for...

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Dr. Ir. RIYANTO, M.Si

Senior Researcher of LPEM FEB UI

❑ Experience :

1. Peneliti di LPEM FEB-UI : 1996 - Sekarang

2. Pengajar di Departemen Ilmu Ekonomi , FEB UI : 2000 – Sekarang

❑ Expertise :

1. Pemodelan Ekonomi

2. Ekonometrika

3. Ekonomi Pembangunan Wilayah

4. Ekonomi Kebijakan Publik

Market Acceleration Strategy for x-EV in Indonesia*

TIM PENELITI LPEM FEB UI

Gading Serpong

25th of July 2019

*Seminar “ Future Power Train Technology Scenario” salah satu acaradalam the 27th GAIKINDO lndonesia lntemational Auto Show 2019.

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Outline PresentationBackground

Price Comparison & Market Share in Other Countries

LPEM FEB UI Finding (2018) : Desired Price of Electrified Vehicle - BEV

Cost to be Incentivized to Achieve 20% Market of HEV (MPV1 Segment)

Total Cost of Ownership for Electrified Vehicles : Indonesia vs Other Countries

Impact of x-EV Market Acceleration in Indonesia

Electrified Vehicle (EV) Policy in Other Countries

Conclusion

Background

• The high growth rate of Automobile Industry Sector in Indonesia’s GDP (5.6% annually) versus Energy Security (fuel availability) and Environmental Issues (pollution)

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The role of petroleum in the Primary Energy Mix less than 25% in 2025, less

than 20% in 2050

Kebijakan Energi NasionalPP No. 79 tahun 2014

• Ministry of Energy and Mineral Resources, Ministry of Finance, and Ministry of Industry draft a Presidential Regulation to support the development of Electric Vehicles in Indonesia

• MoI also set up Target: 20% market share of Electrified Vehicle (HEV, PHEV, BEV) in 2025 under Low Carbon Emission Vehicle program → How to achieve the target ?

Paris AgreementCOP-21 2015

Indonesia participates in a world commitment to reduce greenhouse gas

emissions by 29% in 2030

Background

• Indonesia has just started a new phase to encourage the use of electrified Vehicle → increasing market share of EVs

• However, experience of other countries show that the electrified vehicle market share is still limited • Italy , BEVs have a market share 0.01% of the total new car

sales in 2017 • Austria, France, Switzerland or Germany, BEVs have a market

share ranging from 1.5% to 3% in 2017 (Danielis et al) • China : 2.2% (Market Share of PHEV and BEV in 2017)• Japan : 1% (Market Share of PHEV and BEV in 2017)

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Background

• Many factors play a role in the consumers’ car purchase decision (Coffman et al., 2017; Danielis et al., 2018). • monetary factor (e.g., purchase price, excise taxes, operational costs, parking fees)

• non-monetary (e.g., driving range, car size and segment, brand, attitudes, charging time and charging infrastructure).

• The monetary factor of costs are captured by the total cost of ownership (TCO) concept.

• TCO is defined both as a purchasing tool and a philosophy, aimed at understanding the true financial cost of buying a specific good such as a car (Ellram, 1995)

• Since, EV and ICE are mutually substituted product, It is important to compare Price and TCO of EV and ICE in Indonesia

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TCO and Car Sales

7Source : Danielis et al (2018)

Scenario:

Customer Preference

PrimarySurvey

National Auto Industry

Auto Component

Industry

Other Up & Downstream

Industry

Environment (+/-) : Volume

CO2

Sales(Number of

Vehicle)

Economy (+/-) • Output • Added Value (GDP) • Revenue

Social (+/-)(MP number)

Volume CO2 from ICE : Electrified Vehicle : BEV

Cost Gap Burden

Alternative Policy Instrument(Transfer tax, Lux Tax, Import Duty)

Total Cost Ownership (IDR/Km)

Infrastructure Convenience

ICEElectrified

VehicleS0(BAU)

S1

Business as Usual → Sales only Internal Combustion Engine (ICE)

Sales Target (2025) ▪ ICE : HEV= 80:20

Framework

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S2Sales Target (2025) ▪ ICE : PHEV= 80:20

BEV

S3Sales Target (2025) ▪ ICE : BEV= 80:20

S4

Sales Target (2025) ▪ ICE : Electrified Vehicle

(HEV, PHEV, BEV) = 80:20

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Country Price ICEPrice EV*

(Before Incentives)Price EV

(After Incentives)**

PHEV and BEV Market Share (after purchase incentives)***

2 years 5 years 2017

ChinaPurchase incentives:

20131x

BEV 1.1 – 3.4xPHEV 2.2x

BEV 0.8 –1.9xPHEV 1.4x

1%(sales 2015: 188.700

unit)5 year in 2018

2.2%(sales 2017: 579.000

unit)

JapanPurchase incentives:

20091x

BEV 1.5 - 2xPHEV 1.3x

BEV 1.2 – 1.7xPHEV 1.15x

0,4% 0,7% 1%

Thailand 1x no mass production/purchase of electric cars yet

United KingdomPurchase incentives:

20101x

BEV 1.8xPHEV 1.2x

BEV 1.5xPHEV 1.1x

0,1% 1% 2%

GermanyPurchase incentives:

20161x

BEV 1.7xPHEV 1.15x

BEV 1.5xPHEV 1x

2 year in 2018 5 year in 20212%

(Sales 2017: 54.560 unit)

*, ** Based on 1st – 3rd top selling EV prices in each country, compared to ICE cars with the same specifications, sourced from the respective car company website*** Compiled from various literature. Main references: Cheng & Tong (2017), d’Arcier & Lecler (2014), Yongpisanphob (2017), Germany Trade & Invest (2015), Butcher, Hinson, & Hirst (2018), Electric Car Market Statistics (2018). https://www.nextgreencar.com/electric-cars/statistics/. , Electric Car Sales Are Surging in China (Infographic by Forbes)

According to the data, Electrified Vehicle market show positive growth as an impact of government fiscal support to minimize price gap between Electrified Vehicle technology and ICE

Price Comparison & Market Share

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LPEM FEB UI Finding (2018) : Desired Price of Electrified Vehicle - BEV

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Survey Sampling Design

Non-user: distributed in Jabodetabek Area User: distributed in the automotive dealer in Jabodetabek Area

No. Area Respondent1 East Jakarta 192 North Jakarta 153 Central Jakarta 94 South Jakarta 165 West Jakarta 246 Bekasi & Cikarang 47

7Tangerang and Serang

35

8 Bogor and Depok 45TOTAL 210

No. Area Respondent1 East Jakarta 262 North Jakarta 263 Central Jakarta 264 South Jakarta 275 West Jakarta 266 Bekasi 25

7Tangerang, South Tangerang

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8 Bogor and Depok 26TOTAL 210

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Survey is conducted from July 10, 2018• Total number respondents of Non-User are 210 persons. The result shown in green graphic.• Total number respondents of User are 210 car. The sample was distributed in the automotive dealer in Jabodetabek Area, result shown in

orange graphic.

Survey Result

Started from July 10th, 2018. Ended in August 21st, 2018

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15 1619

24

45

35

47

Jakarta Pusat Jakarta Utara Jakarta Selatan Jakarta Timur Jakarta Barat Depok danBogor

(Kab/Kota)

Tangerang(Kab/Kota)

Bekasi(Kab/Kota)

User (210)

26 26

27

26 26 26

28

25

Jakarta Pusat Jakarta Utara Jakarta Selatan Jakarta Timur Jakarta Barat Depok danBogor

(Kab/Kota)

Tangerang(Kab/Kota)

Bekasi(Kab/Kota)

Non-user (210)

Conventional or Electrified- Vehicle (E-Car)?

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Half of respondents preferred Conventional Car rather than E-car

49,76%

43,10%

7,14%

Conventional / E-Car?

Conventional Car Electrified Car Don't know

Heard and Knowing about E-car

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Most of respondents have ever heard about E-car,But only around 60% know about E-car production in some countries

87%

93%

13%

7%

Respondent who choose Conventional Car Respondent who choose E-Car

Ever heard about E-Car

Yes No

59%

68%

41%

32%

Respondent who choose Conventional Car Respondent who choose E-Car

Know about E-Car production in some countries

Yes No

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From the survey, we’ve already got the result :

Many of respondents tend to pick PHEV dan HEV as their choice• 97 respondents (53.59%) tend to choose PHEV• 48 respondents (26.52%) tend to choose HEV• Meanwhile, 36 respondents (19.89%) tend to choose BEV

E-Car Technology Preference

Our survey found that PHEV and HEV more preferred by the respondent who preferred E-car rather than ICE

29

60

23

7

37

25

BEV PHEV HEV

Choosen Car Technology by Respondents

User Non-user

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36 respondents who preferred BEV, because of:1. Cost per 100km (only 0,2x from ICE)2. Maintenance Cost (only 0,6x from ICE)

Reason of Choosing Electrified Vehicle - BEVAccording to the survey result, potential customer think that BEV has advantage in operational cost (Cost per 100 km) but they has expectation to improve BEV price and driving distance

From 145 respondents1. 77.93% not preferred BEV because of its Price2. 77.24% not preferred BEV because of its Distance3. 91.72% not preferred BEV because of its Charging Time4. 21.38% not preferred BEV because of its Maximum Speed

58,33%

36,11%

5,56%

Cost per 100km Maintenance cost Distance in one charge

Reason of respondents (E-car), why preferred BEV(n=36; 100%)

77,93% 77,24%

91,72%

21,38%

Price Distance in one charge Charging time Maximum speed

Reason of respondents (choose E-car), why not preferred BEV (n=145)

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Respondents who did not choose BEV as their preference:• 32,27% respondents want BEV in range of 1.00x – 1.20x

from ICE Price• 15,60% respondents want BEV in range of 1.51x – 2.00x

from ICE Price

On average (n=282), the desired price is 1,61x from ICEThe mode value is 1,00x from ICE (29.79% of respondents)

Desired Price of Electrified Vehicle - BEV

Customer will more accept if the BEV price has similar or 1.2 higher than ICE Price.

15,96%

32,27%

15,60%

25,53%

10,64%

< 1.00 x 1.00 x - 1.20 x 1.21 x - 1.50 x 1.51 x - 2.00 x > 2.0 x

BEV Desired Price (n=282)

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Cost to be Incentivized to Achieve 20% Market of HEV (MPV1 Segment)

Framework : Cost to be Incentivized to Achieve 20% Market of HEV (MPV1 Segmen)

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460 570

2017 Price: 207

Max Price 327

2025 HEV Price : 265

(30% CS ~ 10% HEV )

2025 20% price: 221

(60% CS ~ 20% HEV)

P ( Mio IDR)

Q

Cost to be incentivized (fiscal support) : 44.45 Mio IDR (16,74%)

HEV Price by 2025 is 1.25 * OTR Price 2025

That is, 1.25 * 212 = 265

At this price, consumers whose WTP is at least 265 is could then afford to switch from conventional vehicle (ICE) to the

electrified vehicles (EV)

However, the consumers may also opt to still purchase ICE. This study assumes that 3 out of 10 such consumers switch to EV, while the remainder remains buying ICE (30 percent).

Under our framework, we shall calculate the necessary price incentive for the consumers to reach the targeted market

share, including 20 percent of EV share in 2025.

In this example, our calculations points 20 percent of EV market demand could be gathered using around 45 Million

IDR worth of incentives, under the MPV1 segment.

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Price to be Accepted by Customer and Cost to be incentivized to Achieve 20% Market of EV (HEV Technology)

Segment Level Tax 2017 Sales (Unit)

Average OTR Price 2017 (Mio

IDR) Elasticity

HEV Price in 2025 = 1.25 x ICE

OTR Price

Potential Demand HEV

(% of ICE)

HEV Price to Achieve 20%

Market Demand

Necessary Incentive

Necessary Incentive

(in percent)

Sedan Type

Entry Low 30% 3,144.00 296.00 -3.31 380.33 3.99 316.39 63.94 16.813%

Medium 40% 5,809.00 640.00 -3.31 821.84 3.99 683.67 138.17 16.813%

Luxury 125% 186.00 1,019.00 -2.68 1,308.75 7.20 1,080.07 228.68 17.473%

MPV

MPV1 10% 460,570.00 207.00 -3.48 265.55 3.01 221.10 44.45 16.740%

MPV2 20% 134,399.00 358.00 -3.48 460.28 3.01 383.23 77.05 16.740%

MPV3 40% 1,723.00 406.00 -3.48 521.88 3.01 434.51 87.36 16.740%

MPV4 125% 201.00 1,132.00 -3.48 1,454.17 3.01 1,210.74 243.43 16.740%

SUV

SUV1 10% 245.00 193.00 -3.36 247.56 3.69 206.00 41.56 16.787%

SUV2 20% 2,260.00 417.00 -3.36 535.74 3.69 445.80 89.93 16.787%

SUV3 125% 1,133.00 1,624.00 -5.93 2,085.56 0.00 1,730.62 354.94 17.019%

LCGC 0% 234,554.00 133.00 -7.22 251.78 0.00 208.15 43.63 17.330%

Around IDR 221 Million is the maximum price (Price Gap 7% compare to ICE) to achieve 20% market of EV (MPV1 Segment)

Average

incentive

needed is

16% - 17%

to achieve

price gap

7%

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Price to be Accepted by Customer and Cost to be incentivized to Achieve 20% Market of EV (PHEV Technology)


Average OTR Price 2017 (Mio

IDR) Elasticity

PHEV Price in 2025 = 1.4 x ICE

OTR Price

Potential Demand PHEV

(% of ICE)

PHEV Price to Achieve 20%

Market Demand

Necessary Incentive

Necessary Incentive

(in percent)

Sedan Type

Entry Low 30% 3,144.00 296.00 -3.31 425.97 0.00 316.39 109.58 25.726%

Medium 40% 5,809.00 640.00 -3.31 920.47 0.00 683.67 236.80 25.726%

Luxury 125% 186.00 1,019.00 -2.68 1,465.80 0.00 1,080.07 385.73 26.315%

MPV

MPV1 10% 460,570.00 207.00 -3.48 297.42 0.00 221.10 76.32 25.661%

MPV2 20% 134,399.00 358.00 -3.48 515.52 0.00 383.23 132.29 25.661%

MPV3 40% 1,723.00 406.00 -3.48 584.50 0.00 434.51 149.99 25.661%

MPV4 125% 201.00 1,132.00 -3.48 1,628.67 0.00 1,210.74 417.93 25.661%

SUV

SUV1 10% 245.00 193.00 -3.36 277.27 0.00 206.00 71.27 25.703%

SUV2 20% 2,260.00 417.00 -3.36 600.02 0.00 445.80 154.22 25.703%

SUV3 125% 1,133.00 1,624.00 -5.93 2,335.83 0.00 1,730.62 605.21 25.910%

LCGC 0% 234,554.00 133.00 -7.22 282.00 0.00 208.15 73.85 26.187%


Average

incentive

needed is

25% - 27%

to achieve

price gap

7%

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Price to be Accepted by Customer and Cost to be incentivized to Achieve 20% Market of EV (BEV Technology)


Average OTR Price 2017 (Mio IDR) Elasticity

BEV Price in 2025 = 1.5 x ICE OTR Price 2025

Potential Demand BEV (% of ICE)

BEV Price to Achieve 20% Market Demand

Necessary Incentive

Necessary Incentive (in percent)

Sedan Type

Entry Low 30% 3,144.00 296.00 -3.31 456.40 0.00 316.39 140.01 30.677%

Medium 40% 5,809.00 640.00 -3.31 986.21 0.00 683.67 302.54 30.677%

Luxury 125% 186.00 1,019.00 -2.68 1,570.50 0.00 1,080.07 490.43 31.228%

MPV

MPV1 10% 460,570.00 207.00 -3.48 318.66 0.00 221.10 97.56 30.617%

MPV2 20% 134,399.00 358.00 -3.48 552.34 0.00 383.23 169.11 30.617%

MPV3 40% 1,723.00 406.00 -3.48 626.25 0.00 434.51 191.74 30.617%

MPV4 125% 201.00 1,132.00 -3.48 1,745.00 0.00 1,210.74 534.26 30.617%

SUV

SUV1 10% 245.00 193.00 -3.36 297.08 0.00 206.00 91.07 30.656%

SUV2 20% 2,260.00 417.00 -3.36 642.88 0.00 445.80 197.08 30.656%

SUV3 125% 1,133.00 1,624.00 -5.93 2,502.68 0.00 1,730.62 772.05 30.849%

LCGC 0% 234,554.00 133.00 -7.22 302.14 0.00 208.15 93.99 31.108%


Average

incentive

needed is

30% - 32%

to achieve

price gap

7%

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Total Cost of Ownership for Electrified Vehicles : Indonesia vs Other Contries

TCO Comparison : EV vs ICE

• Rusich (2015 ,Italy)

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Gasoline Diesel Bi-Fuel CNG Bi-Fuel LPG HEV BEV (Owned Battery) BEV (Leased Battery)

Purchase Price (€) 11900 14000 15425 20600 18650 30369 21850

Operating Cost (€) 20838 17515 15784 17295 16172 9867 17423

TCO (€) 32738 31515 31209 37895 34822 40236 39273

TCO/KM (€/km) 0.32738 0.31515 0.31209 0.37895 0.34822 0.40236 0.39273

Ratio TCO/KM (Base Gasoline) 1.000 0.963 0.953 1.158 1.064 1.229 1.200

Percentage


Purchase Price (%) 36% 44% 49% 54% 54% 75% 56%

Operating Cost (%) 64% 56% 51% 46% 46% 25% 44%

TCO (%) 100% 100% 100% 100% 100% 100% 100%

Assumption 1: Car held 10 years, Annual treveled distance of 10,000 km, 80% trips are urban

Total Distance (Estimation car held X Annual Distance) (km) 100000


Purchase Price (€) 11900 14000 15425 20600 18650 30369 21850

Operating Cost (€) 26037 21595 21693 25229 20525 12140 21909

TCO (€) 37937 35595 37118 45829 39175 42509 43759

TCO/KM (€/km) 0.189685 0.177975 0.18559 0.229145 0.195875 0.212545 0.218795

Ratio TCO/KM (Base Owned BEV) 1 0.93826607 0.978411577 1.2080291 1.03263305 1.120515592 1.153464955

Percentage


Purchase Price (%) 31% 39% 42% 45% 48% 71% 50%

Operating Cost (%) 69% 61% 58% 55% 52% 29% 50%

TCO (%) 100% 100% 100% 100% 100% 100% 100%

Assumption 1: Car held 10 years, Annual treveled distance of 20,000 km, 80% trips are intercity

Total Distance (Estimation car held X Annual Distance) (km) 200000

Literature Review : TCO Comparison : EV vs ICE

• Coffman 2017 (Hawaii)

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Average PHEV Average BEV Average HEV Average ICE

TCO ($) 76500.00 72750.00 62600.00 61233.33

MSRP 33137.25 29537.5 25658.4 20814

Other Cost 43362.75 43212.50 37316.75 40419.33

RatioTCO (Base ICE) 1.25 1.19 1.02 1.00

Percentage

Average PHEV Average BEV Average HEV Average ICE

MSRP 43% 41% 41% 34%

Other Cost 57% 59% 60% 66%

Danielis 2018 (Italy)P-ICEV (Petrol) D-ICEV (Diesel) HEV BEV

TCO/KM (€/km) 0.77 0.96 1.19 1.32

Ratio TCO/KM (Base ICEV) 1.00 1.25 1.55 1.71

P-ICEV (Petrol) D-ICEV (Diesel) HEV BEV

TCO/KM (€/km) 0.46 0.55 0.68 0.7


P-ICEV (Petrol) D-ICEV (Diesel) HEV BEV

TCO/KM (€/km) 0.36 0.41 0.51 0.49


Assumption 1: 5,000 km (Annual Kilomaters Traveled)



x-EV TCO Estimation in Indonesia

• 5 years of ownership and AKT : 10 k

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LOW Low Fuel Price Assumption HIGH High fuel Price Assumption

TCO/KM ICE HEV PHEV BEV TCO/KM ICE HEV PHEV BEV

IDR / KM 3,118 3,325 3,804 4,035 IDR / KM 3,329 3,440 3,879 4,035

Ratio to ICE 1.000 1.067 1.220 1.294 Ratio to ICE 1.000 1.034 1.165 1.212

Perbandingan Perbandingan

ICE HEV PHEV BEV ICE HEV PHEV BEV

Depresiasi 32.3% 39.8% 40.6% 41.0% Depresiasi 30.3% 38.5% 39.8% 41.0%

Baterai Cost 0.0% 0.0% 0.0% 0.0% Baterai Cost 0.0% 0.0% 0.0% 0.0%

Maintenance cost 12.9% 12.1% 10.6% 6.2% Maintenance cost 12.1% 11.7% 10.4% 6.2%

Operational Cost 53.7% 47.5% 48.5% 52.6% Operational Cost 56.6% 49.3% 49.5% 52.6%

Sosial Cost 1.1% 0.5% 0.3% 0.2% Sosial Cost 1.0% 0.5% 0.3% 0.2%

100% 100% 100% 100% 100% 100% 100% 100%

MODERATE Normal Fuel Price Assumption

TCO/KM ICE HEV PHEV BEV

IDR / KM 3,223 3,383 3,841 4,035

Ratio to ICE 1.000 1.050 1.192 1.252

Perbandingan

ICE HEV PHEV BEV

Depresiasi 31.3% 39.2% 40.2% 41.0%

Baterai Cost 0.0% 0.0% 0.0% 0.0%

Maintenance cost 12.5% 11.9% 10.5% 6.2%

Operational Cost 55.2% 48.4% 49.0% 52.6%

Sosial Cost 1.1% 0.5% 0.3% 0.2%

100% 100% 100% 100%

1.00 1.00 1.001.07 1.05 1.03

1.22 1.19 1.171.29 1.25 1.21

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

Low Fuel Price Assumption Normal Fuel PriceAssumption

High fuel Price Assumption

TCO RATIO ( ICE=1)

ICE HEV PHEV BEV

x-EV TCO Estimation in Indonesia• 5 years of ownership and AKT : 18 k

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LOW Low Fuel Price Assumption HIGH High fuel Price Assumption

TCO/KM ICE HEV PHEV BEV TCO/KM ICE HEV PHEV BEV

IDR / KM 1,988 1,986 2,203 2,368 IDR / KM 2,199 2,101 2,278 2,368

Ratio to ICE 1.000 0.999 1.108 1.191 Ratio to ICE 1.000 0.956 1.036 1.077

Perbandingan Perbandingan

ICE HEV PHEV BEV ICE HEV PHEV BEV

Depresiasi 28.2% 37.0% 39.0% 38.8% Depresiasi 25.5% 35.0% 37.7% 38.8%

Baterai Cost 0.0% 0.0% 0.0% 0.0% Baterai Cost 0.0% 0.0% 0.0% 0.0%

Maintenance cost 11.3% 11.3% 10.2% 5.9% Maintenance cost 10.2% 10.6% 9.8% 5.9%

Operational Cost 58.9% 50.8% 50.4% 55.0% Operational Cost 62.8% 53.5% 52.0% 55.0%

Sosial Cost 1.7% 0.9% 0.5% 0.3% Sosial Cost 1.5% 0.8% 0.5% 0.3%

100% 100% 100% 100% 100% 100% 100% 100%

MODERATE Normal Fuel Price Assumption

TCO/KM ICE HEV PHEV BEV

IDR / KM 2,093 2,044 2,240 2,368

Ratio to ICE 1.000 0.976 1.070 1.131

Perbandingan

ICE HEV PHEV BEV

Depresiasi 26.7% 36.0% 38.3% 38.8%

Baterai Cost 0.0% 0.0% 0.0% 0.0%

Maintenance cost 10.7% 10.9% 10.0% 5.9%

Operational Cost 61.0% 52.2% 51.2% 55.0%

Sosial Cost 1.6% 0.8% 0.5% 0.3%

100% 100% 100% 100%

1.00 1.00 1.001.00 0.98 0.96

1.11 1.07 1.04

1.191.13

1.08

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40



TCO RATIO ( ICE=1)

ICE HEV PHEV BEV

Impact of Tax Exemptions (PPn BM) for x-EV

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5 years of ownership and AKT : 10 k , no tax exemption

5 years of ownership and AKT : 18 k , no tax exemption 5 years of ownership and AKT : 18 k, with tax exemption

5 years of ownership and AKT : 10 k , with tax exemption

1.00 1.00 1.001.07 1.05 1.03

1.13 1.11 1.081.20 1.16 1.13

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40



TCO RATIO ( ICE=1)

ICE HEV PHEV BEV

1.00 1.00 1.001.00 0.98 0.96

1.11 1.07 1.04

1.191.13

1.08

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40



TCO RATIO ( ICE=1)

ICE HEV PHEV BEV

1.00 1.00 1.001.00 0.98 0.961.03 1.00 0.97

1.111.05

1.00

0.00

0.20

0.40

0.60

0.80

1.00

1.20



TCO RATIO ( ICE=1)

ICE HEV PHEV BEV

1.00 1.00 1.001.07 1.05 1.03

1.22 1.19 1.171.29 1.25 1.21

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40



TCO RATIO ( ICE=1)

ICE HEV PHEV BEV

TCO Analysis : Summary

• In general, BEV have the most TCO

• The longer the years of ownership → the lower TCO

• The longer the annual kilometers traveled→ the lower TCO (AKT : 25 k (break even))

• If the fuel price is high, the x-EV tends to have lower TCO and becomes more appealing to the costumers

• Tax exemption on PHEV and BEV makes TCO of PHEV and BEV close to ICE

• Tax exemption on PHEV and BEV and fuel price is high make PHEV and BEV have the lower TCO compare to ICE

29

Impact of x-EV Market Acceleration in Indonesia

30

Environmental Impact Scenario

Electrified Vehicle could minimize the emission amount of CO2.

BEV has the least amount of CO2 emission (Can reduce CO2 Emission around 33% from BAU)

-

500.000

1.000.000

1.500.000

2.000.000

2.500.000

3.000.000

3.500.000

4.000.000

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

ICE only HEV only PHEV only BEV only Electric Car (combined)

18%+3% (21%)+11% (33%)

3232

Automotive & Component Industry Impact Simulation

Additional parts will be required for HEV and PHEV technology, while for BEV there are some ICE parts which will be

eliminated (E.g. Engine)

Value of Vehicle Parts Percentage of Vehicle Parts

*&** Calculate By LPEM Compare With ICESource: http://www.esri.go.jp/jp/prj/hou/hou031/hou31-2-4.pdf (Estimated by Japan Energy Economic Research Institute)

Components ICE HEV PHEV* BEV**

Automotive 1.800.000 2.200.000 2.520.000 2.692.800

HEV components - 400.000 720.000 1.324.800

Motor - 80.000 80.000 80.000

Power Control Unit - 80.000 80.000 80.000

Others - 80.000 80.000 80.000

Battery - 160.000 480.000 1.084.800

Common components 1.800.000 1.800.000 1.800.000 1.368.000

Engine 432.000 432.000 432.000 -

Chassis 198.000 198.000 198.000 198.000

Vehicle 414.000 414.000 414.000 414.000

Electric Components 360.000 360.000 360.000 360.000

Equipments 396.000 396.000 396.000 396.000

Components ICE HEV PHEV* BEV**

Automotive 100% 122% 140% 150%

HEV components 0% 22% 40% 74%

Motor 0% 4% 4% 4%

Power Control Unit 0% 4% 4% 4%

Others 0% 4% 4% 4%

Battery 0% 9% 27% 60%

Common components 100% 100% 100% 76%

Engine 24% 24% 24% 0%

Chassis 11% 11% 11% 11%

Vehicle 23% 23% 23% 23%

Electric Components 20% 20% 20% 20%

Equipments 22% 22% 22% 22%

http://www.esri.go.jp/jp/prj/hou/hou031/hou31-2-4.pdf

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Working Population : 108,207,767 (People)

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Additional Component of

AutomotiveSector

Loses Component of

Automotive Sector

% Output Changes of Automotive

Sector

% National

Output

% National

GDP

% ManPower

HEV Only 18,51% 0% 20,30% 0,33% 0,32% 0,21%

PHEV Only 33,33% 0% 36,54% 0,60% 0,57% 0,37%

BEV Only 43,80% - 20,00% 26,10% 0,40% 0,36% 0,21%

Electrified

Vehicle30,97% - 3,66% 27,31% 0,48% 0,46% 0,29%

Impact of Electrified Vehicle to National Economic

Electrified vehicle has opportunity to give good contribution towards national economic if all of the component can be

localized, Therefore Step-by-step shifting of Electrified Vehicles is necessary to create economic scale of electrified

component industry (To be localized)

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Aspect/CountryChina

Starting Year: 2009Japan

Starting Year: 2010Thailand

Starting Year: 2016United Kingdom

Starting Year: 2009Germany

Starting Year: 2007

Target 5 million EV sales in 2020

15-20% market share in 2020

20-30% market share in2030

Not yet set 100% EV sales in 2040 1 million EV sales in 2020

First Priority in EV Development

EV Purchase Incentives (Demand Side)

EV Purchase Incentives (Demand Side)

Investment/Production Incentives

(Supply Side)

Infrastructure Development

(Demand Side)

R&D(Supply Side)

Investment/ProductionIncentives

For every 10 ICE sales, carcompany must sell 1 EV

No specific policy, only encourages R&D

Exemption of component import duties, exemption of import duty for BEV for 2 years, exemption from

corporate tax

Provision of competitive grants, company tax cuts

from 17% to 9%

120% deductible of company tax, integration of production and R&D

EV Purchase Incentives See next slide

Other IncentivesEV can access restricted

areaNo Policy No Policy No Policy

EV can access restricted area, can use the bus lane

Compiled from various literature. (Main references: Cheng & Tong (2017), d’Arcier & Lecler (2014), Yongpisanphob (2017), Germany Trade & Invest (2015), Butcher, Hinson, & Hirst (2018))

Some developed/developing countries has strong intention to introduce Electrified Vehicles in their countries by developing Electrified Vehicle sales target in certain years.


Country EV Purchase Incentives Value

China

Tax exemption Exemption from Sales Tax (PPN) and Automobile Tax (PKB)

Subsidy from Central Government and Local Government

From central government: 35.000 – 60.000 RMB (74 million – 127 million rupiah)From local government: 40.000 – 60.000 RMB (84,5 million – 127 million rupiah)

Subsidy/Rebates from Car Company Max. 20.000 RMB (42,5 juta Rupiah)

Japan

Tax exemption/ReductionExemption from Sales Tax (PPN) and Automobile Tonnage Tax50% automobile tax (PKB) reduction

Subsidy from Central Government Max. 50% from the price difference between ICE and EV (with same specification), Max. 1 million JPY (130 million rupiah)

Thailand Tax Reduction Automobile tax (PKB) cut from 25% to 5% (PHEV) and 2% (BEV)

United KingdomTax exemption

5% subsidy, max. 4500 GBP (75,5 million rupiah) for BEV, max. 2500 GBP (42 millionrupiah) for PHEV

Subsidy from Central Government Exemption from Sales Tax (PPN)

Germany Subsidy from Central Government Max. 4.000 Euro (67 million rupiah) for EV with price below 60.000 Euro (1 billion rupiah)

Compiled from various literature. (Main references: Cheng & Tong (2017), d’Arcier & Lecler (2014), Yongpisanphob (2017), Germany Trade & Invest (2015), Butcher, Hinson, & Hirst (2018))

Electrified Vehicle (EV) Incentives in Other Countries

Therefore, in order to achieve the Electrified Vehicle sales target, their Government provides some incentivessuch as tax exemption, subsidy, rebates, etc.

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■ Introduction of Electrified Vehicle could bring positive effect to Indonesia by potentially

giving additional component industry and contribute to lower CO2 emission.

* Shifting to electrified vehicle potentially increase 20% - 30% automotive component

* CO2 Emission will decrease at least ± 18% from BAU

■ According to the simulation, In order to introduce Electrified Vehicle need to manage price

gap between ICE and Electrified vehicle

* 7 – 10% is average price gap to achieve 20% electrified vehicle

■ Need to study proper fiscal support (Incentive) to achieve Government target 20% of

electrified vehicle in 2025 while managing government income

(I.e. Tax reform, market incentive, more user benefit for electrified vehicle, etc)

Conclusion

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▪ To implement the acceleration of sales of electric cars the government can do this with a

'mixed' scheme, with a mix of HEV, PHEV and BEV entering the market;

▪ Need for good incentive policies such as tax exemptions and non-fiscal instruments such

as free of even odd numbers, special parking, etc. to encourage people to use electric cars;

▪ The government must give an example to use electric cars, such as replacing cars from

government employees with electric cars.

▪ Massive campaign of benefit for x-EV to potential consumers

Recommendation

Thank You…Comments and Suggestions

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