prospect & penetration outlook of electric vehicle in

Oleh :I Made Dana Tangkas

Presiden Institut Otomotif Indonesia

Chairman PII - BKTI

CEO IBIMA

lo

1st International Workshop on Lithium-Ion Battery Technology

PROSPECT & PENETRATION OUTLOOK OF ELECTRIC VEHICLE IN INDONESIA

Oil Production, Consumption Energy Mix(RUEN)（1,000

bbl/day)

60000' 01' 02' 03' 04' 05' 06' 07' 08' 09' 10' 11' 12' 13' 14'15'

800

1,000

1,200

1,400

1,600

1,800Oil Production Oil Consumption

Consumption

Over

Production

Total :125 MTOE/year =

145.6 MkL/year

2013 2025

Total :400 MTOE/year =

466 MkL/year

Source: Badan PusatStatistik

Source: Ministry ofEnergy, RUEN

Indonesia Energy Issue and EnergyMix

Indonesia is already net importer of oil since 2003 and in order to solve this issue, government announced “Energy Mix” direction in 2014 to reduce the oil.

New and

renewa ble energy 5.70%

Oil

49%

Natural gas 20.10

%

Coal 24.50

%

New and

renewa ble

energy 23.00

%

Oil 25.00

%

Coal 30.00

%

Natural gas 22.00

%

(Aug 2019)BEVPresidential Decree Signed byPresident Jokowi

Source: Localmedia

On 5th August, President Jokowi signed to BEV Presidential Decree and showed will to provide incentive to promote BEV.

Date• Signing – 5th Aug• Interview – 8th Aug

Place • ASEAN Secretariat Building, Jakarta (Interview)

I have signed the EV presidential decree on 8th,Aug

President, Joko Widodo

President’s Interview Disclosed Contents andDirection

Conte

nt

Purpose• To promote BEV in Indonesia Automotive

market and develop BEV industry

Local

contents

requireme

nt

• BEV industry have to fulfill minimum

localization ratio

✓ 35% by 2019, 80% by 2025(4W)

Incentives

• Central government and regional government

can provide fiscal & non fiscal incentive for

BEV

President’s Direction

✓The regionalgovernmentwith big budgetneeds to startgiving incentiveforBEVdevelopment

✓ Exempted from Odd-evenregulation✓ Exempted from parking fee✓ Subsidy forbus &taxioperators to buy BEV

✓MOI is directed to clarify thefollowings:✓ Automotive developmentroadmaps✓ Calculation method for localizationratio✓ Condition ofIKD and CKD✓ Time limitand quotaforCBU import

World HEV Market General Review

HEV market is still 1.7 times as BEV and PHEV market. Japan is leading country of HEV

market in the world.

HEV Sales (2012 - 2017)

3.09%

1.76%

2.37%

20.42%

2.45%

0%

5%

10%

15%

20%

25%

2012 2013 2014 2015 2016 2017

Netherland Switzerland Germany

Norway France England

China Japan US

Source: Marklines

HEV Share (2012 - 2017)

Source: Marklines

1,095

364

112 62 16 41

1,3961,462

1,514

1,376

1,575

1,756

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2012 2013 2014 2015 2016 2017

Japan US China

France England Germany

Netherland Norway Switzerland

(K Units)

1.7 x

BEV,PHEV

HEV

WorldPHEV BEVMarket General Review

PHEV, BEV Sales (2012-2017)

2.94%

1.31%

39.19%

9.90%

2.20%

2012 2013 2014 2015 2016 20170%

5%

10%

15%

20%

25%

30%

35%

40%

45% US

Germany

England

Switzerlan

d

China

Norway

Japan

France

Netherlan

d

PHEV, BEVShare

in Each Country (2012 -2017)

53,172

159,436

96,602

192,478

42,448

118,684

269,991

185,518

115,261

33,611

481,897

307,134

157,181

44,888

567,674

194,578

62,170

535614894548,338

2012 2013 2014 2015 2016 20170

200

400

600

800

1,000

China

Norway

US

Germany

Japan

France

Switzerlan

d

England

Netherlan

d Sum

(KUnits)

PHEV/BEV market expand 6 times in the last 5 years. China become the largest EV market and Norway has the biggest PHEV/BEV share in the world.

x6.5

BEV,PHEV

Source: Marklines Source: Marklines,EAFO

Global Battery ProductionVolume

Recently, the battery production is concentrate in the East Asia, which is leaded by China, Japanese and Korea makers and still under utilization

Global Lib Battery Production Volume in 2016-2021(Estimated)

Source :fka:Roland and Berger2018

Germany

17,824(CATL)

178,448(CATL,BYD)

China

87,235(Panasonic)

J apan

97,540(LG,Samsung)

SouthKorea74,303

(Panasonic,LG)

USA

Cell Production Volume in MWh

(LeadingProduction

Company)

Legends

Name

Flag

9

Penetration Challenge for xEVProduct

Cost, driving distance, and charging time are all key considering points for xEV penetration in Indonesia.

Penetration Requirement

•PHEV and BEV has shorter driving distance

compared with ICE & HEV➢ ICE, HEV: 500 km/ one refill➢ PHEV, BEV: 300 km/ one charge

• Due to high technology of power train,xEV has higher cost compared with xEV

➢ HEV: 1.2 times compared with ICE➢ PHEV, BEV 1.5 times

• The cost is estimated will reduce in

future

•The nectary charging time is different

between xEV➢ ICE, HEV: Charging is not required➢ Rapid Charging: 0.5 hours➢ Normal Charting: 8 hours

ICE xEV

(MillionIDR)

300

600

BEV

PHEV

(Km)

(Hour)

Driving Distance w/ One Charge

AdditionalCost

8

0.1

ICE, HEV

0.5

Rapid Chargin

g

Normal Charging

Source: IOI “Automotive EnergyRoadmap”

3 Key Challenges lead Customer shifting from ICE toxEV

１ Affordable Cost 3 Short Charging TimeBEV,PHEV

HEV

2 Driving Distance BEV,PHEV BEV,PHEV

Estimation based on OriginalPrice

Lithium Ion Battery CostOutlook

Several reports developed by think-tank & consulting firm, lithium ion battery price gap will reduce 50% in the most appropriate condition.

Battery Cost

(10k JPY/kWh)

2.6

1.9

1.4

）

Mckinsey(2017)

NEDO（2013

）BlRoBoSmcebnearr

gio（2 2(2001167)

RB Scenario 1(2016)

IHS (2015)

Average

0

1

2

3

4

5

1.0Rough level

for cost parity w/ ICE

1.1

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Sources : NEDO Battery Roadmap 2013、Bloomberg Lithium-ion Battery Costs and Market、IHS Automotive Scenarios: Second-quarter 2016 update、Roland Berger Integrated Fuels and Vehicles

26k JPY ×40kWh=1.04M JPY

37%

8%11

%

6%

15%

24%

Battery Cost

Cathode

Anode

Electrolyte

Non-Material

Cost

Other

Material

Separator

If battery is 40kWh…

1

Roadmap to 2030+ 、 Mckinesy Electrifying insights: How automakers can drive electrified vehicle sales and profitability, *Average cost of CATL, Tianjin, Guoxuan, JEVE, BAK

Back cast Scenario

xEV Market SimulationImage

Output Image

Supported

by

Innovative

Policy

xEV

Penetr

atio

n

【Input for Calculation】- Market segmentation- Battery cost Simulation- Price elasticity, Profit breakeven

point etc.

2020 2030

To gain insight how automotive industry can meet with government target, we develop

xEV market simulation and scenario targeting 2020-2030.

Supported

by Existed

Policy

Fore cast Scenario

BAUScenario

Energy Mix

MeetTarget

B

A

C

Note:InternalImage

Scenario Pattern

Variation of CalculationLogic

Variety of scenarios have been preparedbasedon following incentive conditions

IncentiveScenario(with BBNKB7.5%)Do not provide any incentives

for xEV development

Provide large incentives that

impact law revision

Incentiv

es CO2 Tax

Revision

CO2 Revision will be

conducted

(ICE tax will Increase for 2%)

BBNKBExemption

(ICE 12.5%)

Charging Station

Subsidy

Non Fiscal

Incentive

(Odds-Even)

Same BBNKB apply for all xEV

(Both HEV & BEV are 10%)

No Charging Station Subsidy

No Non-fiscal Incentive

Reduction of BBNKB for BEV

(HEV 10%, BEV7.5%)

Charging Station Subsidy is available

Exemption of Odd-Even Regulation is Applied to xEV

(Approx 17M IDR of reductioneffect)

IncentiveScenario(with BBNKB 5%)

Large Reduction of BBNKB for BEV

(HEV 10%, BEV5%)

BAU Scenario A B C

BEV BEV

BEVHEV

HEV BEV

(10M IDR of reductioneffecBt)EV

orm

atiB

asic

Inf

on

Description

Price Gap for

BEV⇔HEV⇔ICE

(B-Segment 2030 in USD)

Provide incentives that do not impact

law revision

Note:Battery Pricefor BEV is approx. 4.4k USD

ICE HEV BEVICE HEV BEV

16.4 15.4 14.816.416.9

18

ICE HEV BEV

16.4 15.4 16

The incentive Scenario B says BEV will start penetration from 2026 and in total will achieve 585k units in 2030.

-

-

121 148 154 172

121 149 155176

241

61

306

249

126

268

203

277

280

565478

286

289

585

1,256 1,297 1,3401,388

1,4361,486

1,5361,586

1,636

※ CO2 Tax

※RegionalNon - Fiscal Incentive 381

※BBNKBModification

Modification

xEVSales Target (Comparisonbetween Scenario A andB)

B

-

-

121 126 130 135 167 173 179 184 198

1,2131,256 1,297 1,340

1,3881,436

1,4861,536

1,5861,636

1,691 1,691

HEV PV BEV PV

BEV Bus BEV Taxi Total Sells

Market Volume

121 126 130 136 171 179 186 194 211

BAU Sales Scenario Sales Plan after PolicyApplied

BAU Scenario A IncentiveScenario

M/S

M/S PV

(K Units)

9% 12% 1,21312% 34%

13% 17% 17% 49%

xEV Sales Target (Comparison between Scenario A & B)

20202021202220232024202520262027202820292030

Source: Estimation based on IOI“Automotive EnergyRoadmap”, GAIKINDO salesdata

20202021202220232024202520262027202820292030

Note: PV = Total PV Market – LCEV – Non SedanNote: the simulation is based on the condition that infrastructure catch up with global leading countries’ condition

-

-

126 130 135 167 173 179 184 198

121 126 130 136 171 179 186 194211

1,2131,256 1,297 1,340

1,3881,436

1,4861,536

1,5861,636

HEV PV BEV

PV

BEV Bus BEV

Taxi Total

Sells

Market Volume

The incentive Scenario C says BEV will start penetration from 2023 and in total will achieve 585k units in 2030 with rich government incentive.

xEVSales Target (Comparisonbetween Scenario A andC)

C

BAU Sales Scenario Sales Plan after PolicyApplied


M/S

M/S PV

(K Units)

-

-

121 148

121 178

154 172

162

336234

254 262 271 280

241 249 268 277286

289

585

1,2131,256 1,297 1,340

1,3881,436

1,4861,536

1,5861,636

1,691 1,691

※ Charging stationincentive

※ BBNKBModification

※ RegionalNon - Fiscal Incentive

※ CO2 Tax Modification

498 517 546 565

23% 34%

33%

49%

9%

12%

13%

17%

20202021202220232024202520262027202820292030

Source: Estimation based on IOI“Automotive EnergyRoadmap”, GAIKINDO salesdata

20202021202220232024202520262027202820292030

Note: PV = Total PV Market – LCEV – Non SedanNote: the simulation is based on the condition that infrastructure catch up with global leading countries’ condition

Break even point

(6,000-

8,000MWh)*

- - 121 126 130 235 375 499 625 751 887

HEV PV

BEV PV

BEV Bus

- - 121 185 212 3542,456

2,897

5,052

5,601

8,133

11,18

1

8

1,561

Lithium Ion Battery Production Target (Total)

Based on incentive scenario B, Indonesia is possible to attract Battery industry in 2028, due to possible to achieving break even point.


Non - FiscalIncentive

※ BBNKBModification※ Regional

B

BAU BatteryDemand Scenario BAU Battery Demand Scenario withIncentive


-- -20202021202220232024202520262027202820292030

20202021202220232024202520262027202820292030

Source: Estimation based on IOI“Automotive EnergyRoadmap”, GAIKINDO sales dataNote: PV =Total PV Market – LCEV – Non Sedan, The simulation is based on the condition that infrastructure catch up with global leading countries’condition*Based on interview result with China and Korea batterymanufacturer company, break even point for small batterymanufacturer

(MWh/Units)

Lithium Ion Battery Production Target (Total)

Based on incentive scenario C, Indonesia is possible to attract Battery industry in 2026, due to possible to achieving break even point.

※RegionalNon - FiscalIncentiv

e

※ BBNKBModification


C

BAU BatteryDemand Scenario BAU Battery Demand Scenario withIncentive


Break even point

(6,000-

8,000MWh)*

(MWh/Units)

- - 121 126 130 235 375 499 625 751 887

HEV PV

BEV PV

BEV Bus

--- -

20202021202220232024202520262027202820292030

20202021202220232024202520262027202820292030

Source: Estimation based on IOI“Automotive EnergyRoadmap”, GAIKINDO sales dataNote: PV =Total PV Market – LCEV – Non Sedan, The simulation is based on the condition that infrastructure catch up with global leading countries’condition*Based on interview result with China and Korea batterymanufacturer company, break even point for small batterymanufacturer

25

- 121 1,179

1,3273,198

3,3516,479

6,752

10,159

10,498

10,840

11,188

11,561

Suggestion on “How to penetrate xEV Industry in Indonesia”

We have several ideas/suggestions on how to penetrate xEV market in Indonesia and would like to share with you about our idea.

Suggestion fromIOI

Industry Improvement(to reduce cost

reduction)

Foreign Direct

Investment Attraction

Market Creation w

Policy Support

Plan Development •Develop realistic industry xEV

action plan and get agreement in stakeholders (On going)

•Create the market with additional policy-CO2 Tax, LCEV-BBNKB, Non Fiscal Incentive

-Charging infra subsidy etc.

•FDI attraction to localize the key component in Indonesia-Battery cell, Battery Pack-Motor, Inverter, Sensor, Etc

•Localization enhancement to increase competitiveness-Realize the battery cost

reduction curve with pass production and improvement-Develop supplier industry

Note: Indonesia AutomotiveInstitute

Next Step’s Biggest Challenge

【Necessary Consideration Point】 Smooth Industry Shifting

The number of the parts of EV is less than the ICE vehicle. At the same time, EV also need to produce new parts like battery, motor etc.

• As the other hand, inside EV we need the new parts like power electricity, Rapid charging plug.

▪ Cylinder head ▪Manual transmission ▪Exhaust manifold

▪Muffler

▪Hydraulic system ▪Ignition plug ▪Fuel tank

Engine Transmission Exhaust

Hydraulic Brake Ignition Device Fuel Parts

• The number of vehicle parts is estimated around 30,000 parts, and parts number of EV will be around 20,000. (Especially the engine related parts is not necessary in the EV)

【Parts not needed in EV (example)】【Parts Necessary for EV】

Disappearing Parts in EV New Necessary Parts inEV

Power Elec.Unit

Rapid Charging Plug

On-board Charger

Lithium-Ion Battery

Battery Control Unit

Power Elec. Control Unit

Synchronous Motor

Home Charging Plug

How to realize Smooth Industry Shift

How to maintain exist investment, employment?

How to attractCapital intensiveProduct anddevelop supplychain

Example : Supply Chain for Automotive BatteryPack

Automotive Battery Industry consists of several components and required integration within the supply chain (from Raw Material, Modul and finally Battery Pack)

Supply Chain for Vehicle BatteryPack

Principle Company

Assembler/ Mfg

Supplier

KaroseriDistri-butor

& Dealer

Charging House

*) Local *) Local

+) Local

MARKET/Customer

Charging Station (Shop)

+)Local

1) Domestic2) Export

Industrial Flow/ Business for Electric Vehicle

TYPE OF INVESTOR1) Foreigners2) Local3) JVC

1) JVC2) Local

+ 3 Core Technology

1) JVC2) Local

Outlet

Outlet

18

EV Development Center, Test and Evaluation

19

*NTA Facilities & Infrastructures

of Testing Process(1) Vehicle

Type Test

(2) ComponentEmission Test -> EnV

Safety -> NCAP #1 #2 #3 #4 dst.(Battery) (Motor) (Inverter) (Other )

Facilities of Testing Technology and Evaluation

prospect & penetration outlook of electric vehicle in

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