This country is betting big on two-wheelers for its electric vehicle strategy

State-owned auto manufacturing company in Indonesia is betting big on two-wheelers for its electric vehicle strategy. The company is focusing on more than 115 million motorcycles plying on the country's roads as it presses ahead with efforts to reduce emissions. The Indonesia Battery Corporation (IBC) plans to produce 50,000 battery packs for two-wheelers next year, President Director Toto Nugroho said in an interview with Bloomberg. The prototype already has safety accreditations and output is ready to begin.

IBC was formed in 2021 to support President Joko Widodo’s ambition to have an end-to-end EV supply chain - from nickel ores to locally-made electric cars. This push also comes as the country's government is under increased pressure to cut oil imports after the soaring global cost of crude forced it to hike gasoline prices, a move that sparked protests and weakened support for Jokowi, as the president is known.

At present, only 21,000 motorbikes in Indonesia are electric, implying that many riders in the country have to pay higher fuel costs. Now, in its EV push, the Indonesia government aims to boost domestic use of electric vehicles to two million units in 2025. It also plans to offer an incentive of 7.5 million rupiah ($484) for consumers to swap gas-guzzling motorbikes for electric ones.

In the next five years, IBC will produce battery materials and cells while recycling used batteries in a project, in partnership with LG Energy Solution and China’s CATL. The plant will use renewable energy and comply with global standards so it can export products to US and European markets. “We want to make sure the battery we produce here will not be dependent on imported minerals like lithium, graphite and cobalt," Nugroho said. “We want a battery that doesn’t use those minerals."