Indonesia is accelerating its journey toward a greener future by targeting significant reductions in greenhouse gas emissions through electrified transportation. The nation aims to achieve Net Zero Emissions (NZE) before 2060, with an interim goal of cutting emissions by 29 percent by 2030. A key driver behind this effort is the increasing adoption of electric vehicles (EVs), which surged by 120 percent in 2021 compared to the previous year. However, achieving widespread EV use remains a complex challenge due to affordability issues and insufficient infrastructure.

Affordability stands as one of the most formidable barriers to broader EV acceptance. Presently, the cost of most electric cars far exceeds that of traditional vehicles, primarily because of the high expense associated with EV batteries. These components can account for up to 60 percent of a vehicle’s total price. To mitigate this issue, Indonesia is exploring domestic production of EV batteries, although this initiative is still in its infancy. Additionally, expanding the network of charging stations presents another layer of difficulty, as it necessitates substantial investment and strategic placement in various public areas. Public education about EV technology also plays a vital role; many Indonesians remain unfamiliar with these advancements, indicating a need for more comprehensive awareness campaigns.

The government has already taken steps to create a supportive legal framework for promoting EV adoption, such as Presidential Regulation No. 55/2019 and Government Regulation No. 74/2021. Initiatives like revisiting programs aimed at making low-cost green cars accessible are being considered to enhance affordability. Current incentives include reduced Value Added Tax (VAT) rates on EV purchases, though recent adjustments have slightly increased consumer costs. Industry experts advocate for more aggressive fiscal measures, suggesting that VAT exemptions could significantly stimulate both consumer interest and industry growth. By fostering greater accessibility and affordability, Indonesia can pave the way for a sustainable transportation revolution that benefits its people and the planet.

Beyond addressing current obstacles, there lies a tremendous opportunity for Indonesia to lead in sustainable innovation. By integrating research, supportive policies, and scalable solutions, the country can not only meet its environmental targets but also stimulate economic growth within the automotive sector. Encouraging collaboration across industries will ensure that cleaner, more efficient transportation becomes a reality for all citizens, contributing positively to global efforts against climate change.