Electric Motorcycle Industry Behind Net Zero Emission Trends

by | Nov 2, 2022 | Study Insight | 0 comments

How is the zero-emission trend affecting businesses, especially the electric motorcycle industry? How is the government of Indonesia, Gojek, and Grab responding in the form of strategy?

Electric Motorcycle Industry
Source: newsroom.gojek.com

Lately, climate change is a phrase that is often heard that will also have an impact on the economy. On the website page of the World Economic Forum, the UN climate science panel stated that the world needs to reduce carbon emissions resulting from activities by 45% from 2010 levels by 2030. Furthermore, the world must achieve “net zero” to limit global warming to 1.5 degrees Celsius to prevent climate change and the resulting adverse effects including the economy.

The increase in world temperature is around 1.1 degrees Celsius, and if emissions continue to increase it is predicted to increase by around 3 degrees Celsius this century. If this is allowed to happen, scientists say it will lead to extreme weather changes and catastrophic consequences in many regions. If so, the economy may also be disrupted both in terms of production and consumption.

What are the opportunities in the electric motorcycle industry in Indonesia? How to achieve zero emissions in Indonesia?  Read this article to know more!

The Progress of Achieving Zero Emissions in the World and Momentum for the Electric Motorcycle Industry

According to Thomson Reuters Foundation News, so far only 10 countries have set targets to exceed 2050. But ironically, they are the largest emitting countries in the world where 55% of all emissions generated by these countries. One of them is China, which has set a target of 2060, and India has set a target of 2070. At the city level, more than 900 cities are lagging yet to do anything.

Cities that have set a net-zero target have only opened 235 cities, and many are from North America, Europe, and Asia. Meanwhile, from the business sector, companies that have set net-zero targets have increased from only one-fifth in December 2020, to more than one-third of the world’s public companies set net-zero targets. However, according to Net Zero Tracker, it is estimated that 65% of the target has not met proper reporting standards. Companies in Europe have the proportion of companies with the best net-zero targets at 58%, followed by North America at 36% and East Asia at only 20%.

According to BloombergNEF, two-wheeled vehicles such as motorcycles and scooters are the products that make up the largest segment of the road transport industry with sales reaching 82 million by 2021 worldwide. And amazingly, according to BloombergNEF’s Electric Vehicle Outlook (EVO) 2022, two-wheeled vehicles are one of the vehicle segments that are closest to achieving zero emissions by 2050. Globally.

Indonesian Government Support for Electric Motorcycle Industry

Reporting from KlikLegal.com, it has been seen that Indonesia is currently starting concrete steps in achieving zero carbon emissions, marked by the issuance of Presidential Regulation No. 55 of 2019 concerning the Acceleration of the Battery-Based Electric Motor Vehicle Program for Road Transportation (Perpres No. 55/2019). In this regulation, the minimum target for the use of Battery-Based Electric Motorized Vehicles includes, the level of use of domestic components for the production of two-wheeled and/or three-wheeled vehicles that is gradually increased.

Still, on the KlikLegal.com page, it says, to realize the transformation from fossil-fuel vehicles to electric-powered vehicles, Indonesia has also prepared a roadmap for the Provision of Electric Charging Infrastructure for Battery-Based Electric Motorized Vehicles by providing 31,859 electric vehicle charging stations in 2030 which is stated in the Regulation of the Minister of Energy and Mineral Resources No. 13 of 2020.

In addition, disclosed on the KlikLegal.com page, the Minister of Energy and Mineral Resources said that Indonesia already has a roadmap for the period 2021 to 2060 as a tangible manifestation of achieving the Paris Agreement targets. Several other strategies that will be implemented by the Indonesian government include the development of renewable energy on a large scale, gradual cessation of fossil power plants, and optimization of energy storage utilization such as battery energy storage system (BESS) and pumped storage which will begin gradually in 2031.

On the Tempo.co page, the Secretary General of the Ministry of Energy and Mineral Resources also added that the Indonesian government has three key strategies to meet these targets, namely the development of renewable energy, steam power plants, and acceleration of electric vehicles. And also the government asks for cross-departmental support in the governments, academia, business entities, and also the media to achieve the net zero emission target.

Gojek Indonesia and Grab Indonesia Strategies as an Opportunity

To achieve a green economy, two service companies between Gojek and Grab saw this as an opportunity and decided to compete with each other to participate in reducing carbon emissions. It is said on Bisnis.com, that Grab started first by ordering 6,020 electric motorcycles from the automotive company VIAR to be used by driver-partners throughout Indonesia in 2021.  

Grab said the strategy was part of a support for the government’s target to deliver 2 million EV units (Electric vehicles) in 2025 and of course the company’s efforts to support environmental conservation, especially in Indonesia by reducing carbon emissions. Grab is trying to continue to increase the number of electric vehicle fleets, which is stated in Bisnis.com, in 2021 the total number of electric vehicles used by Grab would be 8,500 fleets where Grab claims the company has helped reduce carbon emissions by 7,500 tons or equivalent to carbon sequestration by 350,000 trees in a year.

Quoted from Bisnis.com, this strategy was carried out by Gojek by forming Electrum, a joint venture company between Gojek and TBS Energi Utama (TBS) in collaboration with Pertamina, Gogoro, and Gesits, to develop an integrated electric vehicle ecosystem in the Gojek operating market. Gojek said this strategy was carried out to support the priorities of the Government of Indonesia related to a sustainable energy transition and accelerated development of the electric vehicle ecosystem in Indonesia. In more detail, explained in Bisnis.com, Electrum will continue to develop commercial trials in stages related to the use of two-wheeled electric vehicles up to thousands of units throughout 2022.

The collaboration between Electrum and Pertamina, Gogoro, and Gesits is considered very appropriate because it can utilize the expertise of each company in developing the infrastructure of the electric vehicle industry in Indonesia. In this case, explained in Bisnis.com, Electrum has a role as an integrator and developer of the electric vehicle ecosystem by combining Gojek’s network throughout Indonesia and TBS which has expertise in the energy industry sector.

Pertamina plays a role in providing infrastructure for exchanging electric motor batteries in the form of stations in the existing network of Public Fuel Filling Stations. Meanwhile, Gogoro is the party that will provide technological innovations for exchanging batteries and electric motors, and lastly, Gesits has the role of providing electric motors and supporting facilities.

Through Bisnis.com, the CEO and Co-founder of Gojek Kevin Aluwi said the use of electric motorcycles is a very suitable strategy to be implemented in Indonesia because there are more users of two-wheeled motorcycles in Indonesia than other types of vehicles. So it can be said that Indonesia has a very large market potential related to the two-wheeled electric vehicle industry in the future.

Enter The Indonesian Electric Motorcycle Market with BRIGHT Indonesia

Because of the huge impact of the electric motorcycle industry in Indonesia, of course, it takes a lot of in-depth research about the electric motorcycle market in Indonesia. So, to enter the Indonesian market, you need the right local partner to assist you.

BRIGHT Indonesia is an ideal business partner for you. We will assist you on the ground, including virtual assistants during the mission, logistical planning, and detailed communication. It can cause your company to focus on developing partnership cooperation rather than the hassles of the business trip.

BRIGHT Indonesia provides several services such as Market Insight Research, Business Partnership Engagement, Management and Strategy Consulting, and Foreign Direct Investment. The services will help your business to:

  1. Provide assistance for you in expanding and developing your business by identification of potential partners.
  2. Secure the agreement between client companies and future Indonesian business partners by providing a list of potentially suitable partners, arrange business meetings, and act as a liaison.
  3. Supporting our foreign client companies from the private sector with developing corporate or business unit strategies or helping your company from public sector organizations with public policy.
  4. Link client companies both from the private and public sectors in global foreign direct investment (FDI) through training and assisting your company in entering FDI source countries to gather investment for your company’s local markets.

For more information, email info@brightindonesia.net

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