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🧠 As we were brainstorming titles for this newsletter, we realized that we were spoiled for choice with the seemingly endless number of puns that we could use:

⚡ An Electric REVolution: transporting transportation towards a greener future

🔌 Mobilizing Mobility Electrification: sending shockwaves throughout the sector

🔋 Currents of Change: EVs or (internal com)BUST(tion engines)!

OK, that last one is a bit of a stretch…

Anyways, in this issue we are going to focus on Electric Vehicles (EVs) and how the global trend of transportation sector electrification is shaping up in Southeast Asia.

🤔 What’s the deal with EVs?

Emissions

🌫️ Globally, the transportation sector accounts for about a quarter of carbon dioxide (CO₂) emissions from energy, with about three-quarters of transportation sector coming from road vehicles:

🚗 In Asia specifically, the transportation sector accounted for a slightly lower proportion of emissions (13% in 2018) but they have been growing at double the rate of annual global transportation sector emission increases (~4% vs ~2%) due to rapid urbanization and increasing rates of vehicle ownership (ADB, 2023). Thus, decarbonizing the transportation sector—primarily through electrification—is a major part of climate mitigation strategy across the region.

Market Trends

📈 One major global trend is the growth of the EV industry. It has expanded rapidly in the past few years with most of the action happening in China (orange in chart below) and the EU (blue in chart below).

With automobiles in particular, Tesla is of course a household name in US and EU, while BYD has focused more on China and emerging markets.

While the above information makes it seem like Southeast Asia is a relatively small player in global EV markets, it’s important to note that mobility looks quite different in ASEAN as opposed to other markets: it’s dominated by motorbikes 🛵 in particular.

🏍️ There are roughly 235M motorbikes in the region, with very high household ownership rates: 87% in Thailand, 85% in Indonesia and 83% in Malaysia for instance (Impact Entrepreneur, 2023). Indonesia, the largest market in Southeast Asia, has over 125M motorbikes on the road, accounting for 80% of registered vehicles (Indonesian Ministry of Transportation, 2023). Vietnam, the second largest market, has 70M motorbikes on the road (Vietnam+, 2023). However, the penetration of EVs in the market is still quite low.

Singapore isn’t included above but worth mentioning: in July of this year, around 20% of new car registrations were EVs. However, in spite of this, the total share of EVs is still only about 1% of the total 1M vehicle population (Straits Times, 2023).

🚀 One thing to note from the chart above is that in 2015, China’s EV adoption rates were similar to countries like Indonesia, yet it managed to achieve massive growth in less than a decade. Governments across ASEAN hope to replicate this, setting ambitious targets:

• Indonesia: Coordinating Minister Luhut Pandjaitan aims to have 13M electric motorbikes and 2M electric cars on Indonesian roads by 2030 (AC Ventures, 2023). Moreover, the city of Jakarta recently procured 30 electric busses 🚌 from VKTR, an EV company that recently went through a local IPO this year (Jakarta Globe, 2023).

• Thailand: the government has set a target for EVs to reach 30% of total domestic vehicle production by 2030, amounting to 1.2M EVs (Reglobal, 2022).

• Singapore: the city-state has committed to phasing out sales of internal combustion engine cars by 2030 (SCMP, 2023) and Singapore’s Land Transport Authority has committed to electrifying the entire bus fleet by 2040.

All told, EVs are expected to reach around 140M new consumers in Southeast Asia by 2030 with Thailand and Indonesia driving the bulk (ASEAN Energy, 2022). In terms of market size, the ASEAN EV market was estimated at $500M in 2021 and is expected to increase by over 5x to $2.7B by 2027 (ADB, 2022).

💸 With such a large potential market, this industry has been attracting a large amount of investments: ASEAN attracted $2.1B in EV-related investment in 2019 but it jumped up to 9X that in 2022 at $18.1B (Jakarta Globe, 2023).

EV Supply Chain & Infrastructure

We cannot discuss EVs in a silo, in particular we must consider the supply chain and supporting infrastructure.

Supply Chain

⛏️ EV production heavily relies on critical minerals like nickel, cobalt, lithium, graphite, and manganese that are especially important for their batteries 🔋. Given exploding demand, the prices for these materials have been skyrocketing over the past couple of years, with supply struggling to keep up (Reuters, 2022). With the value of these materials increasing, it’s created a sort of “gold rush” effect, which has exacerbated some of the underlying human rights and environmental issues that are associated with mining these minerals.

🪨 Nickel is especially relevant to Southeast Asia because Indonesia boasts the largest nickel reserves in the world (Economist Intelligence Unit, 2023). However, it also has its share of human rights concerns with hazardous working conditions leading to death (Rest of World, 2023) and environmental degradation leading to poisoned water supplies of surrounding mined areas (Rest of World, 2022).

Infrastructure

🔌 Globally there were around 2.7M public charging stations at the end of 2022, of which around 1/3 of those were installed in that year itself (IEA, 2023); China, the EU and the US account for the vast majority.

🔋 In Southeast Asia, given that most of the EVs will be 2- as opposed to 4- wheelers, we expect a different type of infrastructure to emerge: battery swapping stations. In Indonesia alone, there were just shy of 1K battery swapping stations in 2020—but there are targets to grow to 14K by 2025 and 52K by 2030, an increase of 14X & 52X respectively! (AC Ventures, 2023),

Later on, we have an interview with a battery pack startup founder.

📚 Want to learn more about this topic?

1. Global EV Outlook 2023 from IEA

2. Indonesia’s Electric Vehicle Outlook from AC Ventures

3. Mapping SEA’s electric vehicle players from TechInAsia

4. How To Improve Electric Transport in South-East Asia from Earth.org

📢 Shout-out to MAKA & Electrum

MAKA Motors is an electric vehicle startup focused on delivering electric motorcycles that meet the unique needs of Indonesian riders.

With a strong emphasis on innovation and engineering excellence, MAKA Motors aims to redefine the electric motorcycle landscape by offering products that excel in durability, power, range, and affordability. The company's dedicated team of experts is committed to driving the adoption of electric mobility in Indonesia and contributing to a greener future. The company raised a $37M seed round, one of the largest for a hardware startup in SEA, co-led by AC Ventures, East Ventures, and SV Investment in July 2023, aiming to launch its first mass product in 2024.

For more information, visit their website.

Electrum is an Indonesian technology company focusing on EV infrastructure and ecosystem development in Indonesia.

Founded in 2021, Electrum is a joint venture between GoTo Group—Indonesia's tech giant—and TBS Energi Utama—a leading integrated energy company focusing on providing sustainable energy in Indonesia. This year, Electrum introduces its first EV bike, Electrum H5, along with battery packs and battery swap stations.

To join Electrum in accelerating EV adoption in Indonesia, please contact [email protected] 

🗞️ Recent News

👍🏻 Good News

🤑 UNDP’s experiment in Vietnam with Selex Motors* demonstrates that EVs boost the incomes of delivery drivers by around 35% (UNDP, 15 November 2023)

*FYI Selex CEO, Nguyen, mentioned that they’re open to partnership opportunities, so check them out!

🔋 Malaysia’s first battery storage-integrated EV charging system opens with seven more to follow (Energy Storage News, 24 October 2023)

👎🏻 Bad News

⛏️ Crackdown on illegal mining forces Indonesia to import nickel ore (Financial Times, 6 November 2023)

🪫In Southeast Asia’s EV race, consumer demand still lags behind other regions (South China Morning Post, 4 November 2023)

🤕 E-vehicles supply lines leave trail of abuse in Southeast Asia (Vatican News, 22 May 2023)

📢 Other Voices

🤾🏻‍♂️ “Indonesia’s early EV pioneers are making ground but vulnerable to disruptors” by Putra Muskita (Tech in Asia, 28 November 2023)

🚘 “Are We There Yet? Indonesia’s Huge EV Challenge” by Mailinda Eka Yuniza & Jonathan Abram Dewanto (The Diplomat, 20 November 2023)

🔌 “How is Southeast Asia’s charge to EVs going"?” by Tham Siew Yean (Eco-Business, 2 November 2023)

🛵 “Electric Motorbikes, not Cars, Mitigate Climate Change in SE Asia” by Richard Hartung (Impact Entrepreneur, 17 October 2023)

🎙️ Interview with Albert of Oyika

💡 Why were you initially inspired to start working in the EV industry?

⚡ I was inspired to join the electric vehicle industry due to my expertise in Electrical & Electronics Engineering and a deep concern for climate change. My experience at Tesla and the awareness of the significant potential for electric motorcycles in Indonesia, especially in Southeast Asia, motivated me to contribute to this industry.

🛠️ How exactly is Oyika uniquely solving it?

🔋 Oyika addresses the electric vehicle battery issue through a Battery-as-a-Service scheme, allowing users to rent batteries instead of purchasing them. This reduces concerns about battery degradation and initial costs, while ensuring the availability of high-quality batteries. This approach helps to lower the barriers to EV adoption and supports the development of more efficient infrastructure.

😲 What is a surprising fact or misconception about EVs?

🚲 Many people seem to correlate electric motorbikes with electric bikes which are weak and slow, but there are actually now powerful and fast electric motorbikes in the market. But specifically with Oyika, it can power these motorbikes with dual-battery system to use twice the power and get twice the range, and Oyika will continue to innovate to get the batteries with higher energy density to supply higher rate of power.

🎬 How can readers support Oyika’s work?

📲 Follow us on social media @oyika.indonesia and share it with your friends! We’re on Instagram, TikTok, Facebook, and Youtube. You can also join our mission to combat climate change and save the world by sending us an email to [email protected]!

🦸🏻 What do you do when you’re not saving the world?

🔭 Try to find other ways to save the world! I’m always open to collaborate on other causes that can help the future generations.

🎧 New Full Circle podcast episode!

Today, we’ve published our fifth podcast episode! In it, Karina interviewed Sean Tseng of ClientEarth, a legal consultant, and part of the Energy Systems, Asia team. His work focuses on the use of corporate and financial laws to enable and promote climate action within the private and public sectors in Asia. He discussed the correlation between finance and climate from a legal perspective.

⏭️ Next week, we’ll be looking at climate disaster response and how an innovative organization is tackling it by leveraging tech and data.

❓ Did you enjoy this week’s issue? If yes, please do forward to your friends who would enjoy the read as well. Also, feel free to let us know what you thought by giving us feedback at [email protected].

🌊 SEA you next week!

Karina & Massimiliano