Indonesia Battery Corp eyes surge in electric scooters sales on incentive plan

By Fransiska Nangoy and Bernadette Christina

JAKARTA (Reuters) - State battery company Indonesia Battery Corporation (IBC) is targeting a local market share of up to 30% for electric motorbikes, its chief executive said on Friday, as the government tries to jumpstart the adoption of electric vehicles.

The government is aiming to reach 2 million sales of electric motorbike in 2025 as the Indonesia attracts billion of dollars of investment in processing its rich nickel reserves into battery materials.

Indonesia sold less than 40,000 electric motorbikes between 2019 and 2022, while its total motorbike sales in 2022 alone were 5.22 million units, industry data showed.

IBC last year acquired majority stakes in PT Wika Industri Manufaktur, producer of electric scooters Gesits, which currently has production capacity of 40,000 units per year.

"In the next few years the capacity could reach 75,000 to 100,000 units. So of the total government target, our target is to have 25% to 30% market share, which is already pretty good," IBC chief executive Toto Nugroho told Reuters.

Indonesia is planning to contribute 7 million rupiah ($459.92) to the purchase of each electric scooter to incentivise sales, which Toto said would result in a demand surge.

"This is what happened in China 10 years ago. Now their (annual) electric motorbike sales have reached more than 30 million," he said.

Indonesia's government is targeting as much as 300,000 units of electric motorbike sales for 2023.

An IBC study found pricing was one of the main issues affecting electric scooter adoption, followed by concern about charging infrastructure and higher interest rates on EV loans, Toto said.

IBC is a local partner for global battery maker giants such as China's CATL Group and South Korea's LG, who are planning to build major facilities in Indonesia to develop batteries.

LG in 2021 started construction of its $1.1 billion battery plant, which Toto said had reached around 70% completion and was on track to start production in 2024.

The plant would have 10 Gigawatt hour capacity which would be enough to power 200,000 electric cars or up to 2.5 million electric scooters.

IBC would also assemble its own battery packs which could help lower the price of its electric bikes by around 15%, Toto said.

($1 = 15,220.0000 rupiah)

(Editing by Martin Petty)