Indonesia is an important market for electric vehicle manufacturers. In terms of resources, the country is the world’s largest producer of nickel, an essential component in electric vehicle batteries. In terms of market, Indonesia is the fourth most populous country in the world. Its population of 270 million represents a potential market for both two-wheel and four-wheel electric vehicles.
VinFast targets young people with affordable global prices
At the 2024 Indonesia International Motor Show (IIMS), VinFast introduced two reverse steering 5-seater models: the VF e34 priced at around 300 million rupiah (470 million dong) and the VF 5 priced at 250 million rupiah (392 million dong).
VinFast VF e34 reverse steering introduced at IIMS 2024. Unlike the version in Vietnam, the VF e34 here has black rims, black bumper accents, and body-colored B-pillars and C-pillars. Photo: VinFast
According to Nikkei Asia, part of the world’s largest business magazine The Nikkei, this price is less than half the average global price of electric vehicles.
However, Indonesia is an emerging market where monthly wages are only about 3.18 million rupiah (5 million dong), according to the country’s statistical agency. Therefore, the prices of these electric vehicles are still quite high compared to the general income level.
Zachary Mark Hollis, VinFast’s Sales Director for Asia, shared with Nikkei Asia: “Indonesia is the largest automotive market in Southeast Asia. I believe that the electric vehicle market in this country will increase to 50,000 units this year and could reach 100,000 units next year. We want to capture a significant portion of the electric vehicle market in Indonesia.”
VinFast’s models attract attention at IIMS 2024. Photo: VinFast
VinFast also plans to build a factory in Indonesia with a capacity of 50,000 electric vehicles per year. According to Indonesia’s Minister of Industry, VinFast is actively conducting surveys to be able to start construction of the factory within this year.
Hollis added that VinFast will target young customers who own cars for interprovincial daily commuting. The company believes that the Indonesian market has many similarities to Vietnam. Both countries have young populations, an increasing middle class, and the new generation of consumers are very interested in sustainability.
Saskia Halima, who attended the IIMS 2024, visited VinFast’s booth to look for a second car for her family. She wants this second car to be electric. Halima told Nikkei Asia: “Not only VinFast, I am also interested in electric vehicles in general. Electric vehicles don’t need gasoline, are easier to maintain, and are in line with the new trend.”
BYD promises to build a factory in Indonesia
Meanwhile, BYD could be a strong competitor to VinFast in Indonesia. In the short term, the Chinese company will import cars for sale here, but they also have plans for local production in Indonesia. The company representative did not provide more details on this.
BYD introduces Atto 3 at IIMS 2024. Photo: Kompas Otomotif
BYD officially started selling electric vehicles in Indonesia in January. Prior to that, they had entered the TransJakarta public transport system.
BYD’s latest passenger car model, Atto 3, priced at around 515 million rupiah (807 million dong), was also displayed at IIMS 2024. This is the first time the largest electric vehicle manufacturer in China has exhibited at an automotive exhibition since entering the passenger car market.
Hyundai
In addition to BYD, Hyundai is another major player in the electric vehicle market in Indonesia. Based on the announced floor plan, BYD and Hyundai are the two brands that occupy the largest space at the exhibition. According to sales reports in Indonesia, the Hyundai Ioniq 5 was the best-selling electric vehicle in the market in 2023, followed by the Wuling Air EV.
Hyundai Ioniq 5 Batik edition for the Indonesian market. Photo: Kompas Otomotif
A Hyundai sales representative revealed to Nikkei Asia that the company is ready to launch a new electric vehicle at a more reasonable price when BYD enters Indonesia.
The South Korean company revealed that the new Kona Electric will be available in Indonesia at the end of April. This model will have a starting price of 500 million rupiah (784 million dong), much lower than the starting price of the Ioniq 5 at 754 million rupiah (1.2 billion dong).
The Hyundai sales representative said: “BYD offers cheaper models. We understand that Indonesians are looking for affordable products with good quality.” The representative mentioned that the company is studying the market response to the new Kona Electric.
