Impact of Electric Vehicles Adoption and Development on Indonesia's Green Economy Progress (Available in English Only)
The report analyzes the impact of electric vehicle (EV) adoption and development on Indonesia’s Green Economy Index (IGEI), emphasizing the role of EVs in achieving the country’s net zero emissions target by 2060. The Indonesian government has integrated EV adoption into its long-term development plans, such as RPJPN 2025-2045 and the National Industrial Development Master Plan (RIPIN) 2015-2035. Key findings suggest that transitioning from fossil-fuel-based transportation to EVs can significantly reduce greenhouse gas (GHG) emissions, lessen dependency on oil imports, and create new job opportunities in the green economy sector. However, the impact varies based on different scenarios, with the highest benefits observed when EVs are domestically produced rather than imported. The study uses six key indicators from the IGEI to assess the economic, social, and environmental effects of EV adoption, showing that domestic EV production leads to higher GDP, increased labor productivity, and lower unemployment rates.
Despite the potential benefits, challenges remain in ensuring effective policy implementation and infrastructure readiness. The study highlights barriers such as inadequate charging infrastructure, high initial costs, and the need for a well-integrated domestic EV manufacturing ecosystem. Policy recommendations include providing targeted incentives for battery and vehicle production, reducing import dependency, and improving EV-related infrastructure. The report also suggests that government policies should focus on holistic electrification strategies, incorporating energy transition plans that prioritize renewable energy sources for EV charging. While EV adoption alone may not drastically improve the IGEI, it is a critical component of Indonesia’s broader green economy framework, requiring coordinated efforts between the government, private sector, and research institutions to achieve sustainable economic growth.
For further information about this report, please donwload and read the document below (available in English only).