11/28/23, 9:21 AM Indonesia’s early EV pioneers are making ground but vulnerable to disruptors

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Putra Muskita · 1h ago · 7 min read

Indonesia’s early EV pioneers are making ground but vulnerable to

disruptors
Pandu Sjahrir has had a front-row seat to the rise of Indonesia’s tech scene. Born into a
prominent family with connections in politics and the coal mining industry, Sjahrir is a
commissioner for Shopee’s parent Sea Group in Indonesia, a board member for ride-hailing
giant Gojek, and a VC firm founder, among other roles.

Now he has hitched his horse to a different wagon: electric vehicles. His newest role is CEO of
EV startup Electrum, which counts GoTo as a founding investor.

Sjahrir believes EVs are not only a growth rocket ship, but one that has plenty in common with
some trailblazing industries, especially ecommerce.

The government has seen the EV sector “succeed in other parts of the world like China and
India, where EV adoption is going very strong, and the benefit to society is very high,” says
Sjahrir, who is also founding partner at Jakarta-based AC Ventures, in an interview with Tech in
Asia.

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Image credit: Timmy Loen

But ecommerce comparisons may also mean a warning to heed. In late 2015, Lazada did the
important groundwork for ecommerce, such as setting up fulfillment routes in Southeast Asia as
it aimed to reach US$1 billion in gross merchandise value (GMV) for the first time.

Once early players laid the groundwork for consumer education, payment methods, and logistics
networks, Shopee – the region’s current ecommerce leader – swooped in with its war chest to
blow the competition out of the water.

Last year, its GMV reached US$47.9 billion – nearly 50x Lazada’s 2015 figure.

Will this also happen to the EV space? While consumers are increasingly aware of EVs, they’re
not yet purchasing these in droves.

In other words, early movers have to build the infrastructure as well as design and manufacture
the vehicles – while at the same time figure out what their buyers actually want. That leaves
these players at risk to the same factors that saw Lazada leapfrogged by its closest competitors.

Swapping or charging?
For Raditya Wibowo, co-founder and CEO of Maka Motors, the area he sees as risky is EV
batteries.

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The shape and price of an e-motorcycle are dependent on the battery pack’s shape and size,
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Newswhose company raised US$37 million in seed funding earlier this year from
explains Wibowo, CORE

the likes of East Ventures and Sjahrir’s AC Ventures.

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Charging is another challenge as it takes a longer time than filling up a gasoline tank – even the
fastest charger can still take about 20 minutes. That’s not ideal when trying to convince
consumers that switching to EVs will benefit them.

One alternative is a battery swap, which happens pretty much instantaneously. But for
consumers to consider battery swap reliable, there must be enough stations with fully-charged
spare batteries at any time.

Maka Motors co-founders Arief Fadillah (left) and Raditya Wibowo / Photo credit: Maka Motors

“The challenge with making that happen is you need a lot of capex because the battery itself is
half the price of the motorcycle,” shares Wibowo. In perhaps the most extreme example, Volta’s
cheapest e-bike model costs around 12 million rupiah (US$771). Its battery costs 7.5 million
rupiah (US$482).

In the beginning, the industry may need as many as one spare battery for every e-motorbike
produced, Wibowo estimates. But “over time, the ratio will decrease with scale.”

See also: Indonesia courts Tesla but faces EV roadblocks

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11/28/23, 9:21 AM Indonesia’s early EV pioneers are making ground but vulnerable to disruptors

Another key hurdle is that the shape and specification of the battery pack aren’t uniform.
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CORE

“The thing with batteries is that they’re not necessarily fungible between different vehicles,” he
explains.
P R E M I U M “Some
V I have
S U A L Sdifferent
V I D voltages,
EOS capacities,
P R E S S R E L E and
A S E Sform factors
C A T E G Oas
R I well.”
ES MARKETS

Kitting out a charging station with a sufficient number of batteries that are charged and fit the
specification of the visiting bikes is no easy task – and one that could be ripe for disruption from
newcomers in the future as we saw with the ecommerce challengers.

Chicken-and-egg question
Compared to ecommerce, one major difference is the EV industry being heavily dependent on
government support, where “40% to 50% of successful adoption actually relies on government
policy,” Sjahrir says.

Still, the winds of change in Indonesia are blowing in favor of the EV industry. Sjahrir notes that
the government has high stakes in the EV space. The reason? Fuel subsidies, on which the
government spent US$3.8 billion in the first half of 2023 alone.

Should EVs take off at scale in Indonesia, there’s likely to be more political capital for the
government to lower fuel subsidies over time and redirect the funds to more productive uses.

See also: Selex Motors bets on battery swapping to lead Vietnam’s EV revolution

For now, that is still hypothetical. Even in much more mature EV markets like the US and China,
fossil fuel subsidies still make up large portions of the national budget.

That aside, scaling also means resolving the charging-versus-swapping question. The
government could step in and order companies to use a particular method, or one player scales
to dominance, forcing others to adopt its approach.

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Comparing gasoline and electric motorcycles in Indonesia1

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Energy cost/100
Type Range Power Price (excluding subsidy)
km
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16 million-17 million rupiah

(US$1,028-US$1,092) for
new entry-level bikes
25,000-30,000
Gasoline 250 km on full 32 million-34 million rupiah
110-155 cc rupiah (US$1.6-
motorcycles tank (US$2,056-US$2,185) for
1.9)
new premium bikes

~8 million rupiah (US$514)

for used entry-level bikes

Affordable 40-50 km on full 6,000 rupiah

<100 cc 16 million-19 million rupiah
electric charge (1.5-1.6 (US$0.39) on
equivalent (US$1,028-US$1,221)
motorcycles kWh battery) charging model

100 km on full 6,000 rupiah

Premium electric 125 cc 42 million rupiah (US$2,699)
charge (3.7 kWh (US$0.39) on
motorcycles equivalent or higher
battery) charging model
Source: Maka Motors

There’s precedent for both. In the US, Tesla was the first to scale the supercharger network, and
charging eventually became the North American standard.

Conversely, Gogoro was the first to scale battery-swapping infrastructure in Taiwan, and other
original equipment manufacturers then launched products with the exact same battery type.
Meanwhile in South Korea, the government regulated the battery specifications for swapping.

Perhaps the more relevant examples come from China and India, which, as Sjahrir wrote, can
provide a blueprint for Indonesia. On a trip to Shenzhen and Bangalore, he learned that “while
investments significantly influence the speed and direction of the energy transition, government
directives are just as critical.”

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Photo credit: Gogoro

In both markets, swapping hasn’t materialized at scale, Maka’s CEO Wibowo notes. China
already has an EV charging standard. While India’s policy is more chaotic, it appears committed
to charging instead of swapping.

“At least in India, the general consensus is that when they tried swapping, it was hard to scale
outside of certain use cases,” he says. “It could work in B2B use cases, for example in logistics
companies, but for retail, you need them everywhere.”

Less risky?
Maka Motors is firmly on the charging bandwagon as, in its view, it’s the more scalable method.

In Indonesia, EV players can decouple the vehicles from the infrastructure. In other words, the
battery shape and specifications can vary as long as the motorcycle has the right charging plug.

On the other hand, the payback period for battery swaps is “a bit longer than what we’re willing
to take the risk on,” Wibowo adds.

See also: Mapping SEA’s electric vehicle players

“It all comes down to the cost of energy,” he says. “If you do battery swaps and make customers
cover the cost of your capex investment in batteries, you may end up not competitive with the

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price of gasoline.”
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CORE

Competing against the status quo of gasoline-based motorcycles is very much key. But whether
it’s
P R E swapping
MIUM or
V Icharging
SUALS orVother
I D E O Smatters,
P R EElectrum’s
S S R E L E A S ESjahrir
S Cbelieves
A T E G O R there
IES will always
M A R K Ebe
T Srisks,

so EV players shouldn’t “focus on competitors, but focus on yourself: Are you bringing the best
value?”

Indeed, Wibowo’s focus remains on building a motorcycle that is uniquely suited to the
Indonesian market. During his talk at this year’s Tech in Asia Conference, he mentioned that
Indonesian consumers commute long distances – with daily averages close to 100 kilometers –
on chaotic roads, often transporting more than one passenger at a time, or oversized packages.

Pandu Sjahrir, founding partner of AC Ventures and CEO of Electrum/ Photo credit: Pandu Sjahrir’s Facebook page

“Consumers want to save money by going electric, but they won’t settle for a less capable or
significantly more expensive motorcycle,” he said at the event. Hence, Maka’s goal is to produce
electric motorcycles that are affordable but with the same range and power.

Taking this strategy is perhaps akin to how Tokopedia stayed competitive with Shopee by being
razor-focused on its home market vs. a one-size-fits-all regional play.

Of course, it doesn’t hurt that the country is a top nickel producer with an established
automotive manufacturing sector.

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See also: Pandu Sjahrir, Indonesian tech’s power broker, on his next act: energy
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News transition CORE

“We’ll
P R E M I Usee
M howVthis
I S U Aplays
LS outV in
I D Eone
O S to two
P R years,
E S S R Ebut
LEASmy
E S view CisA [charging
T E G O R I E S vs. swapping]
M A R K Edoesn’t
TS

necessarily disadvantage existing players against new players,” Wibowo says. “It does end up a
disadvantage if you’ve invested too much in a strategy that turns out to not scale.”

As far as the Indonesian government goes, however, it’s hard to tell what will transpire until it
actually happens. Try asking TikTok, which looked like the king of the ecommerce hill until a
month ago, when it lost its foothold in Indonesia entirely. Tech has a habit of changing quickly
and unexpectedly.

Currency converted from Indonesian rupiah to US dollar: US$1 = 15,56o rupiah.

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TIA Writer
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Putra Muskita
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Covering ecommerce and fintech for Tech in Asia. Drop me a line: 1putra.muskita@techinasia.com or
Twitter @putramuskita.
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Stefanie Yeo · 16h ago · 5 min read

Zalora, we still know ya

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Hello reader,

When I first started online shopping over a decade ago, Zalora was one of the hottest platforms
in town. I remember browsing the site on my laptop when I was bored during school lectures,
talking about sales with my friends, and getting very excited whenever a package arrived.

Given its easy returns process and relatively low requirements for free shipping, I spent a lot of
my money on Zalora back then. But more ecommerce platforms have emerged since then, so I
haven’t been shopping on Zalora that much in the last few years.

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Aside from marketplaces like Shopee, Lazada, and Shein, brands have also made it easier than
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ever to order from them directly. Uniqlo and Cotton On, for example, have pretty strong online-
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to-offline ecosystems.
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While there’s definitely more competition nowadays, this doesn’t mean Zalora’s down for the
count. My colleague Melissa takes a closer look at the firm in our featured premium story.

Today we look at:

Why Zalora’s still going strong

Singapore’s new safeguards for crypto investors

Other newsy highlights such as the reason behind Sam Altman’s ouster from OpenAI and
Amazon’s lead in the US holiday shopping scene

Premium summary
Get in losers, we’re going shopping

Image credit: Timmy Loen

Zalora came onto the ecommerce scene in 2012, and would go on to popularize online shopping
for a whole generation of young adults. It’s still going strong a decade later, but it’s fallen behind
newcomers like TikTok Shop and Shein.

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The P word: Zalora may not claim the top spot among ecommerce platforms in Southeast
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Asia, but it is profitable. In 2022, it reported a positive adjusted EBITDA margin of 0.7%.CORE

Business matters: Its B2B business, which helps brands expand into Asia by providing
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even digital C AT E G O R I E S
marketing services, is gaining a lot ofMtraction.
ARKETS

Unlocking value for brands that sell through its platform will continue to be a big part of
Zalora’s strategy.

Ooh, package: A small but growing part of Zalora’s revenues also comes from a loyalty
program that it launched in May, which is aimed at driving stickiness and more
transactions to the platform. So far, members of the program have tripled their order
frequency and are spending 2x to 3x that of non-members.

Read more: Now profitable, Zalora bets on B2B, subscriptions for growth

News spotlight
New rules

Image credit: Timmy Loen

The Monetary Authority of Singapore (MAS) has announced new investor protection measures
for service providers of cryptocurrency or digital payment tokens (DPT). These would include
crypto exchanges, stablecoin players, and traditional financial institutions.

What’s this about? The regulations, which will be implemented in phases beginning
mid-2024, focus on business conduct, consumer access, and technology and cyber risk

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management.
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What you gotta do: Under the new rules, providers need to identify, mitigate, and CORE

disclose conflicts of interest. They must also publish policies governing the listing of DPTs
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and set up proceduresVfor
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handlingPcustomer
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resolving disputes.

Safe access: Consumer access measures also have to be outlined to “discourage

cryptocurrency speculation.” This includes assessing a customer’s risk awareness,
refraining from offering incentives for trading in crypto, and avoiding financing and
leverage transactions.

See also: Malaysian court order against Luno causes concern across crypto firms

Tech in Asia’s Regional Founders Meetup: Singapore

Join Tech in Asia’s 11th and final meetup of 2023!

Calling all Singapore-based founders! As 2023 comes to a close, we’re gearing up for our final
Founders Meetup of the year in the Lion City, where it all began.

By popular demand, Tech in Asia founder and CEO Willis Wee will talk about his startup
journey, which has culminated in an M&A deal with SPH Media, in a fireside chat moderated by
our COO Maria Li.

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Join us on December 5 at Mortar & Pestle to get a candid look at what goes on behind the scenes
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to pull off anNews

M&A deal, and take home key insights that will help you best navigate and CORE

understand the M&A process if you choose to go down this route.

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Don’t miss this chance to learn, connect, and have fun with your fellow founders – including our
own Willis – as we conclude this year’s Regional Founders Meetup event series with a bang!

Get your tickets now before they run out!

A big thanks to our supporting partners – AWS, CleverTap, Cooley, Oracle, Sinarmas Land,
Singapore Global Network (SGN), Quest Ventures, and Purple Quarter – for making this meetup
possible.

Note: This event is closed-door and strictly off the record – no media buzz, please! While Willis
and Maria will share as much about the M&A deal as possible, confidential terms will not be
disclosed.

Quick bytes
1️⃣ No exit route
US prosecutors are requesting a court to revoke permission for Changpeng Zhao, founder of
Binance Holdings, to return home to the United Arab Emirates. The crypto executive had pled
guilty to violating anti-money laundering laws in the US.

2️⃣ In Amazon’s dust

Nine out of ten US visitors on Temu’s and Shein’s websites during the holiday season don’t buy
anything. As of October, both retailers had a 4.5% and 4.1% conversion rate, respectively. In
contrast, Amazon leads holiday shopping with a 56% conversion rate.

3️⃣ That does sound worrying

The decision to oust Sam Altman as CEO came after OpenAI received a warning from staff
researchers about an AI discovery that could potentially harm humanity, according to sources.
However, Altman has been reinstated as CEO just days after his dismissal amid uproar among
OpenAI’s staff and investors.

4️⃣ Level up
Mastercard and Singapore’s Nanyang Technological University (NTU) have launched a program
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to improve resilience against cybercrime in Asia Pacific. Called the NTU-Mastercard

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FlexiMasters in Cybersecurity & Digital Trust, it is aimed at mid-career professionals. CORE

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Edited by Eileen C. Ang

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