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Between 1950 and 1970, the global vehicle population doubled roughly every 10 years. Estimates anticipate that the world's fleet will reach 2 billion motor vehicles by 2020 (up from 1 billion in 2010), with cars representing at least 50% of all vehicles. In 2018, the global electric car fleet exceeded 5.1 million, up 2 million from the previous year. While this figure is relatively low, various scenarios quoted by the International Energy Agency anticipate that by 2030, electric vehicle (EV) sales will range between 23 million to 43 million per annum, with the stock ranging from 130 million vehicles to more than 250 million. In Indonesia, Toyota has announced plans to invest up to USD 2 billion to develop EVs over the next four years, focusing initially on hybrid vehicles, with a view to transitioning to developing full EVs.

Against this background of anticipated rising demand, the president of the Republic of Indonesia has signed the long-awaited presidential regulation on Battery Electric Vehicles (BEV): Presidential Regulation No. 55 of 2019 on Acceleration of Battery Electric Vehicles Program for Road Transportation (PR 55/2019). This came into effect on 12 August 2019. The aim of this regulation is to accelerate the BEV program for road transportation by granting fiscal and non-fiscal incentives to industry players.

In this alert we will see what the new regulation is all about, including new opportunities for the electronic sector.

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