Indonesia's NFC, SiCepat launch electric motorbike partnership

JAKARTA — NFC Indonesia, a digital services company, is teaming up with SiCepat Express, a fast expanding delivery company, as new entrants in the electric motorbike industry, with plans for everything from bike manufacturing to battery stations.

The NFC-SiCepat joint venture, Energi Selalu Baru, will acquire a majority stake in Volta Indonesia Semesta, an electric bike maker based in Semarang, the capital of Central Java Province.

“Some might see us as being rash with our entry into this business, but we’re not entering empty-handed,” NFC President Abraham Theofilus said at a press briefing on June 10, the day after the joint venture was announced.

“First, there is no incumbent player yet, no one has become very strong in this business — especially in Indonesia,” he said. “So the potential and competition are still quite open. Second, we’ve seen some orders already.”

Theofilus said that SiCepat will start off with an order for 5,000 machines, and is expected to place larger ones in the coming years as its fleet of couriers expands. They use two-wheelers to zip along roads and down narrow alleys delivering e-commerce packages across the country.

Orders have also been placed by a ride-hailing company that Theofilus declined to identify, and by some regional and local governments.

In an effort to encourage electric vehicle purchases, the central government has reduced taxes for low-emission vehicles to make them more affordable. It also plans to replace vehicles used by government officials with electric models.

NFC said in a news release that Volta’s electric motorbikes are currently in “beta-testing with government agencies and a few private enterprises” and are expected to be ready for “mass market access” before the end of this year.

As elsewhere, a major obstacle in developing the electric vehicle market in Indonesia is the lack of supporting infrastructure. There are only a limited number of battery charging and swap stations, even in the capital Jakarta. The energy ministry reported that by April only 122 charging stations were in place for a country of more than 270 million people.

NFC and SiCepat want to tackle that shortcoming by tapping their vast network of retail and logistics partners right across the world’s largest archipelago. Many of these operations have premises that could be used for charging and swapping batteries.

Through its subsidiary Digital Mediatama Maxima, NFC has provided cloud advertising and other digital services to tens of thousands of retail outlets in Indonesia including Alfamart stores and the Sampoerna Retail Community.

“Those are the main infrastructure points that we can empower to [provide] battery swap stations and after-sales services later,” said Stanley Tjiandra, NFC’s head of investor relations. “I don’t think it is easy to have such a large infrastructure, so we have an edge.”

Tjiandra sees the opportunity to become “one of the leading pioneers for electric vehicles in Indonesia.” He said NFC plans to spend up to 100 billion rupiah ($7 million) in capital expenditure this year, but did not reveal specific investment figures for the electric bike project. NFC also has plans to develop digital platforms and internet technology to support electric motorbike sales and battery services.

NFC’s share price fell 5% to 5,750 rupiah on Thursday following the announcement and lost a further 7% to 5,350 rupiah on Friday, but has still risen 134% since the beginning of the year.

Indonesia has the world’s largest reserves of nickel — an essential component in EV batteries. It is keen to promote battery manufacturing alongside development of the EVs. The government has set up the Indonesia Battery Corporation in partnership with South Korea’s LG Group and China’s Contemporary Amperex Technology to develop local battery manufacturing capacity.

In April, Energy Minister Arifin Tasrif announced plans for the construction of over 3,800 charging stations and 17,000 battery swap stations by 2025. The ministry had earlier said it expects to see 19,000 electric automobiles and 750,000 electric motorcycles on the roads by 2025.

Industry analysts have said electric motorcycles should do well in Indonesia because of their affordability compared to other EVs. Motorbikes are the most common form of private transport in Southeast Asia’s largest economy. The Central Statistics Agency reported 112.8 million motorcycles on Indonesia’s roads in 2019 compared to 20.8 million cars.

Consultancy McKinsey & Company last month projected nearly 4 million two- and three-wheeled electric vehicles on Indonesia’s roads by 2030 and about 1.6 million electric cars.

“Our analysis suggests that fuel imports could be cut by $100 million a year for every one million electric cars on the country’s roads,” McKinsey said. “Efforts should be made to encourage this transition through incentives for buyers and manufacturers, as well as support for R&D efforts.”

Other local manufacturers of electric motorbikes in Indonesia include state-owned joint venture Wika Industri Manufaktur with its brand Gesits, Viar Motor Indonesia and Katalis Company.

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