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.

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.

The shape and price of an e-motorcycle are dependent on the battery pack’s shape and size, explains Wibowo, whose company raised US$37 million in seed funding earlier this year from the likes of East Ventures and Sjahrir’s AC Ventures.

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.

Chicken-and-egg question

Less risky?