Political economy analysis of the electric vehicle value chain in Indonesia

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Fahreza Surya

Written by Neil McCulloch and Ilham Rizqian Fahreza Surya. Neil McCulloch is a Director of The Policy Practice, a global lead in Political Economy Analysis; Ilham Surya is an Environmental Policy Analyst at the Institute for Essential Service Reform in Indonesia. This work was part of a broader exercise led by E3G to conduct a Political Economy Mapping of Indonesia’s position on climate action.

 

TPP Director Neil McCulloch worked with the international climate change think tank E3G and the Indonesian think tank the Institute for Essential Services Reform to explore the political economy of the electric vehicle (EV) sector in Indonesia. The report looks at the huge growth of the EV value chain in Indonesia, from nickel mining, through processing, to battery and EV manufacturing. It highlights the key constraints to the further development of the sector including:

  • reputational damage due to the environmental harm of mining and processing;
  • challenges in accessing major Western markets;
  • fiscal constraints and competing priorities under the new government;
  • and the active promotion of a different, multi-fuel model by existing Internal Combustion Engine manufacturers,

And suggests ways in which external partners could work with Indonesia to support the resolution of these issues.

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