Conceptual Model for Understanding the Policy Challenges of Electric Vehicle Adoption in Indonesia

Abstract

Indonesian electric vehicle (EV) market has undergone insignificant development as the EV adoption level remains low. Acceleration of EV adoption through better policies and regulations is critical to help to achieve the Indonesian government's commitment to reduce the greenhouse gases (GHG) emissions by 29% in 2030. Understanding the EV market and its structural barriers that dampen the policies bring promising outcomes for delivering the intended results of emission reduction. Moreover, the multi-actor perspectives and interests within the EV market also highlight a dynamic and complex nature, characterizing the system observed. By taking a systems view, this paper aims to analyze the market structure and challenges for government policies to promote EV adoption and explore how these strategies would affect Indonesia's sustainable development using a conceptual approach of system dynamics modeling. The model forms six reinforcing and three balancing loops categorized into five essential aspects in EV adoption: vehicle repurchasing, technology shifting, infrastructure development, and commercial-induced buying for both first-time and repurchased consumers. This result shows that pricing, infrastructure development, and perceived social utility are the most determining factors for increasing willingness to adopt EV. Innovation and education aspects also emphasize a specific role in catalyzing a higher adoption rate.