Indika Energy, Alpha JWC, and Horizons Ventures to Pour 218 Billion Rupiah for EV Company Development

Ilectra Motor Group (IMG) will focus on the development of two-wheeler electric vehicle and its supporting ecosystem

PT Indika Energy Tbk (IDX: INDY) along with Alpha JWC Ventures and Horizons Ventures established a joint venture named Ilectra Motor Group (IMG). The three also invested a total of $15 million or around 218 billion Rupiah in IMG to develop two-wheeled electric vehicles (E2W).

This strategic act was announced in Indika Energy's public expose last week, Friday (5/20). Of IMG's total investment, $7.5 million came from Alpha JWC Ventures and Horizons Ventures, and the remaining $7.5 million is equity investment from Indika Energy. Meanwhile, IMG is Alpha JWC Ventures and Horizons Ventures' first portfolio in the electric vehicle sector.

In his official statement, Indika Energy's Director and Group Chief Investment Officer Purbaja Pantja said, IMG will execute the development of a two-wheeled electric vehicle that has been ongoing for more than a year. In addition, IMG will also develop a supporting ecosystem that is still relatively new through external partnerships.

"We also want to support the government's objective to reach 3.2 million units of electric two-wheeled vehicles by 2035. From a business perspective, this business diversification can boost our non-coal revenue by 50 percent by 2025," Purbaja said.

Chandra Tjan, Alpha JWC Ventures' Co-Founder and General Partner also said that the E2W sector has a lot of potential, however, players in this sector are quite low in numbers, resulting in its lack of adoption. "We intend to bring the best two-wheelers with a holistic ecosystem and experience that can serve millions of riders. Together, we can build a greener and more sustainable world," he added.

On the general note, PT Indika Energi Tbk. (Indika Energy) is a diversified investment company in Indonesia with a main focus on developing sustainable new businesses in several sectors, such as energy, logistics, digital, to green business.

Electric Vehicle

Currently, the electric vehicle market is very promising, considering that Indonesia is a country with the highest penetration of two-wheeled vehicles in the world at 42% based on vehicle ownership per 100 population, and is also the third-largest with 6 million motorcycles sold annually.

Therefore, the market for two-wheeled electric vehicles is projected to grow rapidly, especially since the price is equivalent to that of non-electric two-wheeled vehicles. In addition to lower operating costs, the government is also promoting the use of renewable energy.

In order to top the current market in Indonesia, IMG will introduce its first two-wheeled electric vehicle by the end of 2022. The company to present a fleet that is designed with advanced design and performance, equipped with technology and a supporting ecosystem.

Meanwhile, Horizons Ventures' Portfolio Curator, Frances Kang believes that IMG's holistic approach can create an enjoyable electric vehicle experience while transforming the mobility ecosystem into a greener one. "E2W adoption could offer a cleaner option for millions of two-wheeler drivers in Indonesia. As the car penetration grows and global climate change accelerates, reducing vehicle emissions significantly becomes an urgent mission," he said.

Digital company initiative

A number of technology and investment companies have started to speak up their concerns about the use of electric vehicles in Indonesia. Ride-hailing giants GoTo and Grab are the two which have tested and implemented electric vehicles in its services.

Their commitment to tackling climate change and a green environment has also continued through a number of initiatives. For example, GoTo through Gojek and integrated energy company TBS Energi Utama established a joint venture with PT Karya Baru TBS to develop two-wheeled electric vehicles, battery packaging technology, and battery exchange infrastructure, and electric vehicle financing.

Meanwhile, Grab cooperates with PLN to develop an electric vehicle ecosystem in a few steps starting from the Greater Jakarta area. In Singapore, Grab has partnered with Hyundai to operate a fleet of electric vehicles.

Original article is in Indonesian, translated by Kristin Siagian

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