JAKARTA: An Indonesian joint venture is on track to supply two million e-motorcycles to ride-hailer Gojek, a deal Electrum’s top executive told Nikkei Asia is being driven by climate change and rising fuel costs.
Electrum was founded last year by energy group TBS Energi Utama and Gojek, which is itself one half of GoTo, a superapp provider. It’s designed to help Gojek deliver on its promise to make its fleet 100% electric by the end of this decade, which is part of its quest for net-zero emissions.
The new company also aims to help expand Indonesia’s evolving electric vehicle ecosystem – a key policy of President Joko Widodo – by leveraging Gojek’s nationwide presence and TBS’s energy expertise.
In February, Electrum partnered with Pertamina, the state-owned energy company, and Gogoro, a Taiwanese manufacturer of battery-swap electric scooters, to expand the Southeast Asian country’s EV infrastructure and supply Gojek with zero-emission vehicles. The collaboration includes Gesits e-bikes manufactured by the state-owned Wika Industri Manufaktur.
Pandu Sjahrir, President Director of Electrum and Vice President Director of TBS, said in a recent interview that he needed a potential game changer, so he turned to an innovative solution. He expressed confidence that the company will thrive as the global community becomes more concerned about climate change and looks for ways to respond.
Electrum operates 13 battery swapping stations in Jakarta and has so far supplied Gojek with around 300 electric motorcycles that have traveled almost two million kilometers. “That’s very rapid adoption,” Sjahrir said, “which means the product is a good fit for the market; People like to use these bikes.”
Although Gojek aims to be fully electric by 2030, Sjahrir wants to make the switch “as soon as possible”. However, he added that to speed up the pace significantly “would probably need some sort of government public policy support.”
Gojek, which co-founded GoTo last year with e-commerce company Tokopedia, has more than two million registered drivers for its Indonesian ride-hailing and delivery services, which mostly use motorcycles but also cars.
Indonesia, a sprawling archipelago of more than 270 million people where motorcycling is the primary mode of personal transportation, has recently been hit by a roughly 30% rise in fuel prices. Demonstrators took to the streets of Jakarta to vent their frustration, protesting outside parliament and central government offices to demand that the increase – the result of the government’s cut in subsidies – be scrapped.
The more expensive fuel hasn’t had a major impact on the ride-hailing business yet, Sjahrir said. “But over time, with more gas price increases, there will be more movement towards electric vehicles just because it’s a lot cheaper.”
This emerging shift comes as the government makes a major push to bolster the country’s position as the world’s leading supplier of nickel, a key battery material for electric vehicles. The intent is to boost a domestic battery and electric vehicle industry, but it also has the goal of achieving net-zero carbon emissions by 2060.
Regarding Indonesia’s plan to move its capital from Jakarta to Nusantara on the island of Borneo, Sjahrir, who is also the founder of venture capital firm AC Ventures, expressed conditional interest in investing in the move.
“I was asked for an opinion by them and said we would like to invest,” he said. “Just give us the go-ahead.”
The government, which plans to transfer key functions in 2024, is urging foreign governments and companies to pour money into the new city’s development. It recently held several meetings with potential foreign investors, including Taiwan’s Hon Hai Precision Industry, better known as Foxconn, and South Korean steelmaker Posco.
Construction is expected to cost 466 trillion rupiah ($31 billion). Officials want 80% of that to come from outside, particularly from private sectors and governments of wealthy countries. But it’s encountering new headwinds in the form of more expensive materials and rising interest rates.
Sjahrir stressed that ultimately it was up to Indonesia to be the catalyst.
“The most important thing is that we Indonesians invest,” he said.