Markov Chain and Techno-Economic Analysis to Identify the Commercial Potential of New Technology: A Case Study of Motorcycle in Surakarta, Indonesia

Abstract

LiFePhO4 (lithium iron phosphate) batteries, with their advantages compared to common current motorcycle batteries, are considered as an alternative in substituting wet and dry cell battery. The huge demand for motorcycles along with their batteries in Indonesia also make them an interesting product for business. To assess the commercial potential for such a new technology, market share needs to be estimated as well as the techno-economic feasibility. Hence, market share prediction using the residents of Surakarta Region and techno-economic analysis using Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period (PP) indicators were conducted in this study. Calculations using Markov chain method show that lithium iron phosphate batteries tend to dominate the market after certain period. Techno-economic analysis also finds that the commercialization is feasible in three conditions: first mover, even with market leader and equilibrium point. Therefore, there is a great commercial potential for lithium iron phosphate batteries, especially in Indonesia.