Challenges in Connecting the Elements of Sectoral System of Innovation for the Development of Indonesia’s Electric Vehicle Industry

Abstract

This study discusses industrial development of electric vehicle (EV) di Indonesia, viewed from sectoral system of innovation (SSI) perspective, with aim to map challenges in connecting the elements of SSI for developing EV industry. This study employed a desk research. The information input was obtained through secondary sources: statistical data, official documents, and scientific references. This study found eight challenges for developing EV industry. First, the institutional challenges: i) fiscal incentives are still insufficient to promote industrial collaboration on EV innovation with universities and R&D institutions; ii) domestic content provision target is still difficult to meet; iii) unreadiness of domestic industry to be involved in the EV supply chain; and iv) slow consumers’ response towards EV program incentives. Next, the knowledge and technological challenges: i) the quality and standards of EVs from domestic R&D efforts are still considered unsatisfactory for commercialization scale; and ii) potential investors have not yet developed adequate interest in domestic EV development. Finally, challenges from the demand aspect: i) the plan to make Indonesia as EV hub in ASEAN region has been hindered due to lack of investors’ participation; and ii) the lack of Electronic Charging Station (ECS) accessibility for EV.