The escalating interest in electric vehicles (EVs) within Indonesia offers entrepreneurs and investors a profitable opportunity to capitalize on this expanding market. Opening an EV charging station can be rewarding, contributing to sustainable development while providing a valuable service to a burgeoning customer base.
Establishing an EVCS can be a great initiative, but it is important to carefully navigate the legal and practical aspects. Proper consideration can be a positive and beneficial decision for the business involved.
The Electric Vehicle Market in Indonesia
Under President Joko Widodo’s (Jokowi) leadership, Indonesia has displayed a solid commitment to advancing the electric vehicle (EV) ecosystem, aiming to commence electric car production by 2024.
The main objective of mineral downstream in Indonesia is to establish a fully integrated EV ecosystem, leveraging the nation’s abundant nickel reserves and other critical minerals.
President Jokowi has set an ambitious target for Indonesia to begin producing electric cars as early as 2024, with a larger goal of manufacturing 600,000 electric vehicles by 2030.
Bahlil Lahadalia, Minister of Investment and Head of the Investment Coordinating Board (BKPM) has also expressed Indonesia’s aspiration to become the first country in Southeast Asia to manufacture electric vehicles within a comprehensive ecosystem, starting as soon as next year.
This extensive development is expected to materialize with the completion of the electric battery plant in Karawang by 2024.
How Does an EV Charging Station Work?
In recent years, electric vehicles have emerged as a solution to diminish dependence on fossil fuels and address environmental concerns. However, the widespread adoption and success of EVs hinge significantly on developing a robust charging infrastructure.
An efficient and accessible charging station network is pivotal in alleviating range anxiety concerns and encouraging consumers to switch to electric vehicles. The availability of EV charging points and wait times are critical for EV adoption.
As such, recognizing the importance of establishing and expanding EV charging infrastructure is paramount to overcoming barriers and promoting the broader acceptance and integration of electric vehicles into everyday transportation systems.
How to Open An EV Charging Station in Indonesia
If you aim to establish a charging station in Indonesia, there are at least four steps to ensure a successful setup:
Establish a PT PMA Company
The first step involves setting up a PT PMA (Penanaman Modal Asing) company. This process entails registering your company with the Indonesian government, obtaining necessary permits and licenses, and adhering to all relevant foreign investment regulations.
Secure Land Acquisition
After establishing your PT PMA company, the subsequent phase involves procuring the land for your charging station.
This entails identifying appropriate sites, negotiating land acquisition agreements, and securing required permits or approvals for land utilization.
Import Charging Station Equipment
With the land secured, the next step is to import the necessary equipment for your charging station. This includes charging stations, electrical infrastructure, and other equipment needed to operate the facility.
Apply for Location and Operating License
Finally, you must apply for a Location and Operating License for your charging station. By adhering to these four steps, you can effectively navigate the process of launching a charging station in Indonesia while ensuring compliance with essential regulations and requirements.
InCorp Indonesia also offers company registration services to help streamline your business setup in Indonesia.
Operating A Charging Station with PLN
Perusahaan Listrik Negara (PLN) is the principal state-owned enterprise (SOE) responsible for managing all facets of electricity provision in Indonesia. Furthermore, PLN extends opportunities for collaboration to individuals or entities interested in venturing into the electric vehicle charging (Stasiun Pengisian Kendaraan Listrik Umum/SPKLU) business.
The government is committed to facilitating SPKLU business permits. The burden-shifting scheme from businesses/activities to the government prioritizes trust, but verification-licensing is facilitated, and supervision is coordinated, transparent, and accountable.
In inviting partnerships, PLN develops a franchising scheme for SPKLU business models with more affordable, commercial, and feasible investment costs.
Licenses Required for EV Charging Stations in Indonesia
Although the precise prerequisites may differ based on the selected business model and local regulations, generally, opening an electric vehicle charging station (EVCS) in Indonesia requires obtaining several licenses and permits. Here’s a breakdown of the key ones:
Business Classification
Businesses that want to set up an electric vehicle charging station must follow certain regulatory classifications.
These include classifications 27201 (Battery Manufacturing Industry) and 35118 (Distribution and Sale of Electricity within One Business Entity), which govern the operation of EV charging stations.
These classifications are now fully accessible to foreign investors, and the registration process can be completed in just a few working days.
AMDAL (Environmental Impact Assessment)
Obtaining the necessary licenses is crucial in addition to regulatory classifications. One such license is the location license, AMDAL (Analisis Mengenai Dampak Lingkungan), which serves as Indonesia’s version of an Environmental Impact Assessment.
This assessment evaluates the project’s environmental impact and determines any required mitigation measures.
IUPTL (Operational License)
Furthermore, an operational license (IUPTL) is granted based on a comprehensive feasibility study, which includes various components such as:
- financial feasibility
- operational feasibility
- interconnection feasibility
- installation location
- one-line diagram
- capacity details
- building schedule
- operational schedule
Does Having an EV Charging Station Business Worth It?
Indonesia’s abundant reserves of critical minerals for EV batteries and the government’s ambitious plan to become a global EV production hub paint a promising picture for the eco-friendly vehicle industry.
If you’re considering venturing into this exciting space, InCorp Indonesia can be your trusted partner for a seamless and efficient experience.
From company registration to obtaining necessary permits such as AMDAL and business licenses, InCorp Indonesia offers expert assistance to guarantee a seamless and efficient establishment of operations within the country.