A Comprehensive Analysis of the Economic Implications, Challenges, and Opportunities of Electric Vehicle Adoption in Indonesia

Electric vehicles (EVs) are a recognized solution for lowering greenhouse gas emissions and decreasing oil dependency, especially in Indonesia. Existing studies have explored the economic impact, challenges, and opportunities of EV adoption separately, lacking a holistic analysis. This study addresses this gap by providing a comprehensive assessment of the economic implications, challenges, and opportunities of EV adoption in Indonesia through a systematic literature review of 65 peer-reviewed articles, industry reports, and reputable publications from 2016 to 2024. The document analysis involved keyword-based literature selection, content analysis of economic metrics, and synthesis into key thematic areas. The findings reveal that EV sales in Indonesia have been rising annually, influenced by cost, driving range, environmental impact, technological features, charging infrastructure, battery, and government policies and incentives. EV adoption has positively impacted Indonesia’s GDP, attracted Foreign Direct Investment (FDI), created jobs, and reduced fuel consumption and imports. However, several challenges persist, including high EV costs, inadequate charging infrastructure, societal readiness, battery replacement costs and waste management, and limited model variety. Despite these challenges, opportunities exist in the form of market growth, FDI from nickel resources, energy security, job creation, and industrial expansion. Recommendations for creating a conducive EV ecosystem are provided for relevant stakeholders.