Lembaga Penyelidikan Ekonomi dan Masyarakat – Fakultas Ekonomi dan Bisnis – Universitas Indonesia

Estimating the Total Cost of Ownership (TCO) of Electri?ed Vehicle in Indonesia

Januari 17, 2020

Abstract

With the Electri?ed Vehicles (EVs) ventures being in the early stage, the cost-bene?t analysis of the vehicles is key towards capturing the Indonesian market. As consumers, however, pricing may not only be the costs they consider; they also consider the total cost of ownership (TCO) of the cars they purchase. With that regard, this study discusses the total cost of ownership (TCO) of the EV in the Indonesian context, including calculations for HEV (Hybrid Electric Vehicle), PHEV (Plug-in Hybrid Electric Vehicle), and BEV (Battery Electric Vehicle), as well as Internal Combustion Engine (ICE) vehicles for comparisons. Speci?cally, this study aims to: (i) identify the monetary factors which affects total cost of ownership (TCO) of electric and conventional cars in Indonesia, (ii) construct a TCO model and calculate the value of total cost of ownership of electric and conventional cars in Indonesia, and (iii) compare the value of total cost of ownership of electric and conventional cars in Indonesia related to the relevant switching cost between EVs and ICE. Our ?ndings suggest that generally, in Indonesia, higher usage and/or length of ownership of EVs lead to more competitiveTCO compared to ICE. We also explore a comprehensive number of scenarios (e.g., total annual mileage, years of ownership, price, fuel prices, and cost incentives) in which the TCO of EV maximizes Indonesian consumer welfare.

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