When President Joko "Jokowi" Widodo gathered rectors of local universities at the State Palace in Central Jakarta in October, he lamented two things: the fact that there are so few Indonesian universities in the world's top 500, and the lack of local technology ready for industrial-scale production.
Research, Technology and Higher Education Minister Mohamad Nasir may have to spend many more sleepless nights to find an answer to the first, but he made the president smile with a swift response to the second. A few weeks after that meeting, Nasir returned to the State Palace with 10 production-ready scooters – Indonesia's first electric two-wheeler fully developed by local engineers.
Garansindo Group signed a memorandum of understanding with the Surabaya Institute of Technology (ITS) in June 2015 to kick-start a collaboration that would result in Indonesia's first electric motorcycle.
The collaboration resulted in Garansindo Electric Scooter ITS, or Gesits, an electric scooter powered by a 5,000-kilowatt-hour lithium-ion battery, capable of doing 70 kilometers on a single charge, and which will be ready for production next year.
Overseeing the development is Harun Sjech, chief executive of PT Gesits Technologies Indo (GTI), a subsidiary of Garansindo. Having spent most of his professional career in the automotive sector and having attended hundreds of industry meetings and exhibitions across the world, Harun noticed a peculiar thing about the Indonesian motorcycle market.
"It was rare for an economy like Indonesia to have its local motorcycle market dominated by foreign manufacturers. There are at least one or two local brands carving out some slice of the market," he said.
To start building a combustion-engine motorcycle in Indonesia would be a suicidal move against established market leaders Honda, Yamaha and Suzuki. But the electric bike industry is in its infancy, with large and small manufacturer alike seeking an angle to make use of cheaper and lighter materials for motorcycle parts and rapid development of lithium-ion battery technology.
"This is a level playing field for all industry players. If Indonesia would like to have a chance at its own motorcycle brand, this is it," Harun said.
The global market for electric motorcycles and scooters is estimated to be worth $16.2 billion this year, accounting for about an eighth of the total global sales of two-wheelers, according to an estimate by Delaware-based research firm Global Market Insights. The market for electric motorcycles and scooters is expected to grow 5 percent annually to $21.8 billion by 2024, according to the report.
The Indonesian Motorcycle Association (AISI) has set a sales target of 2.1 million electric motorcycles and scooters, or about a third of the current market, by 2025.
Garansindo started out with seed capital to get ITS to develop a prototype. Later, the research and technology ministry chipped in, pouring in research grants to make up the bulk of the $1 million development cost, Harun said. "Minister Nasir was very instrumental in the development, and we are very grateful to him for providing the resources."
The result was convincing enough to draw some state-owned enterprises to join up. Wijaya Karya (Wika), through its subsidiary Wika Industri & Konstruksi, established a joint venture with GTI for the construction of a manufacturing and assembly plant in Cileungsi, West Java.
The plant makes several parts for the scooter, such as the fork, while the assembly lines can produce 50,000 motorcycles a year.
Weapons manufacturer Pindad supplies the electric motor, while state-owned electronics manufacturer LEN Industry will make the electronic controller that regulates the scooter's power, speed and battery level.
State energy company Pertamina and Sebelas Maret University in Solo, Central Java, developed the lithium-ion battery cells to fit into the battery pack that ITS developed for the scooter. Pertamina will produce the battery and set up battery swapping stations across the country, marking a strategic pivot to electric mobility.
"Our market share mainly comprises the transportation sector. We do not want to lose any customers because of the potential shift in the future automotive market from internal combustion engines to electric vehicles," said Andianto Hidayat, vice president of planning and commercial at Pertamina Research and Technology Center, the energy firm's research and development arm.
And at the heart of an integrated digital ecosystem in which the Gesits scooter will operate is Telkomsel, Indonesia's largest mobile operator. After all, the bike will come with a smartphone application that acts as its starter key. Telkomsel developed the app, which will be used to turn the bike on or off, track its route, locate the nearest battery recharging or swapping station, automatically lock the two-wheeler and reveal its location if the scooter is stolen.
Harun said GTI would run a subscription model through the app, allowing the scooter owner to rent a battery, buy insurance or obtain other perks, such as regular maintenance, which is already at a minimum because the scooter has fewer moving parts than its combustion-engine rivals.
"This subscription means bike owners do not own the battery, but it also allows us to offer the scooter at a competitive price, comparable to 125 cc scooters in the market today," Harun said, indicating that the selling price of the Gesits may start at below Rp 20 million ($1,380).
The app also opens opportunities for a wealth of service offerings, ranging from financial services, including payments, loans and insurance, to marketing and e-commerce, Harun said. "This is where the true opportunities lie."
GTI so far has standing orders for 10,000 from the Bali provincial government and 5,000 units from Telkom Indonesia. Air Chief Marshal Hadi Tjahjanto, the head of the Indonesian Military (TNI), also expressed interest in ordering a few thousand Gesits scooters for use by village military advisors.
Harun believes GTI could sell 40,000 scooters when production starts next year, while Wika has already laid out plans to double the plant's production capacity to 100,000 units per annum over the next few years.
Jokowi meanwhile, was so impressed with the scooter that he said he would like to be the first to purchase 100 of them. Harun said he is looking forward to filling that order soon.