Reasons Why Electric Cars Are Expensive and Solutions to Overcome It

The automotive industry in Indonesia has been developing quite rapidly over time. Not only the development of conventional cars, Indonesia has also become one of the target markets for electric cars that have been produced as vehicles with alternative energy. However, the main issue in the process of selling electric cars is the price.

Electric cars are considered better than conventional cars because they can reduce emissions and are also cheaper. The question of why electric cars are expensive is still often discussed in relation to the distribution of this alternative energy vehicle in Indonesia. So, why does this contradict the goal of producing electric cars?

Reasons Why Electric Cars Are Expensive

The main advantage of electric cars is closely related to energy use and environmental sustainability. However, electric cars are still in the development stage, so there are still many issues that need to be addressed regarding their use. Here are some reasons that make electric cars still expensive.

1. Battery Prices

The battery in electric cars is the component with the most significant cost. Its value can reach one-third of the total production cost. The components that make up the lithium-ion battery must be designed large enough for the car to travel long distances. Therefore, battery development continues to minimize battery costs.

The most expensive component in every cell is the cathode, one part of the two electrodes that store and release electrical energy. The raw materials for cobalt, nickel, lithium, and manganese that form the cathode are still relatively expensive. This is because the raw materials need to be mined, processed, and converted into high-purity chemical compounds.

2. Lack of Charging Stations

Unlike conventional vehicles, electric vehicles, or more specifically electric cars, require a longer charging time. According to an article from detikoto, Indonesia should already build charging stations for electric vehicles.

Every public electricity charging station is also required to have standards related to voltage limitations, ensuring no leaks, and so on. In Japan, there are already 28,000 charging stations so that each vehicle manufacturer does not need to create their own charging stations, making the price of electric cars relatively cheaper.

3. Complicated Vehicle Licensing

Not only from the production side, Indonesia is also known for its layered administrative procedures. Electric cars are classified as imported vehicles that are still subject to taxes and complicated vehicle document processing.

In October 2020, one article from viva.co.id still quoted explanations regarding the issuance of the vehicle registration certificate (BPKB) for electric vehicles. Referring to the Chief of Police Regulation number 5 of 2012, the requirements for issuing BPKB for fully imported motor vehicles are as follows.

- Attachment of identity proof

- Invoice for BPKB

- Customs notification documents for imported goods

- Import declaration letter for vehicles certified by customs officials

- Type Test Certificate and Type Test Registration Certificate

- VIN Certificate and/or NIK Certificate from the brand holder agent

- Results of physical inspection check

The submission of these requirements for the BPKB issuance process will certainly take time. Therefore, the process of vehicle ownership will become increasingly expensive. Not only with administrative costs, but also the time-consuming application process will certainly incur additional costs.

Electric cars, which could be an alternative mode of transportation, still need to be reviewed in terms of administrative procedures and their usage procedures. So, let’s look forward to their development in Indonesia.

Author: Rizkita Darajat