Estimating the Total Cost of Ownership (TCO) of Electrified Vehicle in Indonesia

Riyanto (), Chaikal Nuryakin, Setya Agung Riyadi and Natanael Waraney Gerald Massie
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Riyanto: Department of Economics, Faculty of Economics and Business, Universitas Indonesia
Setya Agung Riyadi: Institute for Economic and Social Research Faculty of Economics and Business Universitas Indonesia (LPEM FEB UI)
Natanael Waraney Gerald Massie: Institute for Economic and Social Research Faculty of Economics and Business Universitas Indonesia (LPEM FEB UI)

No 202043, LPEM FEBUI Working Papers from LPEM, Faculty of Economics and Business, University of Indonesia

Abstract: With the Electrified Vehicles (EVs) ventures being in the early stage, the cost-benefit 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. Specifically, 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 findings suggest that generally, in Indonesia, higher usage and/or length of ownership of EVs lead to more competitive TCO 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.

Keywords: electrified; vehicle; —; incentives; —; total; cost; of; ownership; —; Indonesia (search for similar items in EconPapers)
JEL-codes: C63 L62 O14 (search for similar items in EconPapers)
Date: 2020-43, Revised 2020
New Economics Papers: this item is included in nep-ene, nep-sea and nep-tre
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Citations: View citations in EconPapers (1)

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