How Indonesia’s electric mobility transition is being held back by financial system inertia — not engineering limits.
By Diana – Marina Florea and Prof. Kristjan Jespersen
Indonesia has declared an electric future. By 2030, the government wants two million electric cars and twelve million electric two-wheelers on its roads. It has invested in battery production, courted EV manufacturers, and rolled out an incentive package designed to shift consumer behaviour. On paper, the transition is underway, in practice, adoption is stalling – and the received explanation does not hold up. The conventional diagnosis blames technology: too few charging stations, range anxiety, uncertain battery lifetimes. Our research tells a different story. In Indonesia’s largest digital ride-hailing ecosystem, the barrier to EV adoption is not what engineers have built. It is what financial institutions have failed to build alongside it.
The EV is not unbankable because the technology is unreliable. It is unbankable because the financial system has not caught up.
The Canary in the Coal Mine: GoTo’s Electrification Commitment
GoTo is Indonesia’s largest digital platform ecosystem – the parent of Gojek, Tokopedia, and GoPay. With millions of driver-partners and a 2030 commitment to full fleet electrification, it is the single most important test case for EV uptake among the country’s ‘gig economy’ workers. The commitment is genuine. GoTo has signed partnership agreements with EV manufacturers, invested in Electrum, a battery swapping joint venture, and deployed EVs across pilot markets. And yet, despite all of this, uptake among driver-partners remains persistently low.
The drivers are not resistant to electric vehicles. Many actively want them: lower fuel costs, reduced maintenance, and access to Jakarta’s odd-even traffic exemptions make EVs economically attractive. The problem is they cannot get financing. And the reason they cannot get financing is structural, not individual.
When Uncertainty Becomes Unbankable
Traditional vehicle lending was calibrated on decades of internal combustion engine data. Lenders know how a 3-year-old Toyota depreciates. They know its resale market, its repair costs, its default risk profile. That knowledge is embedded in pricing models, underwriting criteria, and collateral assessments built up over generations. Electric vehicles disrupt every one of those assumptions simultaneously.
When a lender looks at an EV, especially from a newer manufacturer, they face compounding uncertainties: battery degradation is non-linear and hard to predict, resale markets are shallow and volatile, technological obsolescence is rapid, and the long-term keeps residual values volatile, which keeps lenders cautious, which maintains the very conditions that make ownership inaccessible.
The trap: Rental models exist because ownership financing is broken. But rental models also perpetuate the conditions that keep ownership financing broken.
Data Is the Missing Infrastructure
If financial institutions cannot price EV risk with confidence, the most powerful intervention is not a subsidy but better data.
GoTo sits on exactly the kind of data that could unlock EV financing at scale. The platform knows how far each driver rides per day, how consistently they generate income, how their earnings fluctuate across seasons, how reliably they service existing obligations. This granular, real-time dataset is arguably more informative about creditworthiness than a traditional credit bureau report – and it exists for millions of drivers who have no formal credit history at all.
Internationally, similar data-driven models have already been deployed successfully. In Southeast Asia and Sub-Saharan Africa, fintech lenders using ride-hailing platform data have extended EV financing with default rates materially below those of traditional subprime auto lending. The model is proven. The barrier in Indonesia is not technical but instead it is about data sharing, regulatory frameworks, and institutional trust between platforms and lenders.
Battery passports offer a second, complementary tool. By tracking battery health, charge cycles, maintenance records, and degradation patterns across the vehicle’s lifetime, a battery passport can make an EV’s core asset – its battery – transparent, comparable, and verifiable. That transparency stabilises residual values. When a lender can look at a battery passport and see that a specific unit has experienced 12% degradation over 80,000 kilometres, they can price that risk. When they cannot see it, they assume the worst.
Together, platform-level income data and vehicle-level battery passports could do more to unlock EV financing in Indonesia than any subsidy programme. They reduce information asymmetry rather than papering over it.
Policy Has Been Treating Symptoms, Not the Disease
Indonesia’s EV incentive package is not insignificant. Value-added tax reductions, luxury tax exemptions, import duty waivers, subsidised fast-charging tariffs, and traffic restriction exemptions in Jakarta and when taken together, these measures do lower the cost of EV ownership and make EVs more attractive for higher-income buyers.
But they leave the financing problem entirely untouched. The short-lived subsidy for electric two-wheelers, which expired in early 2025, illustrates the gap precisely. The subsidy reduced purchase prices. It did not address rapid EV depreciation, the absence of functioning secondary markets, or lenders’ structural viability of some OEMs remains unclear. The rational response, from within a risk management framework designed for ICE assets, is exactly what we observe: higher interest rates, shorter tenors, tighter collateral requirements, or outright refusal.
For GoTo’s driver-partners – many of whom lack formal credit histories, stable income documentation, or collateral beyond the vehicle itself – this is not a minor friction. It is a hard stop.
Key insight: Drivers in the gig economy are precisely the borrowers most dependent on EV financing, and precisely the borrowers the existing system is least equipped to serve.
The Technology Gap Has Closed. The Finance Gap Has Not
Indonesia’s public debate still treats charging infrastructure and battery performance as the dominant barriers. This framing is now outdated, and it matters because it directs policy attention away from the actual constraint.
Charging infrastructure is expanding rapidly, driven by state-owned utility PLN, private partnerships, and GoTo’s own Electrum network. Battery performance under tropical conditions, which is a legitimate concern two years ago, is improving with each new generation of cells. Evidence from more mature EV markets already suggests that battery lifetimes, on average, are broadly comparable to ICE vehicle lifetimes, especially for two-wheelers used in urban ride-hailing.
Uncertainty persists, particularly for intensive ride-hailing use, which stress-tests battery cells more aggressively than private commuting does. But these are questions of degree, not of fundamental viability. The EV works. What does not yet work is the financial architecture built to support it.
Technology improves on engineering timelines. Financial infrastructure moves on institutional timelines – and institutions are slower.
Trapped in a Rental Equilibrium
In the absence of conventional financing, the market has developed a workaround: rental and subscription models. EV manufacturers and fleet operators bundle the vehicle, maintenance, battery swapping, and sometimes insurance into a single daily or weekly payment. This lowers the barrier for drivers with no upfront capital required, no residual value risk and has allowed EV usage to grow even as ownership has stagnated.
The workaround, however, has a structural ceiling.
Rental models require manufacturers or platform operators to carry large vehicle fleets on their own balance sheets. Capital is absorbed that could otherwise be recycled into new production. Scaling requires proportional increases in equity or debt financing that smaller EV manufacturers, in particular, cannot easily access. And because drivers do not own their vehicles, the secondary market for EVs remains underdeveloped, which, in turn, keeps residual values volatile, which keeps lenders cautious, which maintains the very conditions that make ownership inaccessible.
The trap: Rental models exist because ownership financing is broken. But rental models also perpetuate the conditions that keep ownership financing broken.
Data Is the Missing Infrastructure
If financial institutions cannot price EV risk with confidence, the most powerful intervention is not a subsidy but better data.
GoTo sits on exactly the kind of data that could unlock EV financing at scale. The platform knows how far each driver rides per day, how consistently they generate income, how their earnings fluctuate across seasons, how reliably they service existing obligations. This granular, real-time dataset is arguably more informative about creditworthiness than a traditional credit bureau report – and it exists for millions of drivers who have no formal credit history at all.
Internationally, similar data-driven models have already been deployed successfully. In Southeast Asia and Sub-Saharan Africa, fintech lenders using ride-hailing platform data have extended EV financing with default rates materially below those of traditional subprime auto lending. The model is proven. The barrier in Indonesia is not technical but instead it is about data sharing, regulatory frameworks, and institutional trust between platforms and lenders.
Battery passports offer a second, complementary tool. By tracking battery health, charge cycles, maintenance records, and degradation patterns across the vehicle’s lifetime, a battery passport can make an EV’s core asset – its battery – transparent, comparable, and verifiable. That transparency stabilises residual values. When a lender can look at a battery passport and see that a specific unit has experienced 12% degradation over 80,000 kilometres, they can price that risk. When they cannot see it, they assume the worst.
Together, platform-level income data and vehicle-level battery passports could do more to unlock EV financing in Indonesia than any subsidy programme. They reduce information asymmetry rather than papering over it.
Policy Has Been Treating Symptoms, Not the Disease
Indonesia’s EV incentive package is not insignificant. Value-added tax reductions, luxury tax exemptions, import duty waivers, subsidised fast-charging tariffs, and traffic restriction exemptions in Jakarta and when taken together, these measures do lower the cost of EV ownership and make EVs more attractive for higher-income buyers.
But they leave the financing problem entirely untouched. The short-lived subsidy for electric two-wheelers, which expired in early 2025, illustrates the gap precisely. The subsidy reduced purchase prices. It did not address rapid EV depreciation, the absence of functioning secondary markets, or lenders’ structural reluctance to extend affordable credit to low-income gig workers. When the subsidy ended, sales collapsed and many drivers reverted to rentals.
Durable EV adoption requires a different category of policy instrument where one that works at the financial system level rather than the consumer level:
- Public or blended risk-sharing facilities for EV loan portfolios, structured to de-risk first-loss tranches for participating lenders
- Residual value guarantees on selected EV models, backed by public or OEM balance sheets, to create floor prices in the secondary market
- Technical assistance and co-investment to help domestic financial institutions build EV-specific credit models, using platform data and battery performance analytics
- Regulatory clarity on data sharing between platforms, OEMs, and lenders – establishing the legal and privacy framework that makes data-driven credit feasible
A Broader Lesson for Sustainable Finance
The GoTo case is an instance of a pattern that repeats across sustainable finance. Technological transitions create new asset classes with solar farms, offshore wind, green buildings, EVs being established financial systems were not designed to evaluate. The assets work. The technology is often commercially viable. But financial institutions, calibrated to historical data and familiar risk profiles, hesitate or misprice.
In these transitions, the financial system is not passive infrastructure. It is an active constraint. When it cannot accurately price new assets, capital flows are distorted, promising technologies stall at the pilot phase, and the costs of transition fall disproportionately on those, such as Indonesia’s gig workers, have the least capacity to bear them.
Closing that gap requires more than incremental adjustments to existing frameworks. It requires building financial institutions, data systems, and risk-sharing mechanisms that are purpose-built for the transition economy – not adapted from frameworks designed for an economy we are trying to leave behind.
Indonesia’s EV transition will not be won on the motorway. It will be won, or lost, in the credit committees of its financial institutions.
About the Authors
Diana-Marina Florea is pursuing an MSc in Technology Entrepreneurship at DTU and spent her third semester on exchange at Copenhagen Business School (CBS), focusing on circular economy, sustainability, and leadership in multinational enterprises. Her work sits at the intersection of entrepreneurship, strategy, and business transformation, with a particular interest in how market structures, organizational decision-making, and financial systems shape the pace and direction of the green transition.
Prof. Kristjan Jespersen is an Associate Professor in Sustainable Innovation and Entrepreneurship at the Copenhagen Business School (CBS). Kristjan is an Associate Professor at the Copenhagen Business School (CBS). As a primary area of focus, he studies the growing development and management of Ecosystem Services in developing countries. Within the field, Kristjan focuses his attention on the institutional legitimacy of such initiatives and the overall compensation tools used to ensure compliance. He has a background in International Relations and Economics.