Idiotopedia: (Opinion) The Promise of Green Investment - EV series

(Scheduled publishing features from LinkedIn)

I wrote about EVs in an earlier piece on my Idiotopedia's LinkedIn post. Still, I'm back to share and go over what I know about Green Investments and how they fit into the bigger picture of the EV ecosystem. It's important to think about how this so-called "green" effort fits into the startup scene in Indonesia and whether we're really making a difference or just following a new business plan.

Before I get into the numbers and look at how profitable it is to invest in EV motorcycle startups in Indonesia, I want to make a quick warning. I don't know much about EVs, and I'm not trying to sell or promote anything here. My brother recently asked me to compare the efficiency of electric vehicles (EVs) to that of cars with standard fuel-based engines. Since I don't know much about this topic, I used my simple logical thinking. Well, yes, I'm just giving my opinion as someone interested in green investments. This is not a scientific breakdown, so take it as a simple point of view.

Many people say that electric vehicles (EVs) are a great way to reduce carbon emissions. But the picture gets more complicated when I look at the details, especially in Indonesia. Charging an electric motorcycle using a coal-based power grid, along with the environmental problems caused by battery waste, makes it unclear whether this is a green investment or another calculated move by major industry players to capitalize on the green narrative.

Let me play with numbers to make simple assumptions for this (but let me know whether this is the right one or not):

- EV motorcycle costs IDR 40,000,000 (~USD 2,700) to buy for the first time.

- Battery life: 5 years (avg).

- Cost to charge: IDR 20,000 (~US$1.35) for a full charge

- Range on a full charge: 150 km (avg).

- Usage: 20,000 km per year (avg).

- Getting a new battery costs IDR 8,000,000 (about USD 540) every 5 years.

- 0.8 kg CO2 per kWh from coal-based power plants

- Each charge uses 4 kWh of electricity

- Fuel costs IDR 10,000/liter (avg)

- Traditional motorcycles use 1 liter of gas every 40 km (source: Honda Beat?).

- EVs can get incentives of IDR 7,000,000 (~USD 475) from the government.

- A carbon tax of IDR 100,000 per ton of CO2 (released in the future?)

Look at this calculation: These financial models and estimates of CO2 emissions aren't just about money and CO2. It makes me wonder if these investments help build a better future or are just ways to shift the blame. We must consider whether the effect is worth the money or if we're just giving old problems a new name.

Running Costs of an EV Motorcycle:        

1. Annual electricity consumption, let's say (20,000 km/year) ÷ (150 km/full charge) × 4 kWh = 533.33 kWh/year

2. Annual charging cost is equal to (533.33 kWh/year) × (IDR 20,000 per charge) = IDR 10,666,667/year

3. Total electricity cost over 5 years: IDR 53,333,333

Carbon Emissions from EV Charging:        

1. Coal-based power plants release around 426.67 kg of CO2 annually into the air. This is equal to 533.33 kWh x 0.8 kg CO2/kWh.

2. In total, 426.67 kg CO2 per year times 5 years equals 2,133.35 kg, or 2.13 tons of CO2.

Running Costs of a Fuel-Based Motorcycle:        

1. Amount of fuel used each year, for 20,000 km/year x 40 km/liter = 500 liters/year

2. How much fuel costs a year:

- 500 liters per year times 10,000 IDR per liter equals 5,000,000 IDR per year

3. IDR 25,000,000 in fuel costs over 5 years

Carbon Emissions from a Fuel-Based Motorcycle:        

1. CO2 emissions per liter of gasoline: 2.3 kg CO2/liter

2. Annual CO2 emissions, for 500 liters/year × 2.3 kg CO2/liter = 1,150 kg CO2/year

3. Total emissions over 5 years, for 1,150 kg CO2/year × 5 = 5,750 kg (or 5.75 tons of CO2)

From the point of view of an investor (or maybe from my perspective), EV motorcycles in Indonesia aren't very good or bad when it comes to making money. Start-ups like Gesits, Alva, Smoot, and Volta Indonesia are some local market players for electric motorcycles. Even though they have creative solutions, long-term costs must be carefully examined. EV motorcycles are noticeably more expensive to own and run over the course of 5 years than regular motorcycles. Even though charging costs less per kilometer than fuel, the higher price at purchase and the cost of replacing the battery make the total cost of ownership almost twice as high as for a fuel-based motorcycle.

In terms of carbon emissions, electric motorcycles are better for the environment. They put out about 63% less CO2 over the same time. But this picture doesn't show everything. When the energy grid in Indonesia is still mostly made up of coal, the emissions from making electricity for EVs can't be ignored. On top of that, getting rid of old batteries is another environmental problem. While lithium-ion batteries are often used in EVs, they are considered hazardous waste. If we don't have the right recycling systems in place, they could cause big problems for the environment in the future.

When these hidden costs are considered from an investment point of view, the story of EVs as the "green" solution gets trickier. When investors look at Indonesia's current startup scene, they need to weigh the promise of a positive environmental impact against the realities of limited infrastructure and high long-term costs. As the EV market grows, investors need to think carefully about whether these environmentally friendly solutions are possible or just a more expensive way to get to where they need to be. This is especially important for Indonesia, which currently relies on coal power.

Then, what is the impact of the carbon tax here?

Let's imagine that there is a carbon tax in the future (when?). Let's say that Indonesia charges IDR 100,000 per ton of CO2 as a carbon tax. In theory, this would change the cost situation, especially for gasoline motorcycles. The tax would be IDR 213,000 (you can use the simple logic calculation as the above model) for an EV motorcycle that would release about 2.13 tons of CO2 from charging with coal over its lifetime. A regular fuel-based motorcycle, which puts out about 5.75 tons of CO2, would have to pay a tax of IDR 575,000.

Even though these numbers seem to favor electric motorcycles slightly, the truth from an investor's point of view isn't so simple. A difference in taxes of a few hundred thousand rupiahs doesn't make a difference when you think about how much cars cost overall and how much money is needed to start an EV company in Indonesia. Gesits is one of the local EV startups that comes to mind. They're having trouble with both production costs and infrastructure because their initial investments were said to be around $30 million. The price difference between fuel-based and electric motorcycles is still big, even with carbon tax breaks or government support.

Another example is the Indonesian EV company Volta, which raised USD 45 million to grow its business. Indika Energy and Grab are supporting it. However, the cost of setting up charging networks, keeping batteries in good shape, and ensuring they can be expanded often outweighs the small amount of money carbon taxes bring in. People like me, who are investors, have to look past these small tax breaks and look at the bigger picture: Are EVs ready for the market? Are there real ways this sector can save money that would make it competitive with traditional vehicles running on gasoline?

To be honest, the carbon tax doesn't close the money gap, even though it does help tip the scales in favor of EVs. If Indonesia wants to help EV startups, it should not just focus on small carbon taxes but also long-term investments in infrastructure and strong policy support. As an investor, I need to see bigger returns on my money, and small changes to tax policy won't do it.

My last opinions about these EV things:

That's not all. Again, is the EV motorcycle a green investment, or is it just a change in who is responsible for the environment? EVs seem to cut down on direct emissions but don't forget about the electricity from coal and the dangerous battery waste. Even though EVs may appear to be a good investment on paper, the issue simply moves if they use coal as their fuel process. This shows that the story of green investments isn't always true; it's often more about "optics" than real environmental impact. The big players always win, whether in the fossil fuels or EV markets. One could say they've just switched from making money off of fuel to now controlling the supply chains for EVs and energy.

In my imagination, what if the whole story of sustainability is wrong? Shouldn't being "green" be the main goal? What if getting stronger should be? Stop trying to keep up with the latest sustainability buzzwords. Instead, businesses, especially those in Indonesia, should start getting ready for the future we're going to have, which will be unstable, unpredictable, and hard to understand. The people who talk the most about being green won't be the ones who win in 2025 and beyond. They will be the ones who quietly made their business models stronger—not because it's cool, but because they need to stay in business.

Again and again, there's a chance that the truth has less to do with a story and more with everyday life. Companies that used to make fuel-based products may now be betting on EVs as a new way to make money. This lets them branch out without really changing how they do things. Perhaps being strong, not living a long time, was the real goal. Preparing for what's next is more important than getting a green badge of honor. What's the big surprise? It's possible that the people who support going green the most won't be the ones who do well. People who are ready for a tough future... even recycling human fecal matter for energy? #buzzme!

Please don't get me wrong—if you already have an EV for daily use, that's great! It means you're okay with the experience, the limits, and the "affordable" part that interested you. In the end, what matters most is that everyone has their own tastes and choices! #Alfred

Anyway, enjoy the journey!