Estimating the Total Cost of Ownership (TCO) of Electrified Vehicle in 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 competitiveTCO 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.…
    17 Jan
    17 Jan
  • Abstract We examined the potential heterogeneous impact of implementing a series of visa-exemption policies on foreign tourist arrivals in Indonesia by exploiting a rich dataset of monthly series of foreign tourist arrivals, by country and by port of entry between January 2014 and December 2018. This is the first study in providing empirical evidence of the heterogenous impact of a country’s visa-exemption policy across tourist’s origins and within-country destinations. Using a panel data approach, our estimates showed that while the policy increased monthly foreign tourist arrivals by 5% on average, the effect was evident for non-traditional destinations only. The policy also potentially provided a diversion effect between destinations, such that created an adverse effect on the traditional destinations of Indonesia. Our estimates also suggest a heterogenous impact at the continent level, and an 8% higher impact per year after the policy’s introduction, which was relatively lower than has been found in other studies. The findings imply that the visa-exemption policy is not a one-size-fits-all policy in attracting international tourist arrivals.…
    17 Dec
    17 Dec
  • Abstract As the ASEAN put forward aviation industry liberalization measures in 2010, the Indonesian aviation industry has been moving towards the other side of spectrum of late. Two market ventures driving the change was in late 2018, where one of the leading airlines group, Garuda Group, through Citilink agreed to form cooperation with Sriwijaya Air. Second, January 2019 further marked the period in which Lion Air started charging ‘baggage fees’ and Garuda Indonesia stopped offering sub class ticket. Amid the presence of such changes in the industry, this study aims to discuss the current state, challenges, and potential of the Indonesian aviation market; comprehensively discuss the economic implications of such state of the industry; as well as how the government may act to help address the possible market failures. The study utilizes multiple data sources, i.e., data from CAPA, INFARE, as well as official governmental transportation database. We first describe the potential of airlines industry in Indonesia. We identify the periodical breaks in the industry’s growth; that is, during which periods significant changes are happening. What follows is a complete breakdown of the market concentration and landscape. We proceed to show the impacts of the generalized price hike. Our findings suggest that loss of passengers is immense. Further, we find an intriguingly similar capacity drop in the period following the Citilink – Sriwijaya deal conducted by virtually all the members of Garuda Group and Lion Air Group – all against the year-on-year trend. We specifically decompose the changes that follow…
    17 Dec
    17 Dec
  • Abstract The 2018 Asian Games is the biggest sports event in the history of Asian Games in terms of contested sports as well as the participating athletes. Considering the massive scale of the event, it is imperative that the benefits generated by the 2018 Asian Games be measured. This study contributes to the extant body of literature on the long-term benefits of sports event on tourism and sports tourism sectors, with reference to the case of 2018 Asian Games in Indonesia. Using primary data collected through the survey during the event, the study found that hosting the 2018 Asian Games has increased favorable perceptions among event participants and visitors towards Indonesia; positively affected the propensity to repeat visitations to Indonesia in the future; increased the likelihood of giving positive referrals to Indonesia for tourism destination and future international sports event hosting. The academic and policy implications of the findings are discussed.…
    25 Nov
    25 Nov
  • Abstract During 2013–2016, there are policy changes on Personal Income Tax (PIT) exemption, stated in PMK No. 162/PMK.011/2012, PMK No. 122/PMK.010/2015, and PMK No. 101/PMK.010/2016. Nonetheless, there is no empirical study yet, to my knowledge, that evaluates this policy. An increase of PIT exemptions can be viewed from distributive aspect, of how the incidence (benefit) distributed across taxpayers’ disposable income, as well as on the efficiency aspect, whether it has or has not affected labor supply. This study explored on the efficiency aspect. The agents – taxpayers as workers – now may experience an increase in net income due to a more generous exemption, and whether the policy of PIT exemption may influence taxpayers’ labor supply is more of an empirical question. I use SAKERNAS data from 2010–2018 and estimation model is limited to only consider paid (labor) employment rather than self-employment. On paid (labor) employment, firms function as withholding that can extract some of PIT from employee’s salary, and thus paid (labor) employee may then file PIT return. My preliminary result shows that effect of PIT exemption policy change is heterogenous across group of population. PIT exemption expansion increases labor supply of paid (labor) employees of the previously lowest income bracket of PIT. However, although to an extent tax saving may be higher for middle to high income individuals, taxpayers referring to individuals in income bracket of 15% rate tend to be not affected by the policy of PIT exemption.…
    21 Oct
    21 Oct
  • Abstract This paper empirically examines asymmetric transmissions from money market rates to various consumer rates throughout a sample period that comprises monetary policy shifting in Indonesia from 2011 to 2017. We adopt modification of Asymmetric Error Correction Models (AECM), which incorporate three-error correction term. This allows us to inspect the different adjustment when the disequilibria are: large-positive, large-negative, and small. Our findings shows that there are varying asymmetric adjustment in response to different shocks across products in lending market. Thus, the monetary authorities should notice that both easing and tightening monetary policy appear to have varying impact to different credit market.…
    03 Oct
    03 Oct
  • Abstract The 2018 Asian Games was the biggest sports event in the history of Asian Games. Held in Indonesia, the sports event contested 40 sports and 465 events while served for 11,326 athletes from 45 Asian countries, apart from hundreds of thousands of international visitors, officials and journalists. While required a considerable amount of public spending, such a massive scale of event generated large economic stimuli to Indonesian economy, among which were the spending of international participants and spectators. This study aims to estimate the determinants of international participants and spectators’ spending. Data were collected through face-to-face interviews during the event. The findings suggest that the spending and spending composition of international participants and spectators vary across types of participants, country of origins, gender, age group and traveling experiences. The academic and policy implications of the findings are discussed.…
    29 Jul
    29 Jul
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