Learning from MAKA Motors: Building a viable energy transition business in Indonesia

With rapid urbanization and economic growth in Southeast Asia (SEA), the demand for energy transition is surging. This steers the region toward renewable energy sources, as countries look to diversify their energy mix and reduce their reliance on fossil fuels and their price volatility, ultimately cutting their carbon emissions.

The recent Southeast Asia Energy Outlook 2022 report by the International Energy Agency (IEA) shows that energy demand in the region has surged by an average of 3% annually over the past two decades. 

If you are a founder in this sector wondering how to start an energy transition company and aspiring to make a change, read on to get inspired by the East Ventures-backed founder of MAKA Motors!

The humble beginnings

MAKA Motors is a rising star in the energy transition industry, offering an alternative to fossil-fueled two-wheelers, that is, electric vehicle two-wheelers (EV2W).

The company began with two best friends passionate about creating a real, positive impact: Raditya  Wibowo, familiarly known as Dito, and Arief Fadillah. They brought together their experience as two-wheeler users since high school and seven long years working at a ride-hailing giant, Gojek.

Indonesia is home to 125 million motorcycle riders. Yet, when transitioning to EV2W, consumers are not necessarily prioritizing sustainability when making purchasing decisions. They are more likely to be swayed by factors such as cost, performance, and reliability.

“People will not switch to EVs [or other sustainable alternatives] simply because they want to be more environmentally friendly. There must be other benefits offered, and we think that is one of the keys to running a ‘green business’ in Indonesia: it is not enough to just be green; there have to be more benefits for the user,” said Dito. And thus, MAKA Motors was born.

Its humble beginnings started out at Dito’s garage back home with them and their small team of ex-colleagues from Gojek. 

Being veterans in the industry gave them an intimate understanding of creating and designing products that cater to users’ needs.

“As two-wheeler riders, we have a strong view of what is needed from two-wheelers in Indonesia to be comfortable on the road and what users need. We think that is important when designing a product,” said Dito.

Despite that, there were times when Dito thought that creating a motorcycle from scratch was “not remotely easy,” even after combining his background in industrial engineering with Arief’s expertise in design engineering.

He recalled a simpler time when he and Arief came to the office to experiment with rotating dynamos with a hearty laugh. 

“We had a battery, a dynamo, and a wiring diagram. I tried to remember the lecture I had in college – how to read [the diagram]. Arief, who used to work as an oil and gas engineer, helped with the cables. The first time it spun, we were over the moon! Alas, our joy did not last, and smoke came out. It turned out that we did not install the key switch correctly, and it got burnt. But hey, at least it worked! Though, it is still a long way before it finally becomes a full two-wheeler.”

Dito also shared that their office and workshop were once flooded. “We all rolled up our pants to rescue the unfinished vehicle in panic and thought, “What are we going to tell our investors?” It was quite a stressful day for our team. Fortunately, all tools and equipment worked well as everyone moved swiftly to secure the goods,” he reminisced.

That day became a lesson learned for the MAKA Motors team, hence the installation of an anti-flood door in their current office and higher walls around the workshop. Dito also admitted that the team – now bigger – has come a long way. Yet, they never forget their DNA: the ability to move fast despite challenges. 

“Be brave and face the challenge first. The fact that we have no experience in automotive allows us to see things from a different perspective,” said Dito.

Challenges and ways to finesse them

A present challenge in the sector, Dito observes, is that energy transition is still very nascent. Yet, emerging technologies and growing awareness among entrepreneurs and consumers might lead to a perception of fierce competition.

“We should not see other EV2W companies as competitors now. Instead, we should join forces because we have a common ‘enemy’ that’s much bigger than all of us, which is gasoline-powered two-wheelers,” said Dito. Seeing other players as an alliance rather than a competitor may be difficult, but potential collaborations can also surface.

For example, EV2W consumers or users may worry about the after-sales and resale value. “We believe we have the best solution, but other companies may have other ideas too. That is where we can collaborate. At this point, the industry is still small, and we can be stronger when we unite our voices,” Dito added.

CIIC is calling for energy transition innovators

Driven by the increasing urgency to address climate change and investors’ interest in this industry, East Ventures and Temasek Foundation are thrilled to again present the second Climate Impact Innovations Challenge (CIIC), following its success in 2023.

This year, Energy Transition is highlighted as one of the three main focus areas (tracks) of the competition. Innovators in this space are welcome to present their ideas by applying to CIIC before 4 June 2024 to get the chance to win a total prize pool of Rp 10 billion to pilot their projects in Indonesia.

The EV scene itself has a long value chain that founders, innovators, and entrepreneurs can tap into, ranging from research and development (R&D) to leasing, insurance, rental, and many more. The complexity extends beyond the vehicles themselves, as each EV component, including the battery, boasts a multifaceted supply chain with numerous steps involved in transforming raw materials like nickel into usable battery packs. 

All in all, Dito emphasizes that building an energy transition – or any green company – shares core principles with businesses in other sectors. The key lies in offering solutions that address a real problem while delivering value to consumers.

“It is not just focusing on green sustainability or energy transition. The only way we can make this work is if the energy transition does not only become the ‘main menu’ but also delivers value to consumers while solving real problems using new, greener technologies,” Dito concluded.

If you are a startup founder building in the EV sector, send us your pitch here.