Summary

Singapore-based low-calorie coal producer Geo Energy diversified its business, marking its entry into the electric vehicle sector with an investment in Charged Asia (CAPL), a prominent electric motorcycle manufacturer based in Singapore.

The newly established subsidiary of Geo Energy, named Geo Electric, is facilitating this venture by disbursing a US$4 million loan to CAPL. Under the loan term, Geo Electric has secured the right to convert the principal loan amount, along with accrued interest, into equity shares within CAPL. 

According to Geo Energy, the loan has an annual interest of 12 percent for 24 months or until conversion, whichever is earlier. Geo will also have an option to further increase its investment in CAPL up to an additional US$36 million to become the majority shareholder.

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CAPL has developed three motorcycle models and delivered more than 1,000 units in Indonesia, Malaysia, and Vietnam.

Geo said CAPL has established a strong foothold in Indonesia with the potential to scale up its presence. The coal producer will collaborate with CAPL to grow its business towards becoming a key player in the Asia-Pacific EV industry.

In December 2022, Charged Indonesia entered into a strategic investment agreement with Vmoto Soco Group valued at US$38 million.

This investment is intended to expand Charged Indonesia's Electric Vehicles as a Service (EVaaS) business in Indonesia and other Southeast Asian countries. Priorly, Charged secured an initial funding of US$4.5 million from DeClout Ventures.

Charged Indonesia has produced electric motorcycles including Charged Anoa, Charged Rimau, and Charged Maleo for both business-to-business (B2B) and business-to-consumer (B2C) customers in November 2022.

For these electric motorcycle models, the company acquired technological know-how from Vmoto Soco Group. Additionally, Charged Indonesia has completed factory commissioning for the 16,000 square meter Giga shed located in Cikupa, Tangerang, Banten.

Currently, all Charged Indonesia motorcycles use CATL batteries produced by the Chinese company that stands as the world's largest electric vehicle battery manufacturer.

Geo Energy follows in the footsteps of coal producers venturing into the electric vehicle sector. Notably, PT Indika Energy Tbk (INDY) has collaborated with Alpha JWC and Horizon Ventures to manufacture ALVA brand electric motorcycles.

Further, PT TBS Energi Utama Tbk (TOBA) has partnered with PT GoTo Gojek Tokopedia Tbk (GOTO) to produce Electrum motorcycles.

These entities recognize that future revenues from the coal business are poised to diminish in tandem with the eco-friendly energy consumption trend.

The electric vehicle sector could potentially serve as a revenue-generating engine for companies, especially as more individuals transition from conventional vehicles to electric alternatives.

According to research from the International Renewable Energy Agency (IRENA) and the Ministry of Energy and Mineral Resources (ESDM), the projected number of electric vehicles in Indonesia is set to reach 20 million units by 2030 under the planned energy scenario (PES).

To break it down, electric cars are expected to surge to 7 million units by 2030, while the number of electric motorcycles is projected to rise to 13 million units. By 2050, the electric vehicle count is expected to skyrocket to 89 million units, encompassing 42 million electric cars and 47 million electric motorcycles.

Image source: dinsights.katadata.co.id

Source:  www.dinsights.katadata.co.id/Geo Energy Invests In EV Producer Charged Asia